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HomeBusinessMoneyPost-Covid handwashing surge wains as PZ Cussons revenues dip 9%

Post-Covid handwashing surge wains as PZ Cussons revenues dip 9%

Carex and Imperial Leather maker PZ Cussons sees revenues dip 9% as the Covid handwashing and hygiene surge wains

  • Carex revenue saw a double-digit decline in firm’s first quarter but remains 40% up over two years
  • With the exception of Carex, revenues grew by 4% for the quarter 
  • PZ Cusons saw losses after tax of £16.6m over one year, reflecting a fall of 184% 
  • The firm is forecasting a return to growth in the three months to November

Carex-maker PZ Cussons saw revenues fall 9 per cent, as the personal healthcare product provider reported waning demand for hygiene products like soap and hand sanitiser from its pandemic peak.

PZ Cussons said its revenue decline in the first quarter of its financial year was ‘entirely driven’ by hygiene products, with Carex experiencing a double-digit drop.

Without Carex, sales income of which are still up 40 per cent on two years ago, group revenues for the quarter grew by 4 per cent.

The firm’s revenue decline in the first quarter of its financial year was ‘entirely driven’ by hygiene products

But the Manchester-based company also reported on Wednesday that it has suffered losses after tax of £16.6million in the year to 31 May, reflecting a fall of 184 per cent from 2020’s £19.7million profit, which PZ Cussons pinned on the disposal of Nigerian dairy business Nutricima.

The Imperial Leather soap maker said it expects to return to growth in the three months to November and forecast 2022 profits to be within the range of analyst expectations.

First quarter revenues remain 13 per cent above 2019 levels, with growth in each of the firm’s core business categories.

PZ Cussons was also able to reduce its debt pile to £23million by the end of May, compared to £49.2million at the same time last year.

The company also confirmed a 5 per cent boost to dividends from 5.8p to 6.09p per share

PZ Cussons shares, which are currently trading at 221p, fell as much as 7.5 per cent in early trading but have since recovered some ground.

CEO Jonathan Myers said: ‘The medium-term outlook remains in line with our expectations and we have confidence that our brand and market portfolio will emerge strongly once we cycle through the unprecedented demand for hygiene products at the start of the pandemic.

‘Despite the significant inflationary pressure on our cost base, assuming no further cost headwinds or global supply or other Covid-related disruption, we expect to deliver FY22 adjusted profit before tax within the current range of expectations.’

Commenting on the company’s performance, senior analyst at Freetrade Dan Lane said PZ Cussons is ‘starting to look a lot healthier than 2020’, but a dividend increase should be viewed as ‘a signal of hope for growth more than anything’.

He added: ‘More broadly, if inflation sticks around, the big test will be in passing the cost of Carex on to us all.

‘This is where these huge product stables need to make their brand names work. It’s one thing having an iconic name that pulls in customers no matter what. But PZ Cussons doesn’t have any marques at that elite level.

‘What’s more, its collection just looks a bit unexciting – brands like Original Source and Imperial Leather show PZ Cussons has been trying to trade on past reputations for too long and has forgotten to keep up with the times.’

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