PZ Cussons sees sales grow on back of surging demand in Africa and price hikes offsetting cost rises
- PZ Cussons revealed like-for-like sales in the third quarter rose 8.5% annually
- The manufacturer’s hygiene arm saw the largest expansion in revenues of 7.7%
- Beauty revenue was hit by a slump in US demand for its St Tropez tanning brand
Healthcare products firm PZ Cussons has revealed sales grew last quarter following a strong performance in Africa and price increases on some goods.
This offset additional input costs incurred by the group, declining revenues across Europe and the Americas, and weaker demand for a popular tanning brand in the United States due to supply chain problems.
The Imperial Leather owner reported like-for-like sales in the three months ending February 28 jumped 8.5 per cent from the same period last year, while they were 13.9 per cent higher on a two-year basis.
Growth: Imperial Leather brand owner PZ Cussons reported like-for-like sales in the three months ending February 28 jumped 8.5 per cent from the same period last year
Revenues in Africa climbed by around a quarter, which the business attributed to price hikes and wider distribution leading to double-digit percentage sales growth across major brands like Robb and Stella.
By comparison, PZ Cussons scored a very modest revenue boost in the Asia-Pacific region and saw UK sales of hand hygiene goods shrink after impressive comparative results in the prior year when lockdown rules were harsher.
Tough restrictions helped drive orders for the company’s Carex hand wash products, especially during the Covid-19 pandemic’s peak when Britons were advised to wash their hands more thoroughly to protect themselves from the virus.
But though demand for these goods has diminished, the manufacturer’s hygiene arm, which also comprises Original Source shower gel, still saw the largest expansion in sales of 7.7 per cent.
Healthy demand for Rafferty’s Garden food also drove a minor growth in baby products sales despite enhanced coronavirus restrictions in Indonesia depressing trade in retail outlets.
The performances from these divisions cancelled out a 1.7 per cent fall in beauty revenue caused by orders slumping in the US for its St Tropez tanning brand and a 5.3 per cent drop in sales across Europe and the Americas.
Bath goods: Brands belonging to PZ Cussons’ hygiene arm include Original Source shower gel
Following this impressive growth in sales, Manchester-based PZ Cussons has maintained its full-year outlook of an increase in like-for-like revenue and adjusted pre-tax profits within prevailing market expectations.
Yet amidst the UK’s inflation rate reaching 7 per cent last month, its highest level in three decades, the firm’s chief executive Jonathan Myers observed that input costs at the business have continued to rise in recent weeks.
He warned that the ‘external environment is amongst the most challenging many of us have seen,’ with households likely facing significant pressure on their spending in the near future.
Myers added: ‘We are removing costs that the consumer does not value, and have plans in place to meet evolving consumer needs, including innovation to offer everyday great value as well as more premium-priced launches.
‘While the coming months will continue to be challenging for us and the wider consumer goods sector, the strength of our brands and our strategic progress gives me confidence in the long term prospects for the business.’
It hopes to benefit handsomely from sales of Basingstoke-based skincare business Childs Farm, which it bought for £36.8million last month from Joanna Jensen, who started the business in 2010 as a way to treat her daughters’ eczema and sensitive skin.
Other brands owned by PZ Cussons include haircare label Charles Worthington, Mamador cooking oil, bespoke fragrance maker Bayley’s of Bond Street, and dishwashing liquid Morning Fresh.
PZ Cussons shares closed trading 3.7 per cent higher at £2.08 on Wednesday, making it one of the top five rising companies on the mid-cap FTSE 250 Index.