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A-Brands

PZ Cussons' Half-Year Profit Falls As Demand Softens, Costs Rise

Soap maker PZ Cussons said its first-half profit fell from a year earlier as demand for its hand wash and sanitisers dipped from the heights hit during the peak of the COVID-19 pandemic.

The maker of Imperial Leather soap and Carex hand wash warned of rising inflationary pressures that could increase its expenses, but reiterated that adjusted pre-tax profit for the year to May 2022 should fall within current market estimates.

"Commodity and freight costs show no sign of abating in the near term and we continue to anticipate cost pressures into fiscal year 2023," chief executive officer Jonathan Myers said in a statement.

Half-Year Performance

The Manchester-based company said its adjusted profit before tax from continuing operations fell 8% to £32 million ($43.4 million) in the six months ended November, from £34.9 million a year earlier.

Still, the group's revenue returned to growth in the second quarter after having fallen 9% in the three months prior.

Myers added, "The business returned to revenue growth in the second quarter with our core baby and beauty categories growing revenue in the first half overall. Revenue from must win Brands, excluding Carex, grew 10% and the overall business showed strong underlying momentum when comparing the results to the equivalent period two years ago.

"Continued price/mix improvements helped strengthen gross margin in the first half of the year, allowing us to increase media and consumer investment behind our brands and maintain our operating margin. These results demonstrate our ability to use the strength of our brands to protect margins in the face of cost headwinds."

PZ Cussons also approved an interim dividend of 2.67 pence per share.

Read More: PZ Cussons CEO's Efforts To 'Clean Up The Mess' Are Bearing Fruit, Says Analyst

News by Reuters, additional reporting by ESM. For more A-Brands news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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