Profits slide at PZ Cussons amid inflation and consumer caution

A ‘solid’ performance in PZ Cussons’ beauty division was not able to offset a decline in the company’s washing and bathing segment, leading to a decline in profitability in the six months to 30 November.

The company said performance in its beauty division, including Sanctuary Spa,St Tropez and Charles Worthington was 'solid' in the six months to the end of November - Photo: Sanctuary

The leading consumer products group said on Tuesday that rising caution amongst UK consumers is impacting its ability to profit from the sale of bathing products, as more consumers shift towards cheaper products amid growing inflation.

While adjusted revenue for the half year increased by 1.9% to £385.4m, adjusted operating profit dropped by 10.3% from £41.8m to £37.5m. Adjusted profit before tax was down 15.4% to £34m.

Profitability is expected to improve in the second half of the year as a result of new product launches and distribution expansion, said PZ Cussons.

In Africa, the company experienced robust performance in Personal Care, Home Care and in the PZ Wilmar joint venture in Nigeria, and there was strong growth in Australia across all categories. Poland, Greece, Ghana and Kenya, also reported an increase in profitability, while profits were flat in Thailand and the Middle East.

"In the first half of the financial year, the group has faced tough trading conditions in many of the markets in which it operates, and whilst revenue was 1.9% higher than the previous period, adjusted operating profit was 10.3% lower as a result of reduced margins in certain business units in Europe and Africa,” said Caroline Silver, chairwoman.

“Initiatives are underway to improve performance of these business units and, together with the positive momentum elsewhere in the group and in particular in Asia, provide a solid basis for improved performance in the second half of the year.”

PSZ Cussons owns personal care and beauty brands such as Imperial Leather, Original Source, Morning Fresh, Cussons Baby and St.Tropez.

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