PZ Cussons Reports Profit Declines As Revenue Dips; Good First Quarter

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PZ Cussons Nigeria Plc, a publicly listed Nigerian subsidiary of Manchester based PZ Cussons Holdings and manufacturer and distributor of consumer products such as detergents, toiletries, soaps and home appliances has released its annual report and consolidated financial statements May 31, 2020 with 10 per cent revenue decline to N66.993 billion from N74.336 billion in full year 2019.

The company reported a loss after tax of N7.240 billion during the year from a profit of N1.156 billion in 2019.

Meanwhile, while the company saw an improvement in revenue for its first quarter ended 31 August 2020 (Q1 2020/21) by 18.3% to N18.7 billion from N15.808 during the same quarter in 2019, it reduced its loss by 80.6% to N212.358 million from N1.096 billion.

The personal care products maker said pretax profit for its financial year ended May 31 fell 33% to GBP29.3 million from GBP43.6 million the year before.

Revenue fell 2.4% to GBP587.2 million from GBP603.0 million. This was explained as resulting from “growth in the Europe & the Americas region offset by reductions in both the Africa and Asia Pacific regions.”

The company added that “Covid-19 had a mixed impact on group revenue resulting in an outstanding performance in the UK largely offset by the decline in Beauty, Nigeria and Australia with a stable performance in Indonesia.”

Selling and distribution costs increased to GBP91.7 million from GBP89.9 million and administrative expenses rose to GBP104.7 million from GBP100.0 million.

The Manchester-based company decreased its final dividend to 3.13 pence per share from 5.61p, bringing the annual total dividend per share down 30% to 5.80p from 8.28p.

In terms of outlook, PZ Cussons noted: “Despite the renewed momentum of our business in the first quarter of FY21 we expect volatility and risk to continue as well as increased investment in our brands and capabilities as we prepare for a multi-year turnaround of the business, starting with a comprehensive review of our strategy.”

Chair Caroline Silver said: “We enter this year with a stronger base to work from and new leadership. Our financial position, in terms of net debt and working capital management, is robust. We have significant opportunities in the increasingly important hygiene category and across Beauty as our business recovers. The restructuring of our Nigerian business, also under new leadership, is underway. There are plenty of uncertainties in the macroeconomic environment, but we have taken, and will continue to take, decisive actions to drive our return to growth.”

Separately, PZ Cussons issued a trading statement for its first quarter ended August 31. It said that revenue was up 19% in the quarter on a reported basis with its Focus Brands growth experiencing 37% growth at constant exchange rates compared to the previous year.

PZ Cussons also noted that its improved revenue resulted from “top line focused interventions and strong demand for hygiene brands” as well as a recovery of results in Nigeria and Australia, as well as from its Beauty division.

Disposal of its Nutricima milk business is going as planned and set to complete by September end.

Although there was cause for optimism, Chief Executive Jonathan Myers cautioned that: “The operating landscape remains highly volatile with many of the economies we operate in moving into recession, the continuing uncertainty of the Covid-19 pandemic and categories remaining highly competitive with pressure on discounting and cost. While it remains very difficult to forecast and give guidance we expect some adverse headwinds for the rest of the year following this good start.”

Additionally, Non-executive Director Tamara Minick-Scokalo – who had taken a leave of absence for personal reasons – is now intending to step down from the board effective from the company’s November 26 annual general meeting

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