Imperial Leather owner PZ Cussons boosted by price hikes

Imperial Leather owner PZ Cussons has achieved its sixth successive quarter of revenue growth thanks to price hikes and growing demand across all regions.

Like-for-like sales at the soap seller rose by 6.2 per cent to £166million for the quarter ending 4 March as price increases implemented during the previous six months took full effect.

Like most British businesses, PZ Cussons’s margins have come under pressure from higher raw material, labour and logistics costs, as well as weaker consumer spending.

Performance: Imperial Leather owner PZ Cussons has achieved its sixth successive quarter of revenue growth thanks to price hikes and growing demand across all regions 

On a reported basis, the firm’s turnover jumped by 13 per cent due to favourable currency movements and sales from Childs Farm, a skincare brand it acquired for £36.8million in March last year.

Revenues in Europe and the Americas improved significantly, rising by almost 10 per cent following solid orders for tanning brand St. Tropez in the US, as well as Imperial Leather and Cussons Creations.

The FTSE 250 company said the region also benefited from higher margins, which had been impacted in the prior six months by impairment costs in its Charles Worthington brand.

At the same time, sales rose by 7.7 per cent in Africa, where the business saw high demand for all its ‘Must Win Brands,’ which include Carex, shower gel Original Source and Sanctuary Spa.

This was despite trading in Nigeria being disrupted by a heavily contested general election and banknote changes that left some of the country’s citizens struggling to get hold of cash.

Sales grew more modestly across the Asia-Pacific as a strong result in Australia coincided with consumer spending pressures and retailer destocking, thereby hitting demand for Cussons Baby products in Indonesia.

PZ Cussons chief executive Jonathan Myers said: ‘We have delivered another quarter of mid-single digit revenue growth, in line with our longer-term ambition.

‘This represents a sixth consecutive quarter of growth, with the business underpinned by the strength and depth of our portfolio and our ongoing strategy to invest behind our brands, build internal capabilities and serve consumers better.’

While the Manchester-based company acknowledged it was ‘alert to ongoing external volatility, it continues to anticipate adjusted pre-tax profits for this financial year will at least align with present market expectations.

‘Should positive trading continue in key markets such as Europe & Americas and Australia, then we could see upside risks to forecasts,’ said Damian McNeela and Deidre Mullaney, analysts at broker Numis. 

PZ Cussons shares were 4.2 per cent up at 195p on Thursday morning, although their value has still fallen by approximately 30 per cent over the past two years.

This post first appeared on Dailymail.co.uk