PZ Cussons said yesterday that its guidance on profit remains within consensus but at the lower end, as the coronavirus outbreak boosted sales of its cleaning brands but hit demand for its beauty ranges.
In an update on trading for the third quarter to 29 February, the company said overall revenue in the period declined against last year, albeit at a reduced rate compared to the first half of the year. Actual figures were not revealed.
PZ Cussons stated that key markets continued to be impacted by consumer fragility, and towards the end of the period, the start of the pandemic.
The group highlighted that it had seen some improvement in its UK personal care business with the rate of decline softening. Its Carex handwashing brand benefitted from a “significant” increase in demand towards the end of the quarter as coronavirus outbreak began. It has since experienced “exceptionally high demand” for its hand wash, sanitiser gel products, and Imperial Leather soap.
“Our focus remains on sourcing, producing and distributing these items. Our team has shown exceptional ability to reconfigure products and supply chains rapidly, but we continue to face challenges in sourcing packaging and raw materials to enable us to fully meet demand,” it said.
Meanwhile, the company stated that its beauty business had faced “tough competitive conditions” in the quarter, particularly in the UK. Since then, this side of its business has been “severely impacted” by the coronavirus crisis with its St Tropez tanning product being hit hard by social distancing measures introduced in key markets. PZ Cussons said its “significant” marketing activities planned for the fourth quarter have now been cancelled and it expects the business to be slow to recover.
The group’s other beauty brands have also been impacted as retailers focus on hygiene and personal care, and hair salons close.
PZ Cussons stressed that it has historically maintained a prudent financial position, and it entered the current crisis with a strong balance sheet.
It added: “We continue to focus on management actions to manage liquidity carefully across the group. Recent actions taken have included the cancellation of capital expenditure projects, the review of the cost base, particularly in those areas of the business most impacted by Covid-19 and working capital initiatives across our business.”
PZ Cussons recently announced that former P&G and Avon executive Jonathan Myers will become its new Chief Executive in May. He replaces Alex Kanellis, who announced at the end of last year that he would be retiring after 13 years leading the business. The company is currently implementing an improvement plan after a difficult few years.
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