Imperial Leather owner PZ Cussons boosted by price hikes
PZ Cussons boosted by price increases as owner of Imperial Leather posted sales growth for sixth consecutive quarter
- Like-for-like sales at PZ Cussons rose 6.2% last quarter to £166m
- The group’s turnover in Europe and America improved considerably
- Rising raw material, labor and logistics costs have eroded the company’s margins
Imperial Leather’s owner, PZ Cussons, has posted sales growth for the sixth consecutive quarter driven by price increases and growing demand in all regions.
Like-for-like sales at the soap retailer rose 6.2 per cent to £166 million for the quarter ended March 4, as price increases introduced during the previous six months took full effect.
As with most UK businesses, PZ Cussons’ margins are under pressure from higher raw material, labor and logistics costs and weaker consumer spending.
Performance: PZ Cussons, owner of Imperial Leather, delivered sales growth for sixth consecutive quarter driven by price increases and growing demand in all regions
On a reported basis, the company’s sales were up 13 percent due to favorable currency movements and sales of Childs Farm, a skincare brand it acquired for £36.8 million in March last year.
Revenues in Europe and the Americas improved significantly, rising nearly 10 percent following solid orders for the St. Tropez tannery brand 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 previous six months by impairments in its Charles Worthington brand.
At the same time, sales increased 7.7 percent in Africa, where the company saw strong demand for all of its “Must Win Brands,” including Carex, Original Source shower gel and Sanctuary Spa.
This is despite the fact that trade in Nigeria has been disrupted by a highly contested general election and banknote changes that have left some of the country’s citizens struggling to access cash.
Sales grew more modestly in Asia Pacific as a strong performance in Australia coincided with pressure on consumer spending and retailers’ de-stocking, which reduced demand for Cussons Baby products in Indonesia.
PZ Cussons chief executive Jonathan Myers said: “We delivered another quarter of mid-single-digit revenue growth, in line with our longer-term ambition.
“This represents its sixth consecutive quarter of growth, with the company supported by the strength and depth of our portfolio and our ongoing strategy to invest in our brands, build internal capabilities and better serve consumers.”
While the Manchester-based company acknowledged it was “alert to continued external volatility, it continues to expect adjusted pre-tax earnings for this fiscal year to be at least in line with current market expectations.”
“Should positive trading continue in key markets such as Europe and the Americas and Australia, we could see upside risks to the forecast,” said Damian McNeela and Deidre Mullaney, analysts at broker Numis.
PZ Cussons Shares were up 4.2 percent on Thursday morning at 195 pence, though their value has still fallen by about 30 percent over the past two years.