PZ Cussons scrubs up 44th year of dividend growth

International consumer products group PZ Cussons revenue fell 1.5% in its full year to £809.2m, it reported on Tuesday, although the constant currency and like-for-like changes were both 0.9%.

The FTSE 250 company’s operating profit was down 2% on a reported basis at £106.3m in the 12 months to 31 May, and down 0.9% on a constant currency and like-for-like basis, while profit before tax was ahead 0.5% at £103.5m, or up 1.7% at constant exchange rates and like-for-like.

Adjusted basic earnings per share fell 2.1% to 16.85p, or 2.2% at constant currencies and on a like-for-like basis.

“The group has delivered a solid set of results with profits slightly ahead of the previous year,” said group chair Caroline Silver.

“This is despite a significant year-on-year currency devaluation in the group's largest market Nigeria and general tough trading conditions in most of the markets in which we operate.”

“Our strategy of ongoing brand innovation and renovation continues to underpin the group's ability to maintain or grow our market shares.”

Looking at the statutory results after exceptional items, operating profit was up to £90.8m from £89.2m, while profit before tax grew to £88m from £83.7m.

Statutory basic earnings per share were down to 15.34p from 16.16p, and the board paid a total dividend per share of 8.28p, up marginally from the 8.11p paid in 2016.

Net debt stood at £143.8m on 31 May, down from £147.1m a year earlier.

“The successful completion of the three year project to implement a standard SAP solution across the group marks an important step towards completion of the transformation agenda and positions the group well to deliver future growth,” Silver said.

“Despite consumer confidence remaining fragile in most markets, the group remains well placed to deliver full year expectations and, with a strong balance sheet, to pursue growth opportunities as they arise.”

The board claimed to have had a “solid performance”, with profit before tax slightly ahead of the prior year despite a “challenging” macro environment - particularly in the group’s largest market of Nigeria.

Its brand shares were said to be either maintained or growing in all of the group’s major markets and categories, with the successful on-time completion of its three-year project to implement SAP in all markets.

PZ Cussons said it had a strong balance sheet, with net debt at 1.1x EBITDA, while its dividend increase of 2.1% marked the 44th consecutive year of year-on-year dividend improvements.

“During the year we completed a number of significant launches including a refresh of the group's largest brand Imperial Leather, a relaunch of the Cussons Kids range in Indonesia and the launch of a new range of products within the Beauty division specifically targeting the millennial consumer.

“In Nigeria, our experience and flexibility to ensure our products are sold in the right sizes and at the right price points has enabled us to deliver a creditable result against the backdrop of a weaker currency and poor liquidity,” Silver said.

Regionally, PZ Cussons Africa said all of its businesses in Nigeria traded “relatively well”, despite “significant” year-on-year currency devaluation and a lack of liquidity.

Its brand portfolio on the continent was said to be working well, with product offerings at “all price points” catering for consumers under significant inflationary pressure.

In Asia, the company claimed a strong second-half performance, which was driven by the continued improvement of results in Australia, while it also had another year of “good growth” in Indonesia, where new product launches performed well.

And in Europe, PZ Cussons said it saw “robust” performance in the UK washing and bathing division, underpinned by product renovation and in the face of “competitive” market conditions.

The company also claimed to have achieved “significant innovation” within its Europe beauty division, including the launch of a new range of products targeting the millennial customer, under the ‘Being by Sanctuary’ sub-brand.

“The board is pleased to declare a final dividend of 5.61p, which represents the company's 44th consecutive year of full year dividend growth,” Caroline Silver added.