PZ Cussons (LON:PZC) reported a stronger first-half performance for financial year 2026, supported by broad-based revenue growth, higher adjusted operating profit, and a materially improved balance sheet following disposals. Management also raised full-year operating profit guidance and reiterated expectations for GBP 5 million to GBP 10 million of savings in FY26, while flagging a step-up in marketing spend in the second half that is expected to weigh on half-two profitability versus the prior year.
Broad-based growth and improved profitability
Chief Executive Officer Jonathan Myers said the group delivered “a strong financial performance” in the first half, with growth across all three reporting regions, its four lead markets (the UK, Australia, Indonesia, and Nigeria), and each of its top 10 brands. Like-for-like revenue rose 9.5% to GBP 269 million, up from GBP 249 million in the prior-year period, with a balance of price/mix and volume.
Adjusted profit before tax increased to GBP 30 million from GBP 20 million, helped by a lower interest charge and improved operating performance. Adjusted earnings per share were GBP 0.437, with Sarah noting EPS growth lagged profit growth due to a higher group tax charge and minority interest “leakage” in Nigeria.
Regional highlights: UK gifting strength, Australia innovation, and Nigeria recovery
In Europe and the Americas, revenue rose to GBP 102.5 million with like-for-like growth of 1.7%. Management pointed to a strong performance from Sanctuary Spa, which grew 30% in the half driven by Christmas gifting. Myers said the brand delivered a record gifting period, with revenue up more than 30% during Christmas, aided by improved execution—such as shipping 98% of Christmas packs before December—and an expansion of gifting initiatives to Original Source, Imperial Leather, and Cussons Creations.
The company described the UK market as “highly competitive,” with Myers highlighting a bifurcation in consumer behavior—value-seeking shoppers trading down and others “splurging on small luxuries.” He also pointed to increased competitive activity from both large multinationals and newer “Gen Z or Gen Alpha startup brands” that can disrupt shelf space quickly.
In APAC, revenue was GBP 88 million, up 5.2% like-for-like but flat in reported currency, reflecting depreciation of the Australian dollar and Indonesian rupiah. Myers cited innovation as a key driver in Australia, including product and pack-format changes for brands such as Morning Fresh and Original Source, and said the Americas business delivered its third consecutive quarter of revenue growth. Sarah added that adjusted operating profit in APAC declined by GBP 1 million, including some legacy VAT charges in smaller Asian businesses.
Africa revenue increased to GBP 79 million, with like-for-like growth of 28% driven by annualization of pricing taken in FY25 and a return to volume growth. Sarah said reported revenue grew 30% as the naira moved from stability to appreciation. Adjusted operating profit in Africa increased by GBP 7.6 million (excluding the PZ Wilmar contribution from the base), with around GBP 6 million of the improvement due to FX revaluation gains on US dollar-denominated balance sheet liabilities as the naira strengthened versus the prior-year period.
On the FX benefit, management described the year-on-year swing as a GBP 2 million credit in the current half versus a GBP 4 million debit in the prior-year half. Sarah also said the company is working to reduce profit-and-loss sensitivity to naira movements by extinguishing liabilities through recapitalisation steps such as write-offs, debt-to-equity, and rights issues.
Portfolio actions and St. Tropez progress
Myers said the sale of the group’s share in the PZ Wilmar joint venture to Wilmar, alongside ongoing disposal of other non-core assets in Africa and Asia, has strengthened the balance sheet and made the business more “focused and more resilient.”
On St. Tropez, which the company decided to retain and reposition, management acknowledged the brand did not grow revenue in the half. Myers said St. Tropez grew 12% in the US as the transition to the Emerson Group “went smoothly,” but revenue was down over 30% elsewhere, partly due to elevated inventories entering the year and the need to rebuild retailer support. He cited early signs of improvement, including a shelf reset in Boots that has returned to retail sales growth in recent weeks, and pointed to planned innovation and 30th anniversary packs and activations for the summer season.
Cash flow, net debt reduction, and new leverage “guardrails”
Free cash flow was GBP 23 million in the half, and net debt fell to GBP 84 million, with net leverage of 1.1x. Sarah said the half-one period includes a seasonal working capital outflow because the reporting dates fall immediately before peak trading periods in Nigeria and the UK Christmas gifting season.
The company received GBP 27.6 million of disposal proceeds in the period, including GBP 15.8 million from surplus non-operating asset sales in Africa and Asia and GBP 11.8 million from initial PZ Wilmar completion proceeds. Myers separately said the company has received GBP 48.5 million of cash proceeds to date from the PZ Wilmar sale, with a small additional amount expected from ancillary land assets. Sarah also noted that since the end of November 2025, the company received a further GBP 37 million from Wilmar, implying a pro forma half-one net debt position of GBP 48 million and leverage below 1x.
As part of a newly announced capital allocation policy, the company said it will define leverage as net debt excluding cash balances held in Nigeria. On that basis, leverage would have been 1.4x at the half-year.
Guidance raised; dividend unchanged as marketing spend steps up
The company raised full-year adjusted operating profit guidance to GBP 53 million to GBP 57 million, from the prior range of GBP 50 million to GBP 55 million, and said trading through the end of January was in line with expectations. Sarah noted the guidance implies a year-on-year decline in half-two profit due largely to marketing investments, which are expected to step up in the second half.
Management said the interim dividend was unchanged at GBP 0.05 per share. In response to questions, Sarah said the decision reflected prudence given the outlook for full-year earnings per share, including the impact of the profit mix and minority interest leakage in Nigeria. She said the company is committed to a progressive dividend policy over time.
On Nigeria pricing, Myers said the group’s intent is to drive revenue in line with or slightly ahead of inflation, balancing pricing and volume to support “real growth,” and being mindful of competitive moves if rivals reduce prices due to more benign FX for commodity inputs. He also said the company expects its highest marketing and communications spend in four to five years in the second half, including increased investment across core UK brands and initiatives such as testing Sanctuary Spa on TikTok Shop, drawing on prior success in Indonesia where TikTok Shop revenues were up 60% in the first half.
About PZ Cussons (LON:PZC)
PZ Cussons plc manufactures, distributes, markets, and sells baby, beauty, and hygiene products in Europe, the Americas, the Asia Pacific, and Africa. The company offers toiletries, pharmaceuticals, electrical goods, edible oils, fats and spreads, nutritional products, shampoos, body washes, toothpastes, toothbrushes, skin and hair care products, food pouches, cereals, snacks, flavors, and fragrances; beauty soaps, lotions, wipes, creams, shower gels, foam-bursts, bar soaps, deodorants, bath infusions, handwashes, and conditioners; ointments; dishwashing liquids, dishwasher tablets, dishwasher gels, dishwasher capsules, rinse aids, liquid detergents, laundry soaps, and laundry solutions; and cooking and vegetable oils.
