PZ Cussons PLC leaves dividend unchanged as handwashing boosts sales

PLC () kept its half-year dividend flat despite reported frothier sales and profits as hand wash and sanitiser demand soared during the coronavirus pandemic.

However, the performance of beauty products such as St Tropez and Sanctuary was mixed, with revenue lower in the UK and Australia but on-line performance improving.

Total group sales jumped 10% to £312.9mln for the six months to end-November, with growth from all three geographic regions, led by Europe & Americas due to hand-washing trends boosting the Carex brand.

But there were also strong performances from Morning Fresh washing up liquid, Cussons Baby wash and St Tropez fake tan.

Underlying profit before tax rose 16% to £34.9mln, though reported PBT declined 7.5% to £28.4mln due to exceptional costs primarily related to Nigeria and a profit in the previous year on disposal of the Greece business.

Net debt fell around £120mln to £18mln, though this was flattered by the timining of a delayed dividend payment of £13mlm.

The interim dividend was kept at 2.67p per share, having cut its payout last year.

Chair Caroline Silver hailed the arrival of new chief executive Jonathan Myers in May and his new management team having “stabilised” the group, expressing comfort with the current market PBT forecasts, which range from £62mln to £63.5mln.

“In the second half of this year, with our recent strategy review moving into execution, we expect further progression in brand building, the continued turnaround of key brands and the implementation of our simplification project in Nigeria,” she said.

Shares in the company were up 1.5% to 241.5p in early trade on Tuesday. 

Broker Shore Capital said: “Trading on a PER of 19.5x and an EV/EBITDA multiple of 11.6x we are encouraged by the strong momentum within PZC, however ahead of further visibility on the ongoing strategic review (expected 25th March), we reiterate our ‘hold’ recommendation.”