Z Cussons’ first Imperial Leather television campaign in seven years has helped revive the soap brand’s declining sales as the group’s half-year profits rose despite cost pressures.
The healthcare and consumer goods firm – which also owns brands including Original Source, Child’s Farm and Kerex – said it had seen a positive response to its Imperial Leather advertising push and new launch, following years of falling sales for the range she came.
Overall, the company said it reported a 7.8% jump in pre-tax profit to £40.5 million for the six months to December 31, but a nearly 50% drop in income in its UK, European and Americas division. I.
Group-wide revenue increased by 18.8% to £336.9 million due to the recent acquisition of the Childs Farms business, favorable foreign exchange rates and additional reporting days in the period.
On a like-for-like basis, revenue increased 6.1%, but this was offset by a price increase, which offset a 5.4% decline in sales.
In the Europe and Americas division, PZ Cussons saw earnings fall by 48.8% to £4.1 million, as it faced rising costs and declining UK consumer confidence.
Like-for-like sales at Arm fell 6%, partly as a result of falling demand for its Carex hand sanitizer products even as COVID fears eased.
Shares of the group fell 6% in morning trading on Wednesday.
The group revealed that UK sales have fallen as a result of declining demand for hand sanitisers and liquid soaps after a sales boom during the height of the pandemic.
Chief executive Jonathan Myers said: “We have been describing the trend of sanitiser and liquid soap in the UK over the past year and we have seen a decline over three to six months.
“We are already seeing growth in other areas of the UK – such as through the Cussons Creations range and Childs Farm – so can be really optimistic.”
We delivered a strong financial performance with … like-for-like revenue growth, and our expectations remain unchanged for the full year
Mr Myers said the results came against a difficult trading backdrop.
“Our performance in the first half of the year has been impacted by a challenging macro environment with persistently high cost-of-living inflation and low consumer confidence,” he added.
“Yet we delivered a strong financial performance with similar-for-like revenue growth, and our expectations for the full year remain unchanged.”
The group is expecting business to improve in the second half of its fiscal year as cost pressures eased in its Europe and Americas divisions, also helped by the recent action to increase prices.
“We expect margins to improve substantially in the second half due to improved trends at Carex and St Tropez, the full-term impact of price increases during the first half and more favorable cost phasing,” the company said.
Credit: www.standard.co.uk /