Consumer goods business PZ Cussons (LON:PZC) delivered forecast-beating profits for FY26. The Manchester-based company also reported a significant reduction in net debt and delivered a return to dividend growth, clear evidence that CEO Jonathan Myers’ turnaround strategy is paying off.
Despite the pressures facing consumers, trading in FY27 has started in line with expectations. And PZ Cussons also highlighted the ‘good underlying momentum in the business’.
So why were shares in the Carex-to-Imperial Leather marked lower in early dealings? Well, the absence of another earnings upgrade disappointed some investors and prompted profit-taking after a recent rally.
Refreshed strategy delivering progress
PZ Cussons’ revenue rose 5.4% to £541.4 million in the year to May 2026. Adjusted operating profit surged 24.5% to a forecast-beating £59.5 million with a boost from cost savings.
Like-for-like sales grew 5.8%, driven by a nice balance between volume growth and price increases. And PZ Cussons also delivered an £87 million reduction in net debt to £25 million, driven largely by £51.2 million of proceeds from the sale of its PZ Wilmar joint venture.
The strengthened balance sheet and improved free cash flow prompted the board to increase the FY26 dividend by 2.8% to 3.70p.
What did the CEO say?
‘We delivered a strong trading performance in FY26,’ insisted Myers, ‘with revenue growth across each of our four lead markets and each of our top ten brands. Combined with structural cost savings and more favourable FX movements in Nigeria, this translated into adjusted operating profit growth of nearly 25%, excluding the contribution from the now sold PZ Wilmar joint venture.
‘We also enjoyed good early success with our refreshed strategic approach for St.Tropez which returned to growth in its key market of North America.’
An exciting turnaround is underway at PZ Cussons, which delivered growth across each of its four lead markets last year: the UK, Australia and New Zealand, Nigeria and Indonesia.
The balance sheet has been rehabilitated and the African business, which PZ Cussons decided to retain, is demonstrating resilience. Indeed, the Africa arm looks well-placed for growth given the greater stability in the Nigerian economy and the naira.
Under Myers, PZ Cussons is investing behind its strong portfolio of personal care, home care and baby care brands. These range from Carex and Imperial Leather to Morning Fresh and Sanctuary Spa.
PZ Cussons’ sharpened focus on building portfolios of locally-loved brands across developed and emerging economies is paying off.
While the lack of another profit upgrade is weighing on the stock today, we see scope for positive earnings revisions going forwards, so long as the naira holds steady.
Read the press release here: https://www.pzcussons.com/investors/
