Guidance for PZ Cussons’ FY26 adjusted operating profit has been nudged higher again on the back of 6.3% like-for-like revenue growth in Q3, slightly slower than H1 but achieved against more demanding comparatives. FY27 consensus is unchanged, reflecting the beginnings of macro concerns.

PZ Cussons is demonstrating the benefits of sharper operational focus and improved execution. Its newly stated ambition is to deliver like-for-like revenue growth in the mid-single digits and high single-digit growth in earnings per share annually, a double-digit total return for shareholders given the 3.6p dividend. With the balance sheet now back to strength and a clear strategy for growth, investor confidence has responded positively, with the share price reaching its highest level in 16 months. We believe sentiment has started to turn.

PZ Cussons (PZC) is in transition. Both St Tropez (largely a US business) and Africa (mainly Nigeria) are potentially worth more to others than they are to PZC. Their disposal will reduce earnings volatility and balance sheet risk. Unsurprisingly, the market’s focus is on when and how much but the emphasis should shift to PZC’s potential post-disposals. PZC has been spread too thinly, making it overly complex for its size. Management believes that simplification will deliver a more effective operation capable of sustained revenue growth, driven by innovation and profitability, moving back towards historical peaks. Such higher margins could result in better valuation multiples. PZC trades on a prospective P/E of 12x.