Sparks - PZ Cussons

FY26 adjusted operating profit was £59.5m, above the £53–57m guidance range, which had itself been raised from £48–53m during the year. Excluding the contribution from the now-sold PZ Wilmar joint venture, this was an increase of £11.7m, a near-25% increase. Like-for-like revenue growth was 5.8%, including volume growth of 1.5%, with growth across each of the four main markets and the top 10 brands. Fx contributed £5.4m, while £8.5m of cost savings was offset by an increase in marketing investment of £3.5m, the greatest investment of recent years. The EBIT margin improved 30bp to 11.0%. EPS decreased by 3% because of the increased minority interest in Nigeria and a higher effective tax rate, although the dividend was increased by 2.8%.

The improvement to the balance sheet has been confirmed, with net debt at £25m, greatly reducing the risk from any wayward future movement in the naira. The new financial year has started in line with management expectations, with good underlying momentum in the business, and the board expects to deliver adjusted operating profit in line with current market expectations for FY27.

Further encouragement can be taken from the performance of St Tropez in the US, its most important market, where the new distribution partnership has started to produce positive results, with 6.9% growth after two years of double-digit declines. With continued like-for-like growth and a 3.5% yield, we expect attractive total shareholder returns.