PZ Cussons (LSE:PZC) PLC expects profits for the current year to be in line with market expectations after revenue returned to growth in the second quarter.
The Carex soap maker reported a decline in revenue and profit for the first six months after demand for hand sanitation products returned to more normal levels following unprecedented demand during the peak of the COVID-19 pandemic.
The interim numbers were also impacted by rising commodity and freight costs, challenges that are expected to continue in the second half.
But despite the backdrop of rising inflation, full-year profits are expected to meet consensus forecasts, the company said in its earnings statement.
In the six months to 30 November 2021, revenue fell by 9.3% to £283.7mln, mainly driven by a 12% fall in hygiene products, including Carex soap and hand sanitation gel, which declined against the peak of the pandemic.
Revenue in the core categories of Beauty and Baby grew by 21% and 1%, respectively, while Hygiene excluding Carex rose by 6%.
The company noted that revenue returned to mid-single digit growth in the second quarter, which limited the fall in like-for-like first-half sales to 2%. It also pointed out that revenue in the first six months was 13% higher than the pre-pandemic, two-years-ago period.
Underlying pre-tax profits from continuing operations fell by 8.3% to £32mln, reflecting the normalised demand in the UK hand hygiene category and the impact of the sale of the five:am yoghurt business in Australia.
Reported pre-tax profits on continuing operations rose by 8.3% to £35.1mln.
Chief executive Jonathan Myers noted that "challenges remain for the second half".
"Commodity and freight costs show no sign of abating in the near term and we continue to anticipate cost pressures into FY23. Our focus is on both protecting our margins but also continuing to invest in the business, to secure future growth and build the capabilities we need to deliver against our strategy," he said.
Shares rose by more than 4% to 197.20p in early trade.