REG - PZ CUSSONS PLC - Final Results
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RNS Number : 5988Z PZ CUSSONS PLC 17 September 2025
17 September 2025
RESULTS FOR THE YEAR ENDED 31 MAY 2025
Continued progress against strategy
Focused on driving operational performance and transforming the business
Jonathan Myers, Chief Executive Officer, said: "FY25 has been a year of
continued progress against our strategy. We have delivered good momentum
across most of our portfolio, driven by our renewed focus on more competitive
brand activation, strengthened innovation and successful commercial
partnerships. At the same time, we have taken action to address our cost base,
as we embed our new operating model. The UK saw a stronger profit performance,
while Indonesia has seen its fifth consecutive quarter of revenue growth, and
we continued to gain share in ANZ.
We are also delivering on the plan to simplify and transform our business. In
June we announced the sale of our 50% stake in PZ Wilmar, for $70 million,
materially strengthening our financial position. We also took the decision to
retain St.Tropez, to create more value through a new strategic direction and
operating model. We continue to review the future of our wider African
business.
We know there is more to do to fully transform PZ Cussons into a business with
stronger brands in a more focused portfolio, delivering sustainable,
profitable growth. With the strategic actions and operational improvements
delivered through 2025, we are confident in the long-term potential for PZ
Cussons."
£m Adjusted Statutory
unless otherwise stated
FY25 FY24 variance FY25 FY24 variance
Revenue 513.8 527.9 (2.7)% 513.8 527.9 (2.7)%
LFL revenue growth (LFL) 8.0% 4.4%
Operating profit/(loss) 54.9 58.3 (5.8)% 20.6 (83.7) n.m.
Operating margin 10.7% 11.0% (30)bps 4.0% (15.9)% n.m.
Profit/(loss) before tax 41.1 44.7 (8.1)% 6.5 (95.9) n.m.
Basic earnings/(loss) per share 7.34p 8.02p (8.5)% (1.38)p (13.60)p n.m.
Dividend per share 3.60p 3.60p 0.0%
Operating profit/(loss) (excluding Wilmar joint venture) 47.8 47.6 0.4% 2.6 (91.0) n.m.
Operating margin 9.3% 9.0% 30bps 5.1% (17.2)% n.m.
See page 13 for definitions of key terms and page 14 for the reconciliation
between Alternative Performance Measures and Statutory results.
'n.m.' represents non-meaningful growth rates.
With the exception of LFL revenue growth, % changes are shown at actual FX
rates.
Summary
Financial results
· LFL revenue growth of 8.0% driven by pricing in Africa and strong
brand activity in UK and Indonesia
o Excluding Africa, LFL revenue growth was 0.3% with volume growth of 0.7%.
· Reported revenue declined 2.7% due to the adverse impact of foreign
exchange movements.
· Gross debt reduction from £166.6 million to £157.1 million with
FY25 free cash flow of £42.3 million, an improvement on the comparative
period driven by favourable working capital movements. Leverage will reduce
further following the completion of the sale of the 50% stake in the PZ Wilmar
joint venture.
· Adjusted operating profit margin reduced by 30bps, to 10.7%, but grew
30bps excluding PZ Wilmar, the sale of which was announced in June 2025,
supported by a reduction in Group overheads.
· Adjusted profit before tax declined by 8.1%, reflecting the 5.8%
reduction in adjusted operating profit, resulting in an 8.5% reduction in EPS.
Delivery against the strategy
Progress against the three key priorities established for FY25 is as follows:
1. Drive our businesses in the UK, Indonesia and ANZ
· UK: stronger profit performance with better innovation and commercial
execution
o Strong execution of seasonal gifting across our brands, contributing an
additional c.£3 million to revenue growth;
o Distribution points increased by 3% driven by Original Source and
Sanctuary Spa 1 (#_ftn1) ;
o Successful New Product Development (NPD), including Original Source 2in1
foam and Imperial Leather: Ultimate moisture;
o Expanded partnerships with Intellectual Property owners, including Carex
and Childs Farm collaborations with Gruffalo and Bluey, respectively
· Indonesia: accelerated revenue growth, and well placed to take share
in a structurally attractive market
o Fifth consecutive quarter of revenue growth, with a doubling of eCommerce
revenue (now 8% of total revenue) and further growth in our Telon warming oil
innovation, supported by the initial phase of the re-launch of Cussons Baby
· ANZ: brand strength delivering market share gains
o Continued market share gains in Morning Fresh, Rafferty's Garden and
Radiant against a difficult consumer backdrop.
2. Strengthen our brand-building capabilities and embed our new
operating model
· Reduction in Group overheads, including the integration of UK Personal
Care and UK Beauty businesses delivering annualised savings of c.£3 million,
funding investment in capabilities and brand-building activity
· Organisational changes put in place during FY24 to strengthen
Group-wide brand building capabilities are enabling more competitive brand
activation and strengthening our multi-year innovation pipeline:
o Centralised R&D function, reporting to the Chief Marketing Officer, to
improve end-to-end innovation planning and development
o Significant FY26 launches planned for Cussons Baby (Indonesia), Original
Source (UK) and Morning Fresh (Australia);
o Refreshed brand-building framework being rolled-out across the business to
co-ordinate and systemise activity.
· Further progress on Childs Farm integration, with the majority of
manufacturing now in-house.
3. Deliver the portfolio transformation to maximise shareholder value
· Announced in June 2025 the sale of our 50% stake in the PZ Wilmar
joint venture for $70 million which will significantly reduce debt and
improve key credit and bank covenant metrics. Transaction remains on track to
complete in the last quarter of calendar 2025, subject to relevant approvals;
· Announcement in June 2025 to retain the St.Tropez brand with a new
strategic direction and operating model including the formation of a
partnership with The Emerson Group, a leading US-based distributor, to return
the brand to growth in the US;
· We continue to review the future of our wider African business.
Dividend
The Board is proposing a final dividend of 2.10p per share, in line with last
year's payment. The dividend will be paid on 27 November 2025 to shareholders
on the register at the close of business on 31 October 2025.
Current trading and guidance
Current trading
Trading in FY26 has been in line with our expectations, with Group LFL revenue
growth to the end of September expected to be 10% driven by growth of 39% in
Africa and 7% in APAC. This growth has been partly offset by Europe and
Americas which is expected to decline 2% reflecting strong comparatives and
challenging trading in St.Tropez. The region is expected to be in growth in
H1.
Guidance
Key guidance items for FY26 are as follows:
· Adjusted operating profit: £48-53 million, excluding the profit
contribution from PZ Wilmar 2 (#_ftn2) .
· Cost savings: Adjusted operating profit guidance includes £5-10 million
in-year savings. A significant portion of these savings will be re-invested
into marketing investment and brand-building capabilities subject to clear
return criteria.
· Net debt: expected to reduce significantly from the £112.0 million
reported for FY25, reflecting:
o Cash proceeds of c.£47 million from the sale of the Group's 50% stake in
PZ Wilmar.
o Cash proceeds of c.£15-20 million from the sale of non-operating surplus
assets of which c.£8 million has been received to date.
For further information please contact:
Investors
Simon Whittington - IR and Corporate Development Director +44 (0) 77
1137 2928
Media
Headland PZCussons@headlandconsultancy.com
(mailto:PZCussons@headlandconsultancy.com)
+44 (0) 20 3805 4822
Susanna Voyle, Stephen Malthouse and Charlie Twigg
Investor and Analyst conference call
PZ Cussons' management will host a virtual audiocast presentation for analysts
and institutional investors at 8.30am UK time to present the results and
provide the opportunity for Q&A. Details of the presentation are as
follows:
A webcast of the presentation is available at the link below and will also be
available via our corporate website: www.pzcussons.com
(http://www.pzcussons.com) .
Audience Webcast link:
https://www.netroadshow.com/events/login/LE9zwo3jGKJoKQT1F3XVt1CA7Sw7XrlPyWz
(https://www.netroadshow.com/events/login/LE9zwo3jGKJoKQT1F3XVt1CA7Sw7XrlPyWz)
.
Operator Assisted Dial-In:
Dial in: +44 20 3936 2999 / +44 808 189 0158
Access Code: 166496
Notes to Editors
About PZ Cussons
PZ Cussons is a listed consumer goods business headquartered in Manchester,
UK. We employ just under 2,500 people across our operations in Europe, North
America, Asia-Pacific and Africa. Since our founding in 1884, we have been
creating products to delight, care for and nourish consumers. Across our core
categories of Hygiene, Baby and Beauty, our trusted and well-loved brands
include Carex, Childs Farm, Cussons Baby, Imperial Leather, Morning Fresh,
Original Source, Premier, Sanctuary Spa and St.Tropez. Sustainability and the
wellbeing of our employees and communities everywhere are at the heart of our
business model and strategy, and captured by our purpose: For everyone, for
life, for good.
Cautionary note regarding forward-looking statements
This announcement contains certain forward-looking statements relating to
expected or anticipated results, performance or events. Such statements are
subject to normal risks associated with the uncertainties in our business,
supply chain and consumer demand, along with risks associated with
macroeconomic, political and social factors in the markets in which we
operate. While we believe that the expectations reflected herein are
reasonable based on the information we have as of the date of this
announcement, actual outcomes may vary significantly owing to factors outside
the control of the PZ Cussons Group, such as cost of materials or demand for
our products, or within our control such as our investment decisions,
allocation of resources or changes to our plans or strategy. The PZ Cussons
Group expressly disclaims any obligation to revise forward-looking statements
made in this or other announcements to reflect changes in our expectations or
circumstances. No reliance may be placed on the forward-looking statements
contained within this announcement.
GROUP REVIEW
Introduction from our Chief Executive Officer
PZ Cussons is now firmly in the transformation phase of its journey -
reshaping itself into a more focused, competitive and resilient business. Our
strategy remains centred on the core categories of Hygiene, Baby and Beauty
and we continue to invest in building brands, while simplifying our operations
and creating a future-fit organisation.
FY25 has been a year of continued progress against our strategy. The UK
business has delivered a stronger profit performance, supported by successful
innovation, improved execution and strong retail partnerships. Indonesia has
now recorded a fifth consecutive quarter of revenue growth, and ANZ continues
to gain market share in each of its main brands, despite a softer consumer
backdrop.
Across the Group, we are also seeing the benefits of our new operating model.
Funded by a reduction in Group overheads, this is enabling more competitive
brand activation and a clearer, more robust innovation pipeline. Major
launches such as the Carex campaign in Africa, or the Childs Farm re-stage in
the UK are early markers of success. Furthermore, we see continued opportunity
to replicate the success enjoyed so far with our partnerships with third-party
owners of Intellectual Property (IP), such as Bluey or Gruffalo, with which a
number of our brands share a target consumer.
In Nigeria, while the macro-economic environment remains challenging, the
Naira (the Nigerian currency) has shown greater stability in recent months.
Our operational interventions have helped sustain trading momentum and the
business is now self-sufficient in US Dollar funding. Firstly, we repatriated
all surplus cash to pay down UK borrowings, and subsequently we reduced a
number of intercompany liabilities. As a result, our exposure to future shocks
has been greatly reduced.
Furthermore, shortly following the end of the financial year, we announced the
sale of our 50% stake in the PZ Wilmar edible oils joint venture. This sees us
exit a non-core category, reduce the risk associated with our presence in
Nigeria, and materially strengthens our balance sheet. We also announced in
June the decision to retain St.Tropez. This ended the auction process that we
had been conducting which had been made challenging by the significant
reduction in revenue and profitability of the brand throughout the year. We
are however confident in the new direction that has been set for the brand,
with a renewed operating model built around a focused and incentivised team
with the brand leader reporting directly to me, and a re-set of our 'go to
market' capabilities in the US aided by our strategic partnership with The
Emerson Group - a leading, US-based partner to brand owners.
The strategic review of our wider Africa business is ongoing. This comprises
our Family Care businesses in Nigeria, Ghana and Kenya, and our Electricals
business in Nigeria. We remain committed to maximising long-term shareholder
value and will provide an update as appropriate.
Finally, in a year of significant organisational change and uncertainty for
many of our employees, I am particularly pleased to be able to report an
employee engagement score of 74%. This represents an increase from 73% in
FY24, and compares favourably to an industry benchmark of 71%.
We know there is more to do to fully transform PZ Cussons, but with the
strategic actions and operational improvements delivered through 2025, we are
confident in the long-term potential for the Group. On behalf of the Board, I
would like to thank our teams across the world for their continued energy and
commitment, and our partners and customers for their ongoing support.
Delivering against FY25 strategic priorities
Progress against the three key priorities established for FY25 is as follows:
1. Drive our businesses in the UK, Indonesia and ANZ
In the UK, we delivered a stronger profit performance with better innovation
and commercial execution. Improved executions around gifting occasions across
Christmas 2024, Mother's Day and Valentine's Day contributed an additional
c.£3 million of revenue in the year. Distribution of our brands continued to
expand, with successful launches for Sanctuary Spa in Tesco, Waitrose and
Asda, while Carex and Imperial Leather gained in the wholesale and discounter
channels. Childs Farm saw distribution expand further, supported by the launch
of a strategic partnership with Bluey and BBC Studios, enhancing brand
visibility and consumer engagement. Product development included the Original
Source 2in1 foam product while Carex replicated the success of its Gruffalo
product with an expansion of its partnership with Magic Light Pictures to use
Zog on products.
In Indonesia, the business recorded its fifth consecutive quarter of revenue
growth. We see continued growth following the launch in FY24 of Cussons Baby
into the warming oil segment - a very large and important part of the wider
Baby Care category in which the brand has not historically been present.
Driven by a successful '360' marketing campaign, involving TV, digital media
and shopper trials, and with distribution now reaching over 150,000 outlets,
brand penetration has reached 9% compared to 2% as at the end of FY24. More
broadly, we see continued growth in e-commerce which doubled in FY25 to
represent now approximately 8% of the total business.
In ANZ, we delivered further market share gains across Morning Fresh, Radiant,
and Rafferty's Garden. Radiant became the third-largest laundry brand in
Australia, underpinned by the successful launch of capsule innovation. Morning
Fresh retained its leadership position with approximately 50% category share,
while Rafferty's Garden continued to hold the number 1 position in baby food.
2. Strengthen our brand-building capabilities and embed our new
operating model
During the year we completed the integration of our UK Personal Care and
Beauty businesses. This has delivered c.£3 million in annualised savings,
enabling faster, more consistent execution across commercial and operational
activities and was a primary driver of the reduction in Group-wide overheads.
As part of our new operating model, during FY25, we began the roll out of a
renewed Marketing and R&D 'flywheel' to all business units. With renewed
clarity and consistency on our brand-building tools and frameworks, we expect
to drive more consistent and impactful brand-building across our portfolio. In
the second half of the year, we launched a re-stage of Childs Farm generating
strong consumer engagement. This has reinforced the strength of our brand
equity and we expect this to benefit performance into FY26. Other innovations
for FY26 are set to include Cussons Baby in Indonesia, Original Source in the
UK, and Morning Fresh in ANZ.
We are now in the final stages of integrating Childs Farm into the business.
The majority of manufacturing now takes place in-house and the day-to-day
running of the brand is led solely by our UK team, allowing us to consolidate
the number of points of interaction with suppliers and customers.
3. Deliver the portfolio transformation to maximise shareholder value
We announced in April 2024 our intention to refocus the PZ Cussons portfolio
on where the business can be most competitive and where it can create most
value for shareholders.
In June 2025, we announced the sale of our 50% stake in the PZ Wilmar edible
oils joint venture for $70 million, to the joint venture partner, Wilmar
International Limited. The transaction, once complete, will see us exit a
non-core category, simplify our portfolio, and significantly reduce our
financial leverage.
During the year, the Group ran a competitive auction process which sought to
sell the St.Tropez brand. After careful evaluation of the offers received, the
Board announced in June 2025 its intention to retain St.Tropez and set a new
strategic direction for the brand. The plan sees us establish a focused team
to lead the St.Tropez brand across the Group's international footprint,
incentivised against the identified value drivers of the business: winning
in-market execution including digital activation, re-igniting innovation and
rejuvenating the brand's equity. A critical component of the plan includes the
formation of a strategic partnership with The Emerson Group (Emerson). Emerson
is a leading, US-based partner to brand owners and will provide customer
management, logistics services and brand activation in the US. St.Tropez will
be integrated into Emerson's dedicated selling teams to key US retailers - an
arrangement which builds on PZ Cussons' existing relationship with Emerson as
the distributor of Childs Farm in the US. We are confident that this
partnership will return St.Tropez to growth in the US, combining Emerson's
distribution reach and brand activation capabilities with the brand equity of
St.Tropez.
Growing sustainably
We continue to make strong progress in embedding sustainability across our
operations, brands and culture. In FY25, we delivered a step-change in our
environmental performance, exceeding our near-term targets and reinforcing our
commitment to long-term responsible growth.
· We achieved carbon neutrality across our global operations, including
Africa, in line with our 2025 target;
· We reported a 31% reduction in Scope 1, 2 and 3 compared to our 2021
baseline, supporting our ambition to reach net zero across all scopes by 2045;
· Virgin plastic intensity was reduced by 12.5% compared to our 2021
baseline, continuing our trajectory toward a one-third reduction by 2030;
· 86.1% of our packaging is now recyclable, reusable or compostable, up
from 85.6% in FY24;
· We achieved an 88% reduction in waste to landfill compared to our
FY21 baseline, with our UK operations maintaining zero waste to landfill;
· Water consumption per tonne of finished product was reduced by 29%
compared to our FY21 baseline.
FINANCIAL REVIEW
Overview of Group financial performance
Reported financial performance in FY25 was mixed, with strong results across
most of our portfolio offset by a significant decline in St.Tropez
profitability, and the impact of the weaker Nigerian Naira compared to the
prior year. Our PZ Wilmar joint venture, the sale of which we announced in
June 2025, saw its contribution to Group adjusted operating profit reduce
compared to FY24. Excluding the contribution from PZ Wilmar, FY25 Group
operating profit and margin would have increased. Building on the progress
made during FY24, we have continued to strengthen our resilience to movements
in the Nigerian Naira rate, reducing our local foreign exchange exposure via
optimising cash balances held and reducing liabilities held in US Dollars.
Group revenue declined by 2.7% with 8.0% like for like (LFL) revenue growth
offset by weaker FX. While the Nigeria Naira was relatively stable throughout
the year, it was on average 38% weaker when compared to FY24. LFL revenue
growth reflected price/mix growth of 7.2% with multiple price increases
throughout the year in Nigeria driving price improvement to offset
double-digit inflation. Excluding Africa, LFL revenue growth was 0.3%, with
price/mix decline of 0.4% and volume growth of 0.7%.
Adjusted operating margin declined by 30bps, with an improvement in gross
margin, based on actual FX, and reduced overheads offset by increased
marketing spend and a reduction in contribution from PZ Wilmar. On a statutory
basis, operating profit was £20.6 million compared to a loss of £83.7
million in the prior year which included a FX loss of £107.5 million, which
arose primarily on the translation and settlement of USD-denominated
liabilities in our Nigerian subsidiaries following the Naira devaluation.
Free cash flow was £42.3 million compared to £41.6 million in the prior
year, due to good control of working capital. Net debt at 31 May 2025 was
£112.0 million, £3.3 million lower than its level twelve months prior. Net
debt/EBITDA was 1.7x (FY24: 1.5x).
Performance by geography
Europe and the Americas
£m unless otherwise stated FY25 FY24 Growth/ (decline)
Revenue 199.4 200.7 (0.6)%
LFL revenue growth (%) 0.6% 3 (#_ftn3) (1.9)% n/a
Adjusted operating profit 36.8 32.6 12.9%
Margin (%) 18.5% 16.2% +230bps
Operating profit 50.9 0.7 n.m.
Margin (%) 25.5% 0.3% +2,520bps
Revenue grew 0.6% on a like for like basis, with overall price/mix growth of
0.7% and volume decline of 0.1%. Growth in our UK personal care brands was
more than offset by St.Tropez and declines in a number of our tail brands
where we have sought to simplify our product portfolio.
The UK washing and bathing category grew 3% in value terms with our brands
largely holding market share within their respective sub-categories. Sanctury
Spa grew strongly, driven by further expansion of our gifting ranges, with
seasonal gifting during the Christmas, Valentine's and Mother's Day periods
growing double-digits. Imperial Leather saw the full-year benefit of its new
packaging as well as a launch of a new range, Ultimate Moisture, in H2 FY25.
Carex revenue grew for the second consecutive year, driven by an extension of
the Gruffalo products to include Zog while taking share in the core hand gel
segment. Childs Farm delivered continued revenue growth as it also benefited
from an IP partnership with another popular children's TV character, Bluey.
St.Tropez revenue declined double-digits reflecting a soft category in the US
and a number of shelf-space reductions in key US customers as a result of a
reduced New Product Development (NPD) offering. Revenue also declined in a
number of our tail brands as we sought to simplify the portfolio - including a
reduction in number of SKUs of Charles Worthington.
Operating profit was impacted by the introduction in the UK of the new
Extended Producer Responsibility (EPR) tax of c.£3 million - an annual cost
to the business which we will seek to mitigate over time through, among other
things, the review of our entire packaging portfolio in the UK. Despite this,
adjusted operating profit grew by £4.2 million with a margin increase of
230bps. This was driven predominantly by overheads reductions in the UK
business reflecting the full-year impact of the integration of the Personal
Care and Beauty businesses as well as ongoing RGM and margin improvement
activity leading to modest increases in gross margin. Childs Farm
profitability also continued to improve.
Statutory operating profit was £50.9 million. The increase from operating
profit of £0.7 million in FY24 relates primarily to a Sanctuary Spa
impairment write back of £16.5 million, compared to an impairment charge of
£24.4 million in the prior period. Costs associated with transformation
projects also reduced compared to FY24.
Asia Pacific
£m unless otherwise stated FY25 FY24 Growth / (decline)
Revenue 173.5 175.2 (1.0)%
LFL revenue growth (%) (0.1)% 4 (#_ftn4) (3.4)% n/a
Adjusted operating profit 25.2 28.0 (10.0)%
Margin (%) 14.5% 16.0% (150)bps
Operating profit 25.1 27.0 (7.0)%
Margin (%) 14.5% 15.4% (90)bps
LFL revenue decline of 0.1% was driven by price/mix decline of 1.9% and
volume growth of 1.8%. This was offset by the depreciation in the Indonesian
Rupiah and Australian Dollar resulting in a 1.0% decline in reported revenue.
Indonesia revenue grew strongly, with all major Cussons Baby segments driving
volume-led growth. Market share declined slightly reflecting ongoing
competition in the market, but the brand retained its leading position in most
of the sub-categories in which it plays.
In ANZ, revenue declined slightly despite good market share growth across all
three of our major brands. Morning Fresh revenue declined reflecting a
reduction in the underlying category. Our laundry brand Radiant delivered
modest revenue growth, continuing to gain market share with improved overall
price/mix as a result of its capsules product innovation. Rafferty's Garden
revenue declined but out-performed the category which saw mid-single-digits
decline.
Adjusted operating profit reduced by £2.8 million with a margin decline of
150bps. Our Indonesia and ANZ businesses both grew profitability, with
improvements in gross margin and overheads. However, this was offset by a
reduction in profitability in a number of our smaller Asian markets reflecting
increased sea freight and input costs, as well as lower profits in our
business supplying soap noodles to third parties reflecting favourable input
cost movements in the prior year. On a statutory basis, margin declined by
90bps, reflecting the non-recurrence of certain adjusting items related to
simplification and transformation projects.
Africa
£m unless otherwise stated FY25 FY24 Growth / (decline)
Revenue 140.9 151.7 (7.1)%
LFL revenue growth (%) 34.9% 26.5% n/a
Adjusted operating profit 23.4 30.3 (22.8)%
Margin (%) 16.6% 20.0% (340)bps
Operating profit/(loss) 18.9 (50.7) n.m.
Margin (%) 13.4% (33.4)% n.m.
Adjusting operating profit ex. share of results of joint venture 16.3 19.6 (16.8)%
Margin (%) 11.6% 12.9% (130)bps
On a statutory basis, revenue declined by 7.1% due to the 38% depreciation in
the Naira compared to FY24. This depreciation largely reflects the full-year
effect of the currency movements during FY24 as the currency has been more
stable during FY25. LFL revenue growth of 34.9% was pricing-driven and
reflects nearly 20 rounds of price increases over the last year, necessitated
by Nigerian inflation remaining elevated at over 30% for much of the year.
While volumes declined 12% following the pricing action taken, this was
mitigated by further route-to-market improvements, with 200,000 stores now
reached compared to 151,000 at the end of FY24 and 95,000 at the end of FY23.
Our 'Perfect Store' program focused on delivering a superior shopping
experience to consumers has grown from 5,000 stores in FY24 to 10,000 stores
in FY25 further mitigating volume decline.
Each of our largest brands in Nigeria delivered double-digit, pricing-led,
revenue growth, with Stella - a long-lasting moisturising jelly and now our
largest brand in Nigeria - particularly strong due to the continued focus on
extending typical purchase period beyond the dry season, known as Harmattan
season, which occurs between November and January. Despite the significant
price increases, we have held our market share position in most categories.
Gross margins improved across each of our brands, reflecting continued price
increases and the impact of our efforts to drive favourable product mix within
brands.
Elsewhere, Kenya delivered good, volume-led growth driven by strong Modern
Trade performance while Ghana saw strong double-digit LFL revenue growth with
improvements in both pricing and volumes.
Revenue in our Electricals business grew 33.2% on a LFL basis, contributing
revenue of £47.0 million. Gross margins improved as we were able to take
price increases in a sustainable manner to offset cost inflation.
The PZ Wilmar joint venture contributed £7.1 million to adjusted operating
profit - a decline from £10.7 million in FY24 reflecting the depreciation of
the Naira.
Adjusted operating profit margin declined by 340bps. This was driven by a
reduction in contribution from the PZ Wilmar joint venture, as well as the
inclusion in FY24 of a £8.9 million credit from some intra-group debt
forgiveness. Excluding these two items, adjusted operating profit increased by
£5.6 million and the margin increased by 450bps.
On a statutory basis, operating profit was £18.9 million. This compared to a
loss of £50.7 million in FY24 which was driven by the increased value of
trade and loan liabilities denominated in US Dollars following the devaluation
of the Naira. The greater stability in the currency throughout FY25, combined
with actions to reduce intra-group and third-party liabilities denominated in
non-local currency, has meant that FX revaluation has had a significantly
lower impact on our African performance compared to FY24.
Central
£m unless otherwise stated FY25 FY24 Growth / (decline)
Adjusted operating loss (30.5) (32.6) (6.4)%
Operating loss (74.3) (60.7) 22.4%
Central costs declined by £2.1 million to £30.5 million. FY24 however
included a £8.9 million one-off charge related to debt forgiveness in our
Africa business. Adjusting for this, central costs increased by £6.8 million,
the majority of which relate to a number of costs attributable to business
units being recorded centrally. On a statutory basis, central costs increased,
primarily due to the impairment charge of £35.3 million relating to the
Beauty group of CGU's goodwill offset by the non-recurrence of the FX loss in
FY24 associated with the Naira devaluation.
Other financial items
Adjusted operating profit
Adjusted operating profit for the Group was £54.9 million, a decrease of
£3.4 million from £58.3 million in the prior period. Adjusted operating
profit margin decreased by 30bps to 10.7% but grew 30bps excluding the
contribution from the PZ Wilmar joint venture which was equity-accounted until
it was classified as an asset held for sale at 31 May 2025. A reduction in
depreciation and amortisation charge was driven partly by an extension of the
useful economic life of the Group's SAP software.
Adjusting items
Adjusting items in the year totalled a net expense of £34.6 million before
tax. This comprised primarily a £18.8 million net impairment charge and £8.7
million costs associated with our ongoing transformation programme.
After accounting for adjusting items, the Group's statutory operating profit
was £20.6 million compared to a statutory operating loss of £83.7 million in
the prior year. The devaluation of the Nigerian Naira had a significant impact
on our financial results in the prior year with the Group reporting a foreign
exchange loss of £107.5 million.
Net finance expense
Adjusted net finance costs in the period were £13.8 million compared to a
charge of £13.4 million in the prior period with a reduction in both finance
income and finance expense as cash previously held in Nigeria was repatriated
and used to pay down gross borrowings in the UK.
Taxation
The tax charge in the period was £11.7 million. This compares to a credit of
£24.1 million in FY24 which reflected the material impact of statutory FX
losses suffered in Nigeria during FY24. The effective tax rate (ETR) on
adjusted profit before tax increased to 21.9% from 14.5% in FY24 due primarily
to the impact of FX losses and associated deferred tax assets impacting FY24.
Earnings per share
Adjusted basic earnings per share was 7.34p compared to 8.02p in the prior
year. The statutory loss for the year was £5.2 million, compared to a loss of
£71.8 million in the prior year. Basic loss per share on a statutory basis
was 1.38p compared to basic loss per share of 13.60p in the prior year.
Balance sheet and cash flow
Net debt as at 31 May 2025 was £112.0 million compared to £115.3 million at
31 May 2024. The Group continues to have no excess cash held in Naira
following the repatriation of cash to the UK during FY24.
£m unless otherwise stated FY25 FY24
Total cash 45.1 51.3
Of which Naira 13.1 17.2
Gross debt 157.1 166.6
Net debt 112.0 115.3
Balance sheet rates (NGN/GBP): 2,136 1,893
Total free cash flow was £42.3 million compared to £41.6 million in the
prior period. The increase reflects primarily an improvement in working
capital movements offset by lower adjusted EBITDA.
£m unless otherwise stated FY25 FY24
Adjusted EBITDA 66.5 75.9
Cash flow impact of adjusting items(4) (14.0) (12.1)
Working capital movement 5 (#_ftn5) 2.3 (9.4)
Capital expenditure (6.9) (6.1)
Share of results of joint venture (7.1) (10.7)
Other 1.5 4.0
Free cash flow 42.3 41.6
Net assets decreased to £213.5 million compared to £235.2 million at 31 May
2024 primarily due to the impairment charge of £35.3 million relating to the
goodwill of the Beauty group of cash generating units (CGUs).
The Group has a £325.0 million committed credit facility which is available
for general corporate purposes. The credit facility incorporates both a term
loan, of up to £125.0 million, with the balance as a revolving credit
facility (RCF) structure. Entered into in November 2022, the term loan is a
two-year facility and the RCF a four-year facility, with both facilities
retaining two, one-year extension options. The first option for both RCF and
term loan was executed in October 2023 and the second term loan extension was
executed in March 2025 reducing to £70.0 million from 8 November 2026. As
at 31 May 2025, the headroom on the committed facility was £167.5 million
compared to £164.0 million at 31 May 2024.
Foreign exchange
The general appreciation of Sterling against our other currencies, and in
particularly the devaluation of the Nigerian Naira, resulted in a £55.0
million reduction to FY24 revenue as set out below.
% of FY25 Average FX rates Revenue impact
revenue FY25 FY24 % change (£m)
GBP 35% 1.00 1.00 - -
NGN (Nigeria) 21% 2,015 1,257 (38)% (47.4)
AUD (Australia) 16% 1.99 1.92 (4)% (3.1)
IDR (Indonesia) 13% 20,742 19,550 (6)% (3.7)
USD (USA) 3% 1.29 1.26 (2)% (0.5)
Other 12% - - (0.3)
Total(( 6 (#_ftn6) )) 100% - - (55.0)
The rates of the Nigerian Naira used in recent reporting periods are
summarised below.
NGN/GBP FY23 FY24
FY25
Rate used for P&L 536 1,257 2,015
Rate used for balance sheet 577 1,893 2,136
Glossary
Term Definition
ANZ Australia and New Zealand
APAC Asia-Pacific region
APM Alternative performance measure
BEST values Our PZ Cussons values (Bold, Energetic, Striving and Together)
CGU Cash generating unit
EBITDA Earnings before interest, taxes, depreciation and amortisation
Employee wellbeing % score based upon a set of questions within our annual survey of employees
EPS Earnings per share
ETR Effective tax rate
Family Care Refers to our Hygiene, Baby and Beauty brands in Nigeria and Africa
Free cash flow Cash generated from operations less capital expenditure
Free cash flow conversion Free cash flow as a % of adjusted EBITDA from continuing operations
JV Joint venture
Like for like (LFL) revenue growth Growth on the prior year at constant currency, excluding unbranded sales and
the impact of disposals and acquisitions, and adjusting for the number of
reporting days in the period
Net debt Cash, short-term deposits and current asset investments, less bank overdrafts
and borrowings. Excludes IFRS 16 lease liabilities
n.m. Represents non-meaningful growth rates
Personal Care Refers to our UK business unit operating our Hygiene brands such as Carex,
Original Source and Imperial Leather
Price/mix The effect of pricing, promotional and mix activity on revenue.
Revenue Growth Management (RGM) Maximising revenue through ensuring optimised price points across customers
and channels and across different product sizes
SKUs Stock keeping units
Alternative Performance Measures
The Group's business performance is assessed using a number of Alternative
Performance Measures (APMs). These APMs include adjusted profitability
measures where results are presented excluding separately disclosed items
(referred to as adjusting items) as we believe this provides both management
and investors with useful additional information about the Group's performance
and supports a more effective comparison of the Group's trading performance
from one period to the next.
Like for like (LFL) revenue growth represents the growth on the prior year at
constant currency, excluding unbranded sales and the impact of disposals and
acquisitions, and adjusting for the number of reporting days in the period.
Adjusted Consolidated Income Statement
2025 2024
Business performance excluding adjusting items Statutory results Business performance excluding adjusting items Statutory results
Adjusting Adjusting
items items
£m £m £m £m £m £m
Revenue 513.8 - 513.8 527.9 - 527.9
Cost of sales (307.0) - (307.0) (317.8) (79.0) (396.8)
Gross profit 206.8 - 206.8 210.1 (79.0) 131.1
Selling and distribution expense (85.4) - (85.4) (82.8) - (82.8)
Administrative expense (73.6) (32.8) (106.4) (79.7) (59.6) (139.3)
Share of results of joint venture 7.1 (1.5) 5.6 10.7 (3.4) 7.3
Operating profit/(loss) 54.9 (34.3) 20.6 58.3 (142.0) (83.7)
Finance income 3.9 - 3.9 10.8 1.4 12.2
Finance expense (17.7) (0.3) (18.0) (24.2) - (24.2)
Net finance (expense)/income (13.8) (0.3) (14.1) (13.4) 1.4 (12.0)
Net monetary loss arising from - - - (0.2) - (0.2)
hyperinflationary economies
Profit/(loss) before taxation 41.1 (34.6) 6.5 44.7 (140.6) (95.9)
Taxation (9.0) (2.7) (11.7) (6.5) 30.6 24.1
Profit/(loss) for the period 32.1 (37.3) (5.2) 38.2 (110.0) (71.8)
Attributable to:
Owners of the Parent 30.8 (36.6) (5.8) 33.6 (90.6) (57.0)
Non-controlling interests 1.3 (0.7) 0.6 4.6 (19.4) (14.8)
32.1 (37.3) (5.2) 38.2 (110.0) (71.8)
Details of adjusting items are provided in Note 3 to the condensed
consolidated financial statements. Reconciliations from IFRS reported results
to APMs are set out below.
Alternative Performance Measures (continued)
Adjusted operating profit and adjusted operating margin
2025 2024
£m £m
Group
Operating profit/(loss) from continuing operations 20.6 (83.7)
Exclude: adjusting items 34.3 142.0
Adjusted operating profit 54.9 58.3
Revenue 513.8 527.9
Operating margin 4.0% (15.9)%
Adjusted operating margin 10.7% 11.0%
By segment
Europe & the Americas:
Operating profit from continuing operations 50.9 0.7
Exclude: adjusting items (14.1) 31.9
Adjusted operating profit 36.8 32.6
Revenue 199.4 200.7
Operating margin 25.5% 0.3%
Adjusted operating margin 18.5% 16.2%
Asia Pacific:
Operating profit from continuing operations 25.1 27.0
Exclude: adjusting items 0.1 1.0
Adjusted operating profit 25.2 28.0
Revenue 173.5 175.2
Operating margin 14.5% 15.4%
Adjusted operating margin 14.5% 16.0%
Africa:
Operating profit/(loss) from continuing operations 18.9 (50.7)
Exclude: adjusting items 4.5 81.0
Adjusted operating profit 23.4 30.3
Revenue 140.9 151.7
Operating margin 13.4% (33.4)%
Adjusted operating margin 16.6% 20.0%
Central:
Operating loss from continuing operations (74.3) (60.7)
Exclude: adjusting items 43.8 28.1
Adjusted operating loss (30.5) (32.6)
Alternative Performance Measures (continued)
Adjusted gross profit
2025 2024
£m £m
Gross profit 206.8 131.1
Exclude: adjusting items - 79.0
Adjusted gross profit 206.8 210.1
Revenue 513.8 527.9
Gross margin 40.2% 24.8%
Adjusted gross margin 40.2% 39.8%
Adjusted share of results of joint venture
2025 2024
£m £m
Share of results of joint venture 5.6 7.3
Exclude: adjusting items 1.5 3.4
Adjusted share of results of joint venture 7.1 10.7
Adjusted profit before taxation
2025 2024
£m £m
Profit/(loss) before taxation from continuing operations 6.5 (95.9)
Exclude: adjusting items 34.6 140.6
Adjusted profit before taxation 41.1 44.7
Adjusted Earnings Before Interest Depreciation and Amortisation (Adjusted
EBITDA)
2025 2024
£m £m
Profit/(loss) before taxation from continuing operations 6.5 (95.9)
Add back: net finance expense 14.1 12.0
Add back: depreciation 8.0 10.2
Add back: amortisation 4.1 7.1
Add back: impairment and impairment reversal 18.3 24.9
51.0 (41.7)
Exclude: adjusting items* 15.5 117.6
Adjusted EBITDA 66.5 75.9
* Excludes adjusting items relating to impairment.
Alternative Performance Measures (continued)
Adjusted earnings per share
2025 2024
pence pence
Basic (loss) per share (1.38) (13.60)
Exclude: adjusting items 8.72 21.62
Adjusted basic earnings per share 7.34 8.02
Diluted (loss) per share(1) (1.38) (13.60)
Exclude: adjusting items(2) 8.70 21.60
Adjusted diluted earnings per share 7.32 8.00
( )
(1 The basic and diluted loss per share are equal as a result of the Group
incurring a statutory loss for the year.)
(2 In 2025, this includes an adjustment of 0.00p per share (2024: 0.03p per
share) arising from bringing the diluted loss per share in line with the basic
loss per share as outlined above.)
Free cash flow
2025 2024
£m £m
Cash generated from operations 49.2 47.7
Deduct: purchase of property, plant and equipment and software (6.9) (6.1)
Free cash flow 42.3 41.6
CONDENSED CONSOLIDATED INCOME STATEMENT
2025 2024
Note £m £m
Revenue 513.8 527.9
Cost of sales (307.0) (396.8)
Gross profit 206.8 131.1
Selling and distribution expense (85.4) (82.8)
Administrative expense (106.4) (139.3)
Share of results of joint venture 5.6 7.3
Operating profit/(loss) 20.6 (83.7)
Finance income 3.9 12.2
Finance expense (18.0) (24.2)
Net finance expense (14.1) (12.0)
Net monetary gain/(loss) arising from hyperinflationary economies(1) - (0.2)
Profit/(loss) before taxation 6.5 (95.9)
Taxation 4 (11.7) 24.1
Loss for the year(2) (5.2) (71.8)
Attributable to:
Owners of the Parent (5.8) (57.0)
Non-controlling interests 0.6 (14.8)
(5.2) (71.8)
Loss per share(2)
Basic (p) 6 (1.38) (13.60)
Diluted (p)(3) 6 (1.38) (13.60)
(1 Represents the hyperinflation impact in relation to Ghana.)
(2 Wholly derived from continuing operations.)
(3 The basic and diluted loss per share are equal as a result of the Group
incurring a loss for the year.)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2025 2024
Note £m £m
Loss for the year (5.2) (71.8)
Other comprehensive (expense)/income:
Items that will not be reclassified to income statement:
Re-measurement loss on net retirement benefit obligations (4.6) (6.8)
Taxation on other comprehensive (expense)/income 1.2 1.7
Total items that will not be reclassified to income statement (3.4) (5.1)
Items that may be subsequently reclassified to income statement:
Exchange differences on translation of foreign operations(1) 0.2 (69.4)
Share of other comprehensive expense of joint venture accounted for using the (1.0) (20.0)
equity method
Cash flow hedges - fair value movements 0.2 (0.6)
Total items that may be subsequently reclassified to income statement (0.6) (90.0)
Other comprehensive expense for the year (4.0) (95.1)
Total comprehensive expense for the year (9.2) (166.9)
Attributable to:
Owners of the Parent (10.1) (133.3)
Non-controlling interests 0.9 (33.6)
(9.2) (166.9)
( )
(1) Includes a hyperinflation adjustment of £1.9 million (2024: £4.3
million) in relation to Ghana, net of £0.8 million (2024: £1.3 million)
deferred taxation.
CONDENSED CONSOLIDATED BALANCE SHEET
2025 2024
Note £m £m
Assets
Non-current assets
Goodwill and other intangible assets 7 253.9 279.3
Property, plant and equipment 43.4 42.8
Investment properties 10.0 6.6
Right-of-use assets 13.6 10.2
Net investments in joint venture - -
Trade and other receivables 2.1 32.1
Deferred taxation assets 15.8 22.2
Tax receivable 4.8 0.6
Retirement benefit surplus 27.4 32.1
371.0 425.9
Current assets
Inventories 70.0 68.5
Trade and other receivables 119.2 99.0
Derivative financial assets 0.4 -
Current tax receivable 0.1 0.2
Cash and cash equivalents 8 45.1 51.3
234.8 219.0
9.4 4.7
Assets held for sale
244.2 223.7
Total assets 615.2 649.6
Equity and liabilities
Equity
Share capital 4.3 4.3
Treasury shares (32.0) (34.5)
Capital redemption reserve 0.7 0.7
Hedging reserve (0.2) (0.4)
Currency translation reserve (158.4) (159.6)
Retained earnings 399.6 425.3
Other reserves 5.7 6.5
Attributable to owners of the Parent 219.7 242.3
Non-controlling interests (6.2) (7.1)
Total equity 213.5 235.2
Liabilities
Non-current liabilities
Borrowings 8 102.4 160.3
Trade and other payables 0.6 2.6
Lease liabilities 12.6 9.7
Deferred taxation liabilities 34.1 39.8
Retirement and other long-term employee benefit obligations 11.7 12.2
161.4 224.6
Current liabilities
Borrowings 8 54.7 6.3
Trade and other payables 155.1 158.7
Lease liabilities 2.3 2.4
Derivative financial liabilities 0.4 0.5
Current taxation payable 27.5 21.7
Provisions 0.3 0.2
240.3 189.8
Total liabilities 401.7 414.4
Total equity and liabilities 615.2 649.6
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the Parent
Capital Currency Non-
Share Own redemption Hedging translation Retained Other controlling Total
capital shares reserve Reserve(1) Reserve(2) Earnings Reserves(3) Interests equity
£m £m £m £m £m £m £m £m £m
At 1 June 2023 4.3 (36.9) 0.7 0.2 (89.0) 511.7 4.6 26.5 422.1
Loss for the year - - - - - (57.0) - (14.8) (71.8)
Other comprehensive expense - - - (0.6) (70.6) (5.1) - (18.8) (95.1)
Total comprehensive expense for the year - - - (0.6) (70.6) (62.1) - (33.6) (166.9)
Transactions with owners:
Ordinary dividends - - - - - (21.9) - - (21.9)
Share-based payments - - - - - - 1.9 - 1.9
Shares issued from ESOT - 2.4 - - - (2.4) - - -
Total transactions with owners recognised directly in equity - 2.4 - - - (24.3) 1.9 - (20.0)
At 31 May 2024 4.3 (34.5) 0.7 (0.4) (159.6) 425.3 6.5 (7.1) 235.2
At 1 June 2024 4.3 (34.5) 0.7 (0.4) (159.6) 425.3 6.5 (7.1) 235.2
(Loss)/profit for the year - - - - - (5.8) - 0.6 (5.2)
Other comprehensive income/(expense) for the year - - - 0.2 1.2 (5.7) - 0.3 (4.0)
Total comprehensive income/(expense) for the year - - - 0.2 1.2 (11.5) - 0.9 (9.2)
Transactions with owners:
Ordinary dividends - - - - - (15.1) - - (15.1)
Share-based payments - - - - - 3.4 (0.8) - 2.6
Shares issued from ESOT - 2.5 - - - (2.5) - - -
Total transactions with owners recognised directly in equity - 2.5 - - - (14.2) (0.8) - (12.5)
At 31 May 2025 4.3 (32.0) 0.7 (0.2) (158.4) 399.6 5.7 (6.2) 213.5
(1 Reserve relates to
continuing hedges.)
(2 Includes a hyperinflation adjustment of £1.9 million (2024: £4.3 million)
in relation to Ghana.)
(3 Other reserves relate to the Group's share-based payment schemes.)
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
2025 2024
Note £m £m
Cash flows from operating activities
Cash generated from operations 9 49.2 47.7
Interest paid (14.9) (21.5)
Taxation paid (10.8) (13.3)
Net cash generated from operating activities 23.5 12.9
Cash flows from investing activities
Interest received 2.2 9.0
Purchase of fixed assets (6.9) (6.1)
Proceeds from disposal of fixed assets 0.9 0.8
Cash flow from disposal of current asset investment 0.9 -
Rental income 1.1 -
Loans advanced to joint venture - (4.0)
Loans repaid by joint venture 2.5 12.7
Net cash (used in)/generated from investing activities 0.7 12.4
Cash flows from financing activities
Dividends paid to Company shareholders 5 (15.1) (21.9)
Acquisition of non-controlling interests (0.2) -
Repayment of lease liabilities (3.5) (2.4)
Repayment of borrowings (165.7) (206.0)
Proceeds from borrowings 156.0 121.4
Financing fees paid on committed credit facility (0.2) (0.8)
Net cash used in from financing activities (28.7) (109.7)
Net decrease in cash and cash equivalents (4.5) (84.4)
Effect of foreign exchange rates (1.7) (120.7)
Cash and cash equivalents at the beginning of the year 51.3 256.4
Cash and cash equivalents at the end of the year 8 45.1 51.3
1. Basis of preparation
PZ Cussons plc is a public limited company registered in England and Wales
which is listed on the London Stock Exchange and is domiciled and incorporated
in the UK under the Companies Act 2006. The principal activities of the Group
are the manufacturing and distribution of hygiene, baby and beauty products.
These condensed consolidated financial statements are presented in Pound
Sterling (GBP) and, unless otherwise indicated, have been presented in £
million to one decimal place.
The condensed consolidated financial statements are prepared in accordance
with UK-adopted International Accounting Standards including interpretations
issued by the IFRS Interpretations Committee and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those standards.
The financial statements have been prepared on a historical cost basis, except
for the following:
• Certain financial assets and liabilities (including derivative
instruments) - measured at fair value
• Defined benefit pension plans - plan assets measured at fair
value
• Hyperinflationary accounting in Ghana.
The preparation of financial statements, in conformity with IFRSs, requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting year. Although
these estimates are based on management's best knowledge of the amounts,
events or actions, actual results may ultimately differ from those estimates.
Accounting estimates and judgements
The Group's material accounting policies under IFRS have been set by
management with the approval of the Audit and Risk Committee. The application
of these policies requires management to make assumptions and estimates about
future events. The resulting accounting estimates will, by definition, differ
from the actual results. Estimates and judgements are continually evaluated
and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the
circumstances.
Key sources of estimation uncertainty
Pensions
The cost of defined benefit pension schemes and the present value of the
pension obligation are determined using actuarial assumptions in those
valuations. These include the determination of the discount rate, future
salary increases, mortality rates and future pension increases. Due to the
complexity of the valuation, the underlying assumptions and its long-term
nature, a defined benefit obligation is highly sensitive to changes in these
assumptions. All assumptions are reviewed at each reporting date. Significant
differences in actual experience or significant changes in key assumptions
could affect the retirement benefit surplus/obligations and the net interest
expense. In determining the discount rate, management considers the interest
rates of corporate bonds with at least an 'AA' rating or above and having
terms to maturity approximating to the terms of the related pension obligation
to be appropriate. The mortality rate is based on publicly available mortality
tables for the specific countries. Those mortality tables tend to change only
at intervals in response to demographic changes. Future salary increases and
pension increases are based on expected future inflation rates for the
respective countries.
Current taxation
Current taxation liabilities/assets relate to the expected amount of taxation
to be paid/received as a result of the operating performance of the Group's
entities. In calculating the appropriate taxation charge, assumptions and
judgements are made regarding application and interpretation of local laws.
In situations where tax impacts are subject to uncertain treatment,
interpretation of local rule or regulation, or otherwise remain to be
agreed with relevant tax authorities, an estimate of any resulting financial
impact may be recorded in the Consolidated Financial Statements. Any
such management estimates are made in accordance with IFRS requirements,
including IAS 12 Income Taxes and IFRIC 23 Uncertainty over Income Tax
Treatments when considering income tax and IAS 37 Provisions, Contingent
Liabilities and Contingent Assets in relation to non-income taxes. Due to the
uncertainty associated with such tax items, there is a possibility that on
conclusion of open tax matters at a future date, the final outcome may differ
significantly from the original amounts recorded. Where the eventual taxation
paid or reclaimed is different to the amounts originally estimated, the
difference will be charged or credited to the income statement in the period
in which it is determined.
Included within the current taxation liability of the Group are current
taxation estimates with net carrying values as at 31 May 2025 of £23.1
million (2024: £24.7 million), of which £21.7 million (2024: £23.2 million)
relates to a single estimate arising due to a difference in technical
standpoint between PZ Cussons plc and a tax authority on a subjective and
complex piece of legislation. Due to the known difference in technical
standpoint, this potential taxation liability has been provided for in full as
the range of possible outcomes could be a liability up to the full value of
the provided amount, however the potential future settlement remains a cash
risk.
In addition to the provision items indicated above, as at 31 May 2025, the
Group had further contingent taxation liabilities of £18.5 million
(2024: £14.4 million) and contingent assets of £0.5 million (2024: £1.2
million). The largest item relates to an overseas court verdict that found
against the Group and the possible cross-over risk into later years, all of
which have been appealed by the Group. Other primary risks include the
historical impact of licensing arrangements and more speculative claims made
by overseas tax authorities, with external third-party opinions supporting the
recognition of such items as having less than a probable risk of
crystallisation. Such positions have been disclosed as contingent
assets/liabilities in accordance with IAS 37 Provisions, Contingent
Liabilities and Contingent Assets.
Deferred taxation assets - temporary differences
Deferred taxation is provided on temporary differences between the carrying
amounts of assets and liabilities recognised for financial reporting purposes
and the amounts used for taxation purposes, on an undiscounted basis. The
amount of deferred taxation provided is based on the expected manner of
realisation or settlement of the carrying amounts of assets and liabilities,
using tax rates enacted or substantively enacted at the financial year-end
date.
Assessment of impairment of goodwill and other indefinite life assets
Goodwill and brands have all arisen from business combinations and all have
indefinite useful lives and, in accordance with IAS 36 Impairment of Assets,
are subject to annual impairment testing (which the Group carries out at the
year-end date), or more frequently if there are indicators of impairment. The
method used for impairment testing is to allocate assets (including goodwill
and brands) to appropriate CGUs based on the smallest identifiable group of
assets that generate independent cash inflows, and to estimate the recoverable
amounts of the CGUs as the higher of the asset's fair values less costs of
disposal and the value-in-use. For the purposes of goodwill impairment
testing, goodwill related to each of the Beauty brands is aggregated together
into the Beauty CGU as this is manner in which the core assets are used to
generate cash flows and is the lowest level at which goodwill is monitored by
management. Value-in-use is determined using cash flow projections from
approved budgets and plans which are then extrapolated based on estimated
long-term growth rates applicable to the markets and geographies in which the
CGUs operate.
The cash flow projections are discounted based on a pre-tax weighted average
cost of capital for comparable companies operating in similar markets and
geographies as the Group adjusted for risks specific to the particular CGU.
The assumptions used in the cash flow projections, and associated
sensitivities, are described and set out in note 7.
Critical areas of judgment
Assessment of useful lives of acquired brands
The Directors are required to assess whether the useful lives of acquired
brands are finite or indefinite. Under IAS 38 Intangible Assets, an intangible
asset should be regarded as having an indefinite useful life when, based on
all of the relevant factors, there is no foreseeable limit to the period over
which the asset is expected to generate net cash inflows for the entity.
Deferred tax assets - unused tax losses
A deferred taxation asset is recognised only to the extent that it is probable
that future taxable profits will be available against which the asset can be
used. Deferred taxation assets are recognised for unused tax losses to the
extent that it is probable that future taxable profits will be available
against which they can be used. At 31 May 2025, the Group recorded a deferred
taxation asset of £26.8 million (2024: £36.8 million) on recognised but
unused tax losses. The Group has concluded that the deferred taxation assets
will be recoverable as it is probable that the related taxation benefit will
be realised in the foreseeable future.
Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Strategic
Report. The financial position of the Group, liquidity position and available
borrowing facilities are described within the Financial Review. In addition,
note 19 of the Consolidated Financial Statements includes policies in relation
to the Group's financial instruments and risk management and policies for
managing credit risk, liquidity risk, market risk, foreign exchange risk,
price risk, cash flow and interest rate risk, and capital risk. The Group
meets its funding requirements through internal cash generation and
borrowings. Borrowings are amounts drawn under both committed and uncommitted
borrowing facilities. The Group has a £325.0 million (2024: £325.0 million)
committed credit facility which is available for general corporate purposes.
As at 31 May 2025, the Group had headroom on the committed facility of £167.5
million (2024: £164.0 million) and net debt of £112.0 million (2024: £115.3
million) comprising cash of £45.1 million (2024: £51.3 million) and
borrowings of £157.1 million (2024: £166.6 million). In assessing going
concern, the Group has prepared both base case and severe but plausible cash
flow forecasts for a period of 18 months until the end of November 2026 (the
going concern review period), which is at least 12 months from the date of
approval of the financial statements. The Group's base case forecasts are
based on the Board-approved budget and the first year of the current five-year
plan, and indicate forecasted continued compliance with its banking covenants
and sufficient liquidity throughout the going concern review period. In the
2024 Annual Report and Accounts, the Directors disclosed that, should
mitigations prove insufficient, the impact of Naira exchange rate volatility
on forecast interest cover covenant compliance represented a material
uncertainty that may have cast significant doubt upon the Group's ability to
continue as a going concern. In FY25, the Naira exchange rate has been more
stable and the Group was in compliance with all of its covenants throughout
the year. Management has prepared a base case forecast for the going concern
period and, consistent with the approach taken at 31 May 2024, has modelled
the following severe but plausible downside scenarios: 5% reduction in Group
revenue, Group gross margin decline of 200bps and a 10% decline in the Naira
exchange rate of USD/NGN 1,700 used in the base case forecast. None of these
severe but plausible scenarios, either separately or in combination, forecast
a breach in the interest cover covenant prior to management action and there
remain mitigating actions available to management should they be required.
Therefore, while the Group remains exposed to fluctuations in the Naira
exchange rate, the Directors have determined that this no longer represents a
material uncertainty. The Directors consider it appropriate to continue to
adopt the going concern basis in preparing the Consolidated Financial
Statements.
New and amended accounting standards adopted by the Group
The following amended standards and interpretations were adopted by the Group
during the year ending 31 May 2025:
• Classification of liabilities as current or non-current and non-current
liabilities with covenants (Amendments to IAS 1 Presentation of financial
statements).
• Lease liability in a sale and leaseback (Amendments to IFRS 16
Leases).
• Supplier financing arrangements (Amendments to IAS 7 Statement of cash
flows and IFRS 7 Financial Instruments)These amended standards and
interpretations have not had a significant impact on the consolidated
Financial Statements.
These amended standards have not had a significant impact on the Consolidated
Financial Statements.
On 23 May 2023, the International Accounting Standards Board issued
International Tax Reform Pillar Two Model Rules - Amendments to IAS 12. The
Group continues to apply the mandatory temporary exception to the accounting
for deferred taxation arising from the jurisdictional implementation of the
Pillar Two rules set out therein
New accounting standards and interpretations in issue but not yet effective
The following new and amended standards have been issued which are not yet
effective:
· Amendments to IAS 21 The Effects of Changes in Foreign Exchange
Rates issued in August 2023 and effective from 1 January 2025.
· Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial
Instruments: Disclosures issued in May 2024 and effective from 1 January 2026.
· Annual improvements to the following IFRS Accounting Standards -
amendments to: IFRS 1 First-time Adoption of International Financial Reporting
Standards, IFRS 10 Consolidated Financial Statements and IAS 7 Statement of
Cash flows, issued in July 2024 and effective from 1 January 2026.
· IFRS 19 Subsidiaries without Public Accountability: Disclosures
issued in May 2024 and effective from 1 January 2027.
· IFRS 18 Presentation and Disclosure in Financial Statements issued
in April 2024 and effective from 1 January 2027.
The Group continues to assess the expected impact of standards not effective
until 1 January 2027, all other new and amended standards are not expected to
have a significant impact on the Group's Consolidated Financial Statements.
2. Segmental analysis
The segmental information presented in this note is consistent with management
reporting provided to the Executive Committee, which is the Chief Operating
Decision-Maker (CODM). The CODM reviews the Group's internal reporting to
assess performance and allocate resources. The CODM considers the business
from a geographic perspective, with Europe & the Americas, Asia Pacific
and Africa being the operating segments. In accordance with IFRS 8 Operating
Segments, the Executive Committee has identified these as the reportable
segments.
The CODM assesses the performance based on operating profit before adjusting
items. Revenue and operating profit of the Europe & the Americas and Asia
Pacific segments arise from the sale of Hygiene, Beauty and Baby products.
Revenue and operating profit from the Africa segment also arise from the sale
of Hygiene, Beauty and Baby products as well as Electrical products. The
prices between Group companies for intra-group sales of materials,
manufactured goods, and charges for franchise fees and royalties are on an
arm's length basis.
Central includes expenditure associated with the global headquarters and above
market functions net of recharges to our regions. Reporting used by the CODM
to assess performance does contain information about brand-specific
performance. Global segmentation between the portfolio of brands is not part
of the regular internally reported financial information.
Business segments
2025 Europe Asia
& the Americas Pacific Africa Central Elimin-ations Total
£m £m £m £m £m £m
Gross segment revenue 202.5 175.3 140.9 40.2 (45.1) 513.8
Inter segment revenue (3.1) (1.8) - (40.2) 45.1 -
Revenue 199.4 173.5 140.9 - - 513.8
Segmental operating profit/(loss) before adjusting items and share of results 36.8 25.2 16.3 (30.5) - 47.8
of joint ventures
Share of results of joint ventures - - 7.1 - - 7.1
Segmental operating profit/(loss) before adjusting items 36.8 25.2 23.4 (30.5) - 54.9
Adjusting Items 14.1 (0.1) (4.5) (43.8) - (34.3)
Segmental operating profit/(loss) 50.9 25.1 18.9 (74.3) - 20.6
Finance income 3.9
Finance expense (18.0)
Net monetary gain arising from hyperinflationary economies -
Profit before taxation 6.5
2024 Europe Asia
& the Americas Pacific Africa Central Elimin-ations Total
£m £m £m £m £m £m
Gross segment revenue 204.1 179.2 151.7 34.2 (41.3) 527.9
Inter segment revenue (3.4) (4.0) - (33.9) 41.3 -
Revenue 200.7 175.2 151.7 0.3 - 527.9
Segmental operating profit/(loss) before adjusting items and share of results 32.6 28.0 19.6 (32.6) - 47.6
of joint ventures
Share of results of joint ventures - - 10.7 - - 10.7
Segmental operating profit/(loss) before adjusting items 32.6 28.0 30.3 (32.6) - 58.3
Adjusting Items (31.9) (1.0) (81.0) (28.1) - (142.0)
Segmental operating profit/(loss) 0.7 27.0 (50.7) (60.7) - (83.7)
Finance income 12.2
Finance expense (24.2)
Net monetary loss arising from hyperinflationary economies (0.2)
Loss before taxation (95.9)
The Group analyses its net revenue by the following categories:
2025 2024
£m £m
Hygiene 285.5 289.1
Baby 106.6 106.9
Beauty 65.4 68.3
Electricals 47.0 56.6
Other 9.3 7.0
513.8 527.9
3. Adjusting items
Adjusting items expense/(income), all of which are within continuing
operations, comprise:
2025 2024
£m £m
Simplification and transformation(1) 8.7 10.1
Acquisition and disposal-related items(2) 1.7 (1.4)
Impairment charge (net of impairment reversal)(1) 18.8 24.4
Foreign exchange losses arising on Nigerian Naira devaluation(3) - 104.1
Foreign exchange losses arising on Naira devaluation on joint venture(4) - 3.4
Foreign exchange losses arising on loans previously classified as permanent as 3.9 -
equity(1)
Foreign exchange losses arising on loans previously classified as permanent as 1.5 -
equity to joint venture undertaking(4)
Adjusting items before taxation 34.6 140.6
Taxation 2.7 (30.6)
Adjusting items after taxation 37.3 110.0
(
1) Included in administrative expense in the Consolidated Income Statement.
(2 )£1.4 million is included in administrative expenses and £0.3
million is Included in finance income in the Consolidated Income Statement
(3 )In the year ended 31 May 2024, £79.0 million is included in cost of
sales and £25.1 million is included in administrative expense in the
Consolidated Income Statement. The amount in administrative expense included
charges of £0.2 million and £1.4 million relating to the de-designation of
permanent as equity loans to a joint venture and fellow subsidiary
undertakings respectively.
(4 )Included in share of results of joint venture in the Consolidated
Income Statement.
A description of the principal adjusting items is provided below.
Simplification and transformation
For the year ended 31 May 2025, these costs primarily relate to the strategic
review of our Africa business and the St.Tropez brand. For the year ended 31
May 2024, these costs primarily relate to the following projects which started
in 2022: three-year finance transformation project, HR simplification project
and supply chain transformation project which completed during 2025.
Acquisition and disposal-related items
For the year ended 31 May 2025, the expense relates to the re-measurement of
the deferred consideration for the Childs Farm acquisition and costs incurred
in relation to the sale of the Group's joint venture undertaking expected to
be completed during the year ending 31 May 2026. In the year ended 31 May
2025, the Group made the final settlement payment of the deferred
consideration for the Childs Farm acquisition. For the year ended 31 May 2024,
the income relates to the re-measurement of the deferred consideration for the
Childs Farm acquisition.
Impairment charge (net of impairment reversal)
The current year charge relates to the impairment of the Beauty group of CGU's
goodwill of £35.3m which is partially offset by the £16.5m impairment
reversal of the Sanctuary Spa brand intangible (note 7). For the year ended 31
May 2024, the impairment charge relates to the impairment of the Sanctuary Spa
brand of £24.4m (note 7).
Foreign exchange losses arising on Nigerian Naira devaluation (including on
joint venture)
For the year ended 31 May 2024, this primarily relates to realised and
unrealised foreign exchange losses resulting from the Nigerian Naira
devaluation during the financial year on USD denominated liabilities which
existed at 31 May 2023. As outlined in footnotes 3 and 4 above, this also
includes a net charge of £0.4 million relating to the de-designation of
permanent as equity loans to a joint venture undertaking and with subsidiary
undertakings.
Foreign exchange losses arising on loans previously designated as permanent as
equity (including to joint venture)
For the year ended 31 May 2025, this primarily relates to realised and
unrealised foreign exchange losses resulting from movements in the Nigerian
Naira on loans with the joint venture undertaking and subsidiary undertakings
which were de-designated from permanent as equity in the year ended 31 May
2024.
The closing NGN/GBP rate at 31 May 2025 was 2,136 (2024: 1,893), and the
average NGN/GBP for the current year was 2,015 (2024: 1,257).
4. Taxation
2025 2024
£m £m
Current taxation
UK corporation tax
- current year 2.7 5.2
- adjustments in respect of prior years (1.6) 3.5
1.1 8.7
Overseas corporation tax
- current year 11.9 11.6
- adjustments in respect of prior years (0.2) (0.8)
11.7 10.8
Total current taxation charge 12.8 19.5
Deferred tax
Origination and reversal of temporary timing differences 1.5 (38.0)
Adjustments in respect of prior years (2.6) (6.4)
Effect of rate change adjustments - 0.8
Total deferred taxation credit (1.1) (43.6)
Total taxation charge/(credit) 11.7 (24.1)
Analysed as:
Taxation on profit before adjusting items 9.0 6.5
Taxation on adjusting items 2.7 (30.6)
11.7 (24.1)
The effective tax rate (ETR) in relation to continuing operations for the year
is 180.0% (2024: 25.1%). Before adjusting items, the ETR is 21.9% (2024:
14.5%), primarily due to the impacts of the minimum tax regime in Nigeria and
the material impairments on brand and goodwill. The statutory ETR of 180.0% is
driven primarily by the £35.3 million Goodwill impairment of Beauty brands
that is non-deductible for UK corporation tax purposes, and which originated
from business combination accounting under IFRS 3 requiring relevant assets
and liabilities to be recorded at fair value at the date of acquisition.
Absent the impairment of Goodwill, the statutory ETR for FY25 would be 28.0%.
UK corporation tax is calculated at 25% (2024: 25%) of the estimated
assessable profit for the year. Taxation for other jurisdictions is calculated
at the rates prevailing in the respective jurisdictions. The Group has chosen
to use the UK corporation tax rate for the reconciliation of the tax charge
for the year to the profit before taxation as this is the seat for the central
management and control of the Group.
2025 2024
£m £m
Profit/(loss) before tax 6.5 (95.9)
Tax at the UK corporation tax rate of 25% (2024: 25%) 1.6 (24.0)
Adjusted for:
Effect of non-deductible expenses 13.6 6.4
Effect of non-taxable income (2.9) (3.7)
Effect of rate changes on deferred taxation (all territories) - 0.8
Taxation effect of share of results of joint ventures (1.8) (2.4)
Other taxes suffered outside of the UK 3.0 2.0
Net adjustment to amount carried in respect of uncertain tax positions 1.0 2.4
Movements in deferred taxation assets not recognised 0.1 1.7
Adjustments in respect of prior years (4.4) (3.7)
Differences in overseas rates 1.5 (3.6)
Tax charge/(credit) for the year 11.7 (24.1)
5. Dividends
2025 2024
£m £m
Amounts recognised as distributions to ordinary shareholders in the year
comprise:
Interim dividend for the year ended 31 May 2024 of 2.10p (2023: final dividend 8.8 15.6
of 3.73p) per ordinary share
Interim dividend for the year ended 31 May 2025 of 1.50p (2024: 1.50p) per 6.3 6.3
ordinary share
15.1 21.9
After the balance sheet date, a final dividend for the year ended 31 May 2025
was proposed by the Directors of 2.10p per ordinary share. This results in a
total proposed dividend of £15.1 million (2024: £15.1 million). Subject to
approval by shareholders at the Annual General Meeting, the dividend will be
paid on 27 November 2025 to the shareholders on the register on 31 October
2025. The proposed dividend has not been included as a liability in the
Consolidated Financial Statements as at 31 May 2025.
6. Loss per share
Earnings per share (EPS) represents the amount of earnings attributable to
each ordinary share in issue. Basic EPS is calculated by dividing the
profit/(loss) after taxation attributable to owners of the Parent by the
weighted average number of ordinary shares in issue during the year, excluding
treasury shares owned by employee trusts.
For diluted EPS, the weighted average number of ordinary shares in issue is
adjusted to assume conversion of all dilutive potential ordinary shares. The
Group's dilutive potential ordinary shares relate to awards granted under the
Group's share incentive schemes. The basic and diluted EPS are equal as a
result of the Group incurring a loss for the year.
The average number of shares is reconciled to the basic weighted average and
diluted weighted average number of shares as set out below:
2025 2024
Number number
000 000
Average number of ordinary shares in issue during the year 428,725 428,725
Less: weighted average number of shares held by employee trusts (9,268) (9,693)
Basic weighted average shares in issue during the year 419,457 419,032
Dilutive effect of share incentive schemes 1,294 1,064
Diluted weighted average shares in issue during the year 420,751 420,096
An adjusted EPS measure is provided which calculates EPS excluding adjusting
items from profits attributable to owners of the Parent. The Directors believe
that the separate disclosure of adjusting items is relevant to an
understanding of the Group's financial performance, and excluding such items
provides a more meaningful basis upon which to analyse underlying business
performance and make year-on-year comparisons.
7. Goodwill and other intangible assets
Goodwill Software Brands Total
£m £m £m £m
Cost
At 1 June 2023 66.6 66.6 267.2 400.4
Additions - 0.4 - 0.4
Exchange differences - (1.5) - (1.5)
At 31 May 2024 66.6 65.5 267.2 399.3
Additions - 0.4 - 0.4
Exchange differences - (0.1) (2.8) (2.9)
At 31 May 2025 66.6 65.8 264.4 396.8
Accumulated amortisation and impairment
At 1 June 2023 10.2 41.1 36.4 87.7
Amortisation charge - 7.1 - 7.1
Impairment charge - - 24.4 24.4
Exchange differences 1.7 (1.0) 0.1 0.8
At 31 May 2024 11.9 47.2 60.9 120.0
Amortisation charge - 4.1 - 4.1
Impairment charge 35.3 - - 35.3
Impairment reversal - - (16.5) (16.5)
At 31 May 2025 47.2 51.3 44.4 142.9
Net book value
At 31 May 2025 19.4 14.5 220.0 253.9
At 31 May 2024 54.7 18.3 206.3 279.3
Amortisation and impairment are charged to administrative expense in the
Consolidated Income Statement. Cumulative impairment of goodwill as at 31 May
2025 was £45.5 million (2024: £10.2 million) and cumulative impairment of
brands as at 31 May 2025 was £44.3 million (2024: £60.8 million).
Software includes the Group's enterprise resource planning system (SAP), which
is internally developed, and the carrying value of this asset as at 31 May
2025 is £11.3 million (2024: £13.7 million), with five years of amortisation
remaining. In prior years, SAP was expected to be fully amortised by the end
of FY27, based on an initial plan to transition to a new release. Following a
review during FY25, this plan has been revised and SAP is now expected to
remain in use until the end of FY30 in line with the manufacturer's support
period. As a result, the remaining useful life of the asset has been extended
from two years to five years and the annual amortisation charge has been
reduced to £2.4 million from £4.9 million.
Other than software, intangible assets comprise goodwill and brands. Goodwill
and brands have all arisen from previous business combinations and all have
indefinite useful lives and, in accordance with IAS 36 Impairment of Assets,
are subject to annual impairment testing (which the Group carries out at the
year-end date), or more frequently if there are indicators of impairment.
The method used for impairment testing is to allocate assets to appropriate
CGUs based on the smallest identifiable group of assets that
generate independent cash inflows, and to estimate the recoverable amounts of
the CGUs as the higher of the assets' fair values less costs of disposal and
the value-in-use. Impairment testing is a two-step approach commencing with
the testing of brands with an indefinite useful life. Each brand is considered
its own CGU for this purpose. The second step is to test goodwill for
impairment. For the purposes of this test, goodwill acquired is allocated to
the CGUs or groups of CGUs expected to benefit from the synergies of the
business combination. For this purpose goodwill related to each of the beauty
brands is aggregated together into the Beauty group of CGU's as this is the
manner in which the core assets are used to generate cash flows and is the
lowest level at which goodwill is monitored by management.
Value-in-use is determined using cash flow projections from approved budgets
and plans which are then extrapolated based on estimated long-term growth
rates applicable to the markets and geographies in which the CGUs operate. The
cash flow projections are discounted based on a pre-tax weighted average cost
of capital for comparable companies operating in similar markets and
geographies as the Group adjusted for risks specific to the particular CGU.
Goodwill of £19.4 million (2024: £54.7 million) comprises £5.1 million
(2024: £40.4 million) in relation to the acquisitions of the Group's Beauty
brands (Charles Worthington, Fudge, Sanctuary Spa and St.Tropez), £13.5
million (2024: £13.5 million) in relation to the acquisition of Childs Farm
and £0.8 million (2024: £0.8 million) in relation to other acquisitions.
Goodwill for the Beauty brands is assessed at the Group of CGUs comprising
these brands (see table below) as this represents the lowest level at which
goodwill is monitored by management.
The carrying value of goodwill and each brand is set out in the table below.
For the impairment testing of brands, each brand is allocated to a single CGU.
For the impairment testing of goodwill, Childs Farm goodwill is allocated to
the same CGU as the brand and, as noted above, Beauty goodwill is allocated to
the group of CGUs comprising the Beauty brands:
Goodwill Brands Goodwill Brands
2025 2025 2024 2024
£m £m £m £m
Charles Worthington 9.6 9.6
Fudge 24.6 24.6
Sanctuary Spa 51.0 34.5
St. Tropez 58.4 58.4
Beauty 5.1 143.6 40.4 127.1
Original Source - 9.8 - 9.8
Rafferty's Garden - 31.1 - 33.9
Childs Farm 13.5 35.5 13.5 35.5
Other 0.8 - 0.8 -
19.4 220.0 54.7 206.3
In performing the impairment testing, the Group used the five-year plan ending
31 May 2030. Assumptions in the budgets and plans used for the value-in-use
cash flow projections include future revenue volume and price growth rates,
associated future levels of marketing support, the cost base of manufacture
and supply, and directly associated overheads. These assumptions are based on
historical trends and future market expectations specific to each CGU and the
markets and geographies in which each CGU operates.
The key assumptions applied in determining value-in-use are the long-term
growth rate and the discount rate, both of which are determined with reference
to the markets and geographies in which the CGU (or group of CGUs) operates,
and revenue growth and gross margin.
The compound annual growth rates, long-term growth rates and discount rates
applied in the value in use calculations used in impairment tests were:
CAGR(1) CAGR(1) Long-term Long-term Pre-tax Pre-tax
2025 2024 growth rate growth rate discount rate discount rate
2025 2024 2025 2024
Charles Worthington 2.5% 6.1% 2.0% 2.0% 13.0% 11.5%
Fudge 0.7% 2.3% 2.0% 2.0% 13.5% 11.7%
Sanctuary Spa 3.1% 2.8% 2.0% 2.0% 13.0% 11.5%
St. Tropez 1.3% 3.3% 2.0% 2.0% 13.5% 12.0%
Beauty group of CGUs (goodwill assessment) 2.0% 3.2% 2.0% 2.0% 13.3% 11.6%
Original Source 10.2% 9.9% 2.0% 2.0% 13.1% 11.6%
Rafferty's Garden 2.5% 4.5% 2.0% 2.5% 13.1% 11.8%
Childs Farm (brand and goodwill assessment) 11.2% 19.6% 2.0% 2.0% 13.0% 11.7%
(1) CAGR refers to the compound annual revenue growth rate over the five-year
plan period.
The results of the impairment tests as at 31 May 2025 were as follows:
Sanctuary Spa
In the year ended 31 May 2025, there was an impairment reversal of £16.5
million (2024: charge of £24.4 million) relating to the Sanctuary Spa brand,
charged to administrative expense in the Consolidated Income Statement and
included in the Europe & the Americas segment. The recoverable amount
reflected improved brand performance that exceeded prior year expectations
driven by gift set sales and the launch of a new range. The recoverable amount
of the CGU was determined to be £51.6 million based on a value-in-use
calculation, which when compared to a carrying value of £35.1 million (of
which the brand represented £34.5 million) resulted in an impairment reversal
of £16.5 million. The long-term growth rate and discount rate used in the
value-in-use calculations were 2.0% and 13.0% respectively.
Management has determined gross margin, discount rate and compound annual
revenue growth rate to be the key assumptions in the forecasts for Sanctuary
Spa. Sensitivity analysis has been carried out in the year ended 31 May 2025
and a reasonably possible change of 250bps decline in gross margin within the
five-year forecast period would reduce the impairment reversal by £8.2
million, a 200bps decline in the annual revenue growth rate over the five-year
plan period, which results in a five-year compound annual revenue growth rate
of 1.1%, would reduce the impairment reversal by £10.0 million and a 100bps
increase in the discount rate would reduce the impairment reversal by £5.7
million. A reduction of 3.4% in compound annual revenue growth rate over the
five-year plan would result in £nil impairment reversal. The same impact
would be caused by a decline of 5.1% in gross margin or an increase of 3.8% in
discount rate.
St.Tropez
For the St.Tropez brand, the recoverable amount of the CGU was determined to
be £63.4 million based on a value-in-use calculation, which is in excess of
the carrying value of £63.0 million (of which the brand represented £58.4
million) despite an unexpected revenue decline in the US during the year ended
31 May 2025.
Management has determined gross margin, discount rate and compound annual
revenue growth rate to be the key assumptions in the forecasts for St.Tropez.
Sensitivity analysis has been carried out in the year ended 31 May 2025 and a
reasonably possible change of 250bps decline in gross margin within the
five-year forecast period would result in an impairment charge of £8.6
million, a 200bps decline in annual revenue growth rate within the five-year
forecast period, which results in a five-year compound annual revenue growth
rate of (0.5)%, would result in an impairment charge of £12.4 million and a
100bps increase in the discount rate would result in an impairment charge of
£6.8 million. A reduction of 0.1% in compound annual revenue growth rate over
the five-year plan would result in zero headroom. The same impact would be
caused by a decline of 0.1% in gross margin or an increase of 0.1% in discount
rate.
Other CGUs
For the remaining CGUs, the recoverable amounts of the respective applicable
CGUs, which were determined based on value-in-use calculations, exceeded the
carrying values. Sensitivity analysis on the value-in-use calculations did not
identify potential impairment in relation to a reasonably possible downside in
the assumptions used for the projections.
8. Cash and cash equivalents and net debt
Cash and cash equivalents include cash at bank and in hand, short-term
deposits and other highly liquid investments with original maturities of three
months or less which are readily convertible into known amounts of cash with
insignificant risk of changes in value.
Borrowings comprise bank overdrafts, short-term uncommitted loans and amounts
drawn under the Group's committed credit facility. Bank overdrafts are
repayable on demand and form a part of the Group's cash management activities.
Further details on the Group's committed credit facility are provided in Note
19. The Group defines net debt as cash and cash equivalents net of borrowings,
and net debt including lease liabilities as cash and cash equivalents net of
borrowings and lease liabilities.
Group net debt comprises the following:
1 June 2024 Net cash flow Foreign Other(1) 31 May 2025
£m £m exchange £m £m
movements
£m
Cash at bank and in hand 49.4 (9.7) (1.6) - 38.1
Short term deposits 1.9 5.2 (0.1) - 7.0
Cash and cash equivalents(2) 51.3 (4.5) (1.7) - 45.1
Current borrowings (6.3) 6.2 0.1 (54.7) (54.7)
Non-current borrowings (160.3) 3.5 - 54.4 (102.4)
Net debt (115.3) 5.2 (1.6) (0.3) (112.0)
Lease liabilities (12.1) 3.3 0.2 (6.3) (14.9)
Net debt including lease liabilities (127.4) 8.5 (1.4) (6.6) (125.9)
(1) Other includes a current to non-current borrowings reclassification, lease
additions, the increase in the lease liability arising from the unwinding of
interest element and the movement in the unamortised fees on borrowings.
(2 ) At 31 May 2025, the Group had restricted cash of £1.3 million (2024:
£0.7 million). At 31 May 2025, £20.2 million (2024: £20.0 million) of the
cash and cash equivalents were held by the Group's Nigerian subsidiaries.
Borrowings are amounts drawn under both committed and uncommitted borrowing
facilities. The Group has a £325.0 million committed credit facility which is
available for general corporate purposes. The credit facility incorporates
both a term loan, of up to £125.0 million, with the balance as a revolving
credit facility (RCF) structure. Entered into in November 2022, the term loan
is a two-year facility and the RCF a four-year facility, with both facilities
retaining two, one-year extension options. The first option for both RCF and
term loan was executed in October 2023 and the second term loan extension was
executed in March 2025 reducing to £70 million from 8 November 2026. Drawings
under the term loan are permitted in GBP, and under the RCF in GBP, Euros or
USD, at interest rates at a margin of 1.30-2.10% above SONIA, EURIBOR or SOFR,
dependent on leverage and the attainment of specified sustainability
performance targets.
Non-current borrowings as at 31 May 2025 are presented net of £0.1 million
(2024: £0.7 million) of unamortised financing fees. As at 31 May 2025, this
facility was £157.5 million drawn (2024: £161.0 million). Borrowings as at
31 May 2025, which are presented net of £0.4 million (2024: £0.7 million) of
unamortised financing fees, comprise £125.0 million (2024: £125.0 million)
of term loans which are denominated in GBP at an interest rate of 6.18% (2024:
6.81%), and £32.5 million (2024: £36.0 million) of borrowings under the RCF
which are denominated in GBP at interest rates at between 6.04-6.10% (2024:
6.78-6.79%).
In addition, the Group retains other unsecured and uncommitted facilities that
are primarily used for trade-related activities in Nigeria where ordinary
trading activities are required to be supported by letters of credit (or
similar). As at 31 May 2025, these amounted to £122.1 million (2024: £161.6
million) of which £33.7 million, or 28% were used (2024: £40.3 million or
25%). The utilisation amount has decreased during the reporting period as a
result of the improvement in access to foreign currency which in turn has
facilitated the settlement of USD liabilities. As at the reporting date, there
were no bank overdrafts (2024: £nil).
9. Reconciliation of profit/(loss) before taxation to cash generated from
operations
2025 2024
£m £m
Profit/(loss) before taxation 6.5 (95.9)
Net finance expense and net monetary loss arising from hyperinflationary 14.1 12.2
economies
Operating profit/(loss) 20.6 (83.7)
Depreciation 8.0 10.2
Amortisation 4.1 7.1
Impairment of tangible and intangible assets 35.3 24.4
Impairment reversal of intangible assets (16.5) -
Impairment of current asset investment - 0.5
Impairment reversal of current asset investment (0.5) -
Profit on sale of assets (1.1) (1.8)
Difference between pension charge and cash contributions 1.1 1.7
Share-based payments 2.6 1.9
Rental income classified as investing cash flows (1.1) -
Share of results of joint venture (5.6) (7.3)
Operating cash flows before movements in working capital (46.9) (47.0)
Movements in working capital:
Inventories (5.6) 2.3
Trade and other receivables 1.6 15.3
Trade and other payables 5.6 77.5
Provisions 0.7 (0.4)
Cash generated from operations 49.2 47.7
10. Post balance sheet events
On 18 June 2025, the Group announced it had signed an agreement to sell its
50% equity interest in PZ Wilmar Limited, a Nigerian edible oils business, to
Wilmar International Limited, the joint venture partner, for cash
consideration of $70 million (£51 million). Consideration will be paid in US
Dollars. After taxes, fees and other costs, net proceeds are expected to be
approximately $64 million (£47 million). Completion is expected to take place
in the last quarter of calendar year 2025.
In April 2024, PZ Cussons announced its intention to sell the St. Tropez
brand, as part of a broader plan to refocus its portfolio. On 26 June 2025,
the Group announced that following an extensive auction process which resulted
in a number of offers being received, the decision was made to retain
St.Tropez and set a new strategic direction for the brand.
11. Directors' confirmations
Each of the Directors confirm that, to the best of their knowledge:
· The Group financial statements within the full Annual Report and
Accounts, which have been prepared in accordance with UK-adopted international
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit of the Group and
· The Strategic Report within the full Annual Report and Accounts
includes a fair review of the development and performance of the business and
the position of the Group, together with a description of the principal risks
and uncertainties that it faces.
Approved by the Board of Directors on 17 September 2025
1 (#_ftnref1) Weighted distribution for 26 weeks ended 31st May 2025 vs
prior year. Source: IRI
2 (#_ftnref2) Profit contribution prior to completion will be included
within the accounting for the disposal.
3 (#_ftnref3) To aid comparability, Europe and Americas FY25 like for like
revenue growth includes £2.0 million of revenue to a European distributor
which was recorded in APAC revenue.
4 (#_ftnref4) To aid comparability, APAC FY25 like for like revenue growth
excludes £2.0 million of revenue to a European distributor which was recorded
in APAC revenue.
5 (#_ftnref5) In FY24, the foreign exchange losses of £104.1 million in
adjusting items have been netted against the working capital movement line
item for improved comparison to FY25.
6 (#_ftnref6) Table shows the impact of translating FY24 revenue at FY25
foreign exchange rates.
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