Jonathan Myers, who is pursuing a long-term turnaround strategy at the listed company, told the Standard it is facing “unprecedented” raw materials price hikes, as well as seeing the overall cost of shipping and trucking goods to the UK from Asia and Africa rise by around 10%.
Myers said: “We are trying to work lots of levers to offset [these cost rises] and protect margins. Where necessary there will be price increases, but we are really trying to avoid this.”
The chief executive said the company is managing to get products to shelves on time, but that well-publicised lorry driver shortages in Britain are a concern as “there literally aren’t enough drivers to pick up containers from ports”.
“There may be little bit of phasing, but so far we have got this under control,” he said.
The consumer goods company, which recently ran a St Tropez product launch in the US with model Ashley Graham, on Wednesday said group revenues for the three months to August 28 were down 9% compared to last year – when demand for Carex was still at an all-time high – although they were still 13% ahead of pre-Covid levels at £131.4 million.
Bosses expect the firm to return to year-on-year sales growth in the next quarter, “assuming no further disruption”.
Myers concluded: “We’re hitting the bumps with commodities and freight disruption, but we’re managing our way through those bumps and remain confident that the strategy is working and remains the right strategy to continue with.”
Third Bridge analyst, Alex Smith, said: “Along with most consumer categories, PZ is having to wrestle with commodity cost inflation.
“Investors will be watching how successfully the group protects margins and what impact this might have if competitors take a more aggressive approach to market share.”
Shares in PZ Cussons fell by as much as 4.5% on Wednesday morning.
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