Mperial Leather and Carex maker PZ Cussons has reported a decline in annual profits as cost inflation and the impact of consumer austerity impacted performance.
The company posted a pre-tax profit of £66.6 million for the year ended May 31, down 2.9% from £68.6 million a year ago. However, profits exceeded market expectations, the group said.
It also saw its revenues fall from £603 million to £593 million over the year.
Cost inflation reached record levels with raw material prices and freight costs rising, leading to an increase of about 11% in cost of sales compared to the previous year – or £40 million more – said PZ Cussons.
However, the group said it could offset price increases by implementing price changes and cost initiatives throughout the year.
PZ Cussons has delivered a resilient performance over the past year, against the backdrop of challenging conditions in our markets
Rising prices also had a knock-on effect on consumer spending as households faced tight budgets and a higher cost of living.
The company said it is doing everything it can to prevent the increased costs of logistics and supply chains from being passed on to consumers.
Chief executive Jonathan Myers said: “PZ Cussons has delivered a resilient performance over the past year, amid challenging conditions in our markets.
“We have achieved this through our strategy of investing in our brands, focusing on the core categories.
“While there is much more to do and the external environment remains challenging, we have started the current fiscal year well and continue to see significant long-term opportunities as we build for higher growth, higher margin, simpler and more sustainable business. “
The company said it expects to deliver its results for the coming year in line with expectations, despite the challenging economic environment.