PZ Cussons: Rebuilding profit on new strength in sales, cost reduction

PZ Cussons, a manufacturer of personal healthcare and consumer items, has achieved considerable progress in reducing important cost lines that were impeding profit growth in 2021. The cost savings, along with increased sales income, enabled the firm to increase profit by 113 percent in the nine months ending February 2022.

According to the findings, PZ Cussons’ major strategy for driving a turnaround in the second quarter was to increase sales revenue while decreasing cost of sales. With these improvements, the company’s management is making some headway in addressing the restraints that have hampered earnings capacity during the last three years.

Revenue increased by 24 percent to N74.54 billion in Q3’2022 from N59.98 billion in Q3’2021.

PZ Cusson was able  to increase its revenue, other income recorded the highest in six years while the company was able to cut down its administrative, selling, and distribution expenses., according to its financial records.

This article contains five charts that provide insight into PZ Cussons’ growth over the last five years.

Profit

PZ Cusson had its biggest profit in February 2020, with the lowest third-quarter profit in 2019.

Profit increased 113 percent to N3.07 billion from N1.44 billion in the nine months ending February 2021.

Profit grew to N3.52 billion in Q3’2020 from N0.81 billion in Q3’2019.

The consumer products firm earned N1.34 billion in February 2018, a 16 percent decrease from N1.60 billion the previous year.

Revenue

PZ Cussons revenue

The greatest third-quarter revenue for PZ Cusson was achieved in 2022, while the lowest was reported in February 2020.

Revenue climbed at N74.54 billion, up 24% from N59.98 billion in February 2021.

Profit fell 0.4 percent to N54.74 billion in Q3’20, from N55 billion the previous year.

PZ’s revenue increased by 10% to N63.26 billion in February 2017, up from N57.15 billion in February 2017.

Other income

PZ Cussons’ other earnings

PZ Cusson’s other income increased from N0.26 billion in February 2021 to N2.59 billion in February 2021.

PZ Cusson’s profit rises 458 percent to N5.6 billion as sales rise.

Other income fell 84.6 percent to N0.14 billion in Q3’2020, down from N0.91 billion in Q3’2019.

Other income grew from N0.15 billion in February 2017 to N0.81 billion in February 2018.

Cost of sales

The cost of Sale of PZ Cussons

PZ’s cost of sales grew by 31% to N21.52 billion in February 2021, up from N16.43 billion in February 2021.

The cost of sales increased to N46.29 billion in the third quarter of 2020, up from N42.43 billion the previous year.

The consumer products company’s cost of sales increased to N45.02 billion from N37.93 billion in the third quarter of 2017.

Sales and distribution costs

PZ Cusson was able to lower its selling and distribution costs by 63%, from N7.81 billion to N2.87 billion.

Selling and distribution expenditures were N7.87 billion in February 2019, up from N7.96 billion in February 2019.

PZ Cusson reported N6.93 billion in revenue in the third quarter of 2018, up from N6.70 billion the previous year.

Administrative Costs

Sales and distribution costs

PZ Cussons’ administrative expenditures fell 13% to N1.46 billion in Q3’2022, down from N1.68 billion the previous year.

Administrative costs were N4.45 billion in February 2019, up from N3.36 billion in February 2018.

Administrative costs grew to N5.57 billion in Q3’2018, up from N4.36 billion in Q3’2017.

Trade receivables and other receivables

PZ Cussons Trade receivables and other receivables

PZ Cusson trade and other receivables fell 15% to N12.55 billion in February 2021, from N14.90 billion.

The company’s trade and other receivables increased to N15.58 billion in the third quarter of 2020, up from N15.17 billion in the third quarter of 2019.

Trade and other receivables climbed to N17.85 billion in the third quarter of 2018 from N17.22 billion the previous year.