OTCPK:PZCU.F

Stock Analysis Report

Executive Summary

PZ Cussons Plc manufactures and distributes personal care, home care, food and nutrition, and electrical products worldwide.

Rewards

Trading at 36.6% below its fair value

Earnings are forecast to grow 25.49% per year

Pays a high and reliable dividend of 3.91%

Risk Analysis

Has a high level of debt

Dividend of 3.91% is not well covered by earnings

Large one-off items impacting financial results

Profit margins (3.8%) are lower than last year (5.4%)



Snowflake Analysis

Established dividend payer with adequate balance sheet.

Share Price & News

How has PZ Cussons's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PZCU.F has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

PZCU.F

-1.0%

US Household Products

-1.2%

US Market


1 Year Return

n/a

PZCU.F

29.6%

US Household Products

22.3%

US Market

Return vs Industry: Insufficient data to determine how PZCU.F performed against the US Household Products industry.

Return vs Market: Insufficient data to determine how PZCU.F performed against the US Market.


Shareholder returns

PZCU.FIndustryMarket
7 Day0%-1.0%-1.2%
30 Day0%-0.5%1.6%
90 Dayn/a1.5%8.8%
1 Yearn/a32.8%29.6%25.0%22.3%
3 Yearn/a54.1%41.5%49.9%40.3%
5 Yearn/a73.1%49.3%77.6%58.0%

Price Volatility Vs. Market

How volatile is PZ Cussons's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is PZ Cussons undervalued compared to its fair value and its price relative to the market?

36.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PZCU.F ($2.6) is trading below our estimate of fair value ($4.1)

Significantly Below Fair Value: PZCU.F is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PZCU.F is poor value based on its PE Ratio (34x) compared to the Household Products industry average (26.5x).

PE vs Market: PZCU.F is poor value based on its PE Ratio (34x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: PZCU.F is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: PZCU.F is good value based on its PB Ratio (2.1x) compared to the US Household Products industry average (4x).


Next Steps

Future Growth

How is PZ Cussons forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

25.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PZCU.F's forecast earnings growth (25.5% per year) is above the savings rate (2.7%).

Earnings vs Market: PZCU.F's earnings (25.5% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: PZCU.F's revenue (0.9% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: PZCU.F's revenue (0.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PZCU.F's Return on Equity is forecast to be low in 3 years time (13%).


Next Steps

Past Performance

How has PZ Cussons performed over the past 5 years?

-15.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PZCU.F has a large one-off loss of £37.2M impacting its May 31 2019 financial results.

Growing Profit Margin: PZCU.F's current net profit margins (3.8%) are lower than last year (5.4%).


Past Earnings Growth Analysis

Earnings Trend: PZCU.F's earnings have declined by -15.1% per year over the past 5 years.

Accelerating Growth: PZCU.F's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PZCU.F had negative earnings growth (-35.2%) over the past year, making it difficult to compare to the Household Products industry average (-20.8%).


Return on Equity

High ROE: PZCU.F's Return on Equity (5.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is PZ Cussons's financial position?


Financial Position Analysis

Short Term Liabilities: PZCU.F's short term assets (£346.9M) exceed its short term liabilities (£207.6M).

Long Term Liabilities: PZCU.F's short term assets (£346.9M) exceed its long term liabilities (£288.0M).


Debt to Equity History and Analysis

Debt Level: PZCU.F's debt to equity ratio (45.6%) is considered high.

Reducing Debt: PZCU.F's debt to equity ratio has increased from 22.2% to 45.6% over the past 5 years.

Debt Coverage: PZCU.F's debt is well covered by operating cash flow (31.7%).

Interest Coverage: PZCU.F's interest payments on its debt are well covered by EBIT (13.8x coverage).


Balance Sheet

Inventory Level: PZCU.F has a high level of physical assets or inventory.

Debt Coverage by Assets: PZCU.F's debt is covered by short term assets (assets are 1.7x debt).


Next Steps

Dividend

What is PZ Cussons's current dividend yield, its reliability and sustainability?

3.91%

Current Dividend Yield


Dividend Yield vs Market

company3.9%marketbottom25%1.4%markettop25%3.7%industryaverage2.3%forecastin3Years4.0%

Current dividend yield vs market & industry

Notable Dividend: PZCU.F's dividend (3.91%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: PZCU.F's dividend (3.91%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

Stable Dividend: PZCU.F's dividends per share have been stable in the past 10 years.

Growing Dividend: PZCU.F's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (132.7%), PZCU.F's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PZCU.F's dividends in 3 years are forecast to be covered by earnings (60.4% payout ratio).


Next Steps

Management

What is the CEO of PZ Cussons's salary, the management and board of directors tenure and is there insider trading?

2.8yrs

Average board tenure


CEO

G. Kanellis (54yo)

13.3yrs

Tenure

UK£802,335

Compensation

Mr. G. Alex Kanellis has been Group Chief Executive Officer of PZ Cussons plc at PZ Cussons Nigeria Plc since June 1, 2006. Mr. Kanellis served as Regional Director for Asia at PZ Cussons PLC since 2003 an ...


CEO Compensation Analysis

Compensation vs Market: G.'s total compensation ($USD1.00M) is below average for companies of similar size in the US market ($USD2.53M).

Compensation vs Earnings: G.'s compensation has been consistent with company performance over the past year.


Board Age and Tenure

2.8yrs

Average Tenure

57yo

Average Age

Experienced Board: PZCU.F's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • C. Nicoloulias (72yo)

    Regional Director of Pacific

    • Compensation: UK£486.60k
  • G. Kanellis (54yo)

    Group CEO & Executive Director

    • Tenure: 13.3yrs
    • Compensation: UK£802.34k
  • Christos Giannopoulos (52yo)

    Chief Executive Officer of PZ Cussons Africa

    • Sam. Plant

      Corporate Services Director & Company Secretary

      • Jola Gillespie

        Chief Information Officer

        • Cathy Doyle-Heffernan

          Group Human Resources Director

          • Alan Bergin

            Interim CFO & Commercial Finance Director

            • Tenure: 0.3yrs

          Board Members

          • G. Kanellis (54yo)

            Group CEO & Executive Director

            • Tenure: 13.3yrs
            • Compensation: UK£802.34k
          • Tamara Minick-Scokalo (60yo)

            Non-Executive Director

            • Tenure: 1.3yrs
            • Compensation: UK£57.05k
          • Caroline Silver

            Non-Executive Chair

            • Tenure: 2.7yrs
            • Compensation: UK£255.20k
          • Jez Maiden (57yo)

            Non-Executive Director

            • Tenure: 2.8yrs
            • Compensation: UK£64.59k
          • Helen Owers (56yo)

            Non-Executive Director

            • Tenure: 7.7yrs
            • Compensation: UK£65.94k
          • John Ross Nicolson (66yo)

            Senior Independent Director

            • Compensation: UK£67.34k
          • Dariusz Kucz

            Non-executive Director

            • Tenure: 1.3yrs
            • Compensation: UK£59.45k

          Company Information

          PZ Cussons Plc's company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: PZ Cussons Plc
          • Ticker: PZCU.F
          • Exchange: OTCPK
          • Founded: 1879
          • Industry: Household Products
          • Sector: Household
          • Market Cap: UK£886.882m
          • Listing Market Cap: UK£1.107b
          • Shares outstanding: 418.34m
          • Website: https://www.pzcussons.com

          Number of Employees


          Location

          • PZ Cussons Plc
          • Manchester Business Park
          • 3500 Aviator Way
          • Manchester
          • Greater Manchester
          • M22 5TG
          • United Kingdom

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          PZCLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
          PZCU.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
          PZCLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
          1ZQDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
          PZCU.YOTCPK (Pink Sheets LLC)ADSUSUSDMar 2011

          Biography

          PZ Cussons Plc manufactures and distributes personal care, home care, food and nutrition, and electrical products worldwide. It offers personal care products, including bar soaps, liquid hand washes, shower gels, and skincare and haircare products under the St.Tropez, Sanctuary Spa, and Being by Sanctuary Spa brands; dish care products under the Morning Fresh brand name, as well as beauty care products; and laundry soaps, and bulk and packaged washing powders under the Canoe, Zip, and Tempo brands, as well as fragrances. The company also provides dairy products, such as organic yoghurts, and granolas and smoothies under the Nunu and Olympic brands; cooking oils under the brands of Mamador and Devon King’s; edible oils, spreads, vinegars, and cheeses under the Minerva brand name; and baby foods comprising snacks under the Rafferty’s Garden brand name. In addition, it offers computing and mobile products, televisions, DVD players, home entertainment systems, refrigerators, freezers, air conditioners, generators, inverters, stabilizers, automatic voltage regulators, fans, air coolers, washing machines, water dispensers, water heaters, gas cookers, and microwaves under the Haier Thermocool brand, as well as pharmaceuticals and fats. The company was formerly known as Paterson Zochonis Plc and changed its name to PZ Cussons Plc in 2002. PZ Cussons Plc was founded in 1879 and is headquartered in Manchester, the United Kingdom. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2019/09/18 23:56
          End of Day Share Price2019/06/21 00:00
          Earnings2019/05/31
          Annual Earnings2019/05/31


          Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.