PZ Cussons, the maker of Carex soap and Original Source shower gel, has bought Childs Farm, the UK’s leading baby and children’s personal care brand, as it rebounds from years of falling sales.
Jonathan Myers, chief executive of PZ Cussons, said that the £36.8mn acquisition — its first in eight years — was part of the company’s “transition from turnround to transformation”.
PZ Cussons ended seven years of declining revenue and five years of declining profits in 2021, when it recorded sales and earnings growth on the back of the jump in demand for hygiene products during the pandemic.
“We are delighted to take this important step to accelerate growth in our core categories and priority markets,” Myers said.
The company now holds a 92 per cent stake in Childs Farm for £36.8mn.
Childs Farm founder Joanna Jensen will make between £5.9mn and £15.1mn from the sale. She has reinvested £3.3mn of her proceeds to take an 8.1 per cent stake, which PZ Cussons will purchase by the end of May 2025.
A former banker, Jensen founded Childs Farm in 2010 to create products that would treat her daughters’ eczema and sensitive skin. It makes a range of bath, shower, skin and haircare products and, according to Kantar, has a 15 per cent share of the UK baby and child personal care market.
According to filings in Companies House, Childs Farm made more than £17mn in turnover in 2020, up 17 per cent on the previous year. It has gross assets of £7.5mn and recorded a loss before tax of almost £900,000, due in part to spending on marketing and staffing costs to expand the business.
Jensen said she was “incredibly proud of the brand that Childs Farm has become”.
Analysts at Investec said that Childs Farm was a “fantastic fit” for PZ Cussons and would bolster its online sales, as the brand generates around 20 per cent of its revenue through ecommerce.
PZ Cussons’ revenue rose 2.7 per cent to £603.3mn in the year to the end of May 2021, while adjusted pre-tax profit was up 11 per cent to £68.6mn. The company said it expected Childs Farm to be earnings accretive for the financial year ended in 2024.
Shares in London-listed PZ Cussons were roughly flat in afternoon trading.
Source: Financial Times
