15th Mar 2018 09:07
LONDON (Alliance News) - Shares in consumer products firm PZ Cussons PLC plunged on Thursday as difficult trading in both the UK and Nigeria prompted a profit warning.
Shares were down 15% in early trading on Thursday at a price of 233.95 pence each.
Pretax profit for the financial year ending in May is now expected to be between GBP80.0 million and GBP85.0 million, with the company having posted pretax profit of GBP88.0 million in its last financial year.
PZ Cussons said its Washing & Bathing division has seen lower purchases due to consumer caution in the UK, while significant cost inflation in Nigeria continues to hurt demand in the West African nation.
New product launches in the UK have been well-received, it said, but have not had a strong enough impact on sales to offset declining volumes and margins.
In Nigeria, consumer income's remain under pressure and as a result the usual peak season uplift did not occur, and thus inventory levels remain high especially in milk.
The company announced a number of initiatives to address this, including a review of product costs, a review of its Nigerian milk business, and a re-focus onto fewer but bigger projects.
Results in the rest of its geographies remain "robust", PZ Cussons said, with performance in Australia and Indonesia ahead of the previous year.
In its results for the six months to November, adjusted pretax profit excluding exceptional items fell 15% at reported exchange rates to GBP34.0 million, and were down 14% like-for-like, as the company's Washing & Bathing division struggled in the UK and poor Nigerian trading affected first half numbers.
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