9th Apr 2015 11:23
LONDON (Alliance News) - PZ Cussons Thursday said its overall performance for the period from January 28 to April 8 has been in line with expectations and its country performance has been in line with "the comments made in the interim results announcement", in which it posted a drop in profit as it continues to be hit by weakened currencies.
In January, the maker of bath products Imperial Leather and Original Source reported a drop in profit and revenue for the first half of its financial year, which it said resulted from business disposals and weak trading in Africa, particularly in Nigeria due to the devaluation of the naira. It reported growth in operating profit in Europe and Asia however.
On Thursday, the company said that trading in Nigeria, the group's largest market, has resumed as normal following a "short period of lost trading days during the presidential election process", and that the naira exchange rate is currently stable.
It had said in January that while it faces "short-term challenges", it remains confident about the medium and long term opportunities in Africa.
"Since we last reviewed forecasts, the naira has weakened further (by 10%) although the election outcome appears to have helped steady it now. This has a limited impact on the current year but, for FY16, it will reduce our Nigerian EBIT assumptions by GBP4 million," says Investec analyst Nicola Mallard.
"Offsetting some of this, however, is the positive impact from the acquisition of the Nutricima JV, which we estimate will boost pretax profit by GBP0.5 million," the analyst adds.
Mallard also mentions that currencies in Asia have weakened but not by the same degree as the naira, but including all of the currency movements, Investec's pretax profit forecast for financial year 2016 falls to GBP115 million from GBP121 million, with earnings-per-share in the same period falling to 18.7p from 19.5p.
PZ Cussons said the outlook for its current financial year remains in line with expectations, and a further update will be made on June 11 after the close of its financial year.
Shares in PZ Cussons were trading down 0.3% at 349.20 pence Thursday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Pz Cussons