PZ Cussons warns of lower HY operating profit, shares fall

The PZ Cussons Plc logo sits on the exterior of their Agecroft factory near Manchester, U.K., on Tuesday, Sept. 13, 2016. Through its subsidiaries, PZ Cussons manufactures soaps, detergents, toiletries, pharmaceuticals, refrigerators, and air conditioners. Photographer: Matthew Lloyd/Bloomberg

Soap and shampoo maker PZ Cussons said firsthalf operating profit was expected to fall 10 per cent as reduced margins in its European and African businesses weighed on profitability.

The company, which sells brands such as Carex and Five:Am., said the performance in these two regions were expected to improve in the second half with new product launches and distribution expansion.

Shares of the company were down 4.8 per cent at 312 pence as of 0830 GMT, making them the third biggest loser on the FTSE 250 mid-cap index. PZ Cussons’s business in Africa, which accounts for 43 per cent of its total sales, has been hit by weak market condition in Nigeria stemming from the devaluation of naira.

The maker of Original Source shower gel counts Nigeria as its biggest market, where it sells soaps to milk powder to electric goods. Nigeria, Africa’s largest economy, is suffering its worst financial crisis in decades as a slump in oil revenues hammers public finances and the naira.

In the UK, consumers are shopping cautiously, reflecting general cost inflation outstripping wage growth, and broader economic uncertainty, the company said.

However, the company said planned brand initiatives in the second half would help it deliver a full year out turn broadly in line with the prior year.

Advertisements