PZ Cussons sinks on UK and Nigerian woes
The group cited tough trading in the UK.
Shares in PZ Cussons tumbled after the Imperial Leather owner said that annual profit is expected to be “towards the bottom end” of estimates.
The group cited tough trading in the UK, where revenue and profitability in its UK washing and bathing division have been affected by plunging consumer confidence.
It pointed to consumers shopping “more cautiously” as a result of economic uncertainty and inflation out-stripping wage growth.
“Whilst new product launches have been well received, these have not been sufficient to compensate for the wider volume and margin shortfall,” PZ Cussons warned.
Shares were down over 6% in morning trade on the FTSE 250.
Nigeria is also causing the company cause for concern.
PZ Cussons said that Nigerian wages have continued to lag behind “significant cost inflation” in recent years, impacting consumer spending in the country.
As a result of its UK and Nigerian and woes, PZ expects pre-tax profit to come in at the low end of its £80 million to £85 million range.
Last year, pre-tax profit was £88 million.
PZ Cussons, which also owns St Tropez sun tan lotion and Original Source shower gel, is now embarking on a number of initiatives to get back on track.
It has kicked off a £10 million plan to reduce its overhead base and increase the speed at which new products are brought to market.
PZ Cussons’s performance in the Australian, US and Indonesian markets was strong, however, it added.