(qlmbusinessnews.com via telegraph.co.uk – – Thu, 15 Mar 2018) London, Uk – –
Consumer goods giant PZ Cussons has warned its profits will be lower than expected this year after running into trouble in its key markets of the UK and Nigeria.
Shares in the FTSE 250 company – which makes Imperial Leather and St Tropez – fell by a quarter in early trade after it said that profit before tax for the year would be in the range of £80m-£85m. Analysts surveyed by Bloomberg had anticipated a sum closer to £93m.
PZ Cussons, which had warned at its interim results in January that it would need a strong performance in the second half of its financial year to make up ground, blamed poor sales in its UK washing and bathing division “reflecting consumer caution across all retail channels caused by economic uncertainty and inflation out-stripping wage growth”.
New product launches had been “well received” but failed to offset the slowdown, it said.
In Nigeria, PZ Cussons has battled cost inflation for a number of years. “The Nigerian consumer's discretionary income remains under pressure with subdued buying levels. As a result the usual peak season uplift has not occurred to the expected level,” the company said.
PZ Cussons announced a review of its structure as it looks to cut costs, which could include reducing packaging. It will also review the future of its milk division in Nigeria and overhaul its pipeline of new products to focus on “fewer, bigger projects requiring lower levels of complexity”.
The company added: “We believe that the initiatives outlined above will strengthen the group's brand portfolio to better withstand the subdued levels of consumer confidence and higher levels of competitive intensity which are being faced in most of the markets in which it operates.”