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PZ Cussons warned on Tuesday its profits will drop almost 13 per cent in its current financial year, with consumers “under pressure” across its markets, especially Africa.
The FTSE 250 maker of Imperial Leather soaps was the biggest faller on London’s main stock market in early trading on Tuesday, with its share price dropping more than 11 per cent after it said it expects adjusted pre-tax profits for the year to the end of May 2019 to be £70m. It had generated profit of £80.1m in the previous fiscal year.
“We expect the consumer to remain under pressure in all of the markets in which we operate,” the group said.
PZ Cussons, founded 135 years ago in Sierra Leone, faced strong headwinds in Africa during the first half of its financial year, with revenue dropping 23 per cent year on year.On a constant currency basis that helps smooth foreign exchange volatility, sales were down 13.3 per cent.
It pointed in particular to Nigeria, where “consumer disposable income has remained weak ahead of the general election which is scheduled for February 2019.”
“There are ongoing cost challenges due to significant disruption being faced in clearing goods at the port and a further 10 per cent weakening of the naira against the US dollar in the period,” it added.
In Europe, the group’s biggest market, sales increased 1.2 per cent, or 1.4 per cent in constant currency. New product launches drove sales growth in the washing and bathing unit, with the beauty division also boosted by new products and an expansion in distribution channels.
