PZ Cussons flags up challenging outlook
PZ CUSSONS, the self-tan to shower gels and handwash manufacturer warned today that trading conditions in the second half would remain challenging, with three major issues being encountered.
The listed Manchester-based company, whose brands include Carex, Imperial Leather, Original Source, and most recently self-tanning label St Tropez, said its outlook was clouded by tough trading in the UK, delays to elections in Nigeria – one of its key markets – and also the high cost of raw materials.
It was not all bad news though, with trading in Asia and a resilient performance by the premium brands, and an expected pick-up in Nigeria later in the year, ‘giving cause for encouragement’.
PZ Cussons said: “The trading outlook for the remainder of the current financial year remains challenging and is expected to be impacted by the UK trading environment, the temporary delay to Nigeria’s election process and continued high levels of raw material costs.
“These factors will be partially offset by the resilience of our more premium brands in the UK, by the growth in Asia and by the underlying improvement in demand in Nigeria, all of which give cause for encouragement for the next financial year.”
Finance director Brandon Leigh told TheBusinessDesk.com: “We are just flagging up these issues to the City – there will be a slight readjustment of numbers by the analysts. We still expect to see year on year on year growth though.”
He added: “Nigeria is a temporary issue – there are elections on three consecutive weekends and it means out factories don’t run as smoothly and the ports are not as operational.
“In the UK – we are seeing the same as many others – the consumer is cutting back, fuel prices are eating into household budgets and people are shopping less often and generally buying less.”
On the flip side he said as people were cutting back on holidays they were splashing out on self fan – which meant the acquisition of St Tropez – was paying off.
In a trading update covering January 26 to April 13 – where results were said to be ‘broadly in line with management expectations’ – the company said the UK continued to see high levels of promotional activity and a squeeze on consumer spending.
Interestingly shoppers are cutting back on the purchase of shower gels and handwash, but those buying from the higher end of the range were not.
“The more premium brands under the newly formed PZ Cussons Beauty division, namely The Sanctuary, St Tropez and Charles Worthington have continued to perform well.” Trading in Poland and Greece remain tough too, the firm added.
In Asia the picture is rosy with a strong all-round performance despite some tightening in the Australian consumer markets.
