PZ Cussons shares tumble amid profit warning

Manchester-based consumer products group PZ Cussons, the maker of soaps including Imperial Leather and Carex has issued a profit warning which has sent its shares down in value by 25%.

The company said profits for the full year to March 31 “will fall short of expectations – ending at between £80m and £85m, well below the hoped-for £93m – brought down by its performance in the UK and Nigeria.

Other markets like Australia and Indonesia are proving “robust”, the company said.

A statement said the company was carrying put a reassessment of the “structure of the group’s operating model to further reduce the overhead base”, and reviewing product costs with a focus on areas such as packaging reduction.
The group’s milk business in Nigeria would also be reviewed with the aim of returning it to profitability.

And there would be a “re-prioritisation of the Group’s new product pipeline to focus on fewer, bigger projects requiring lower levels of complexity”.

Commenting on the news, Russ Mould, investment director at AJ Bell, said: “The business is facing the double whammy of a weakening outlook in the UK and ongoing cost inflation in its Nigerian business.

“A company like PZ Cussons lives or dies by the strength of its brands. To get the market back on side management will need to demonstrate the recent troubles are temporary rather than a reflection of the fading appeal of its products.”

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