PZ Cussons posts 23% falls after subdued market conditions in Nigeria and the UK

Consumer goods group PZ Cussons has posted 23% falls in annual profit after subdued market conditions in Nigeria and the UK

Consumer goods group PZ Cussons posted a 23% fall in annual profit after subdued market conditions in Nigeria and the UK squeezed its margins.

Pre-tax profit for the year through March declined to £66.6m, as revenue fell 5.8% to £762.6m.

Adjusted pre-tax profit fell 22% to £80.1m, in line with the company’s most recent guidance for a figure at the bottom end of a £80m-to-£85m range.

PZ Cussons held its annual dividend steady at 8.28p per share.

Adjusted operating profit in the African division fell 78%, while rising 17% in the Asian division and coming in broadly flat in the European division.

In Nigeria, the company said a sustained lack of liquidity at both consumer and trade level had resulted in a significant contraction in the size of the market, resulting in lower volumes, prices and margins.

The company said that in the absence of an indication as to when liquidity in Nigeria may improve ahead of the February 2019 general elections, it is taking steps to optimise further its overall product portfolio and to reduce its cost base.

In the UK, growth in the beauty division partially offset more challenging trading conditions faced in the UK washing and bathing division.

Chairman Caroline Silver said that it remains focused on innovation but with a sharpened lens on fewer, bigger, higher margin product launches which will differentiate further its brands, as well as a reduction in overheads through optimising its operating model.

The group’s balance sheet remains strong and it will continue to evaluate growth opportunities utilising the group’s brand portfolio and distribution capability.

Whilst it expects another challenging year ahead, the business is well placed to return to growth and consequently the board has maintained the full year dividend.

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