PZ Cussons hit by 'challenging' market conditions, CEO to retire
Imperial Leather maker PZ Cussons warned on Thursday that 2019 revenue and profit would be "modestly" below the previous year on a like-for-like basis amid "challenging" market conditions, as it announced the retirement of its chief executive.
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In an update for the half to 30 November, the company said revenue and operating profit declined from the same period ago. While Imperial Leather and Original Source continued to see market share growth in Europe and the Americas, the UK high street was hit by ongoing consumer uncertainty, which dented overall profit and revenue.
In the beauty segment, results remained "solid", it said, with continued growth in retail sales of St Tropez in the US.
In Asia Pacific, there was continued good revenue and profit growth in Indonesia, driven by Cussons Baby, but this was offset by lower revenue and higher promotional costs in Australia. In addition, the region was also impacted by higher manufacturing costs related to raw materials and the strengthening of the Indonesian rupiah.
In African, revenue declined as weakness in Cussons’ mass market home and personal care brands offset strong growth in electricals.
"Profitability was impacted by continued consumer pricing pressure, continuation of charges associated with the Port in Lagos and the closure of the borders limiting exports," it said.
"A stronger second half is expected subject to no further worsening of the economic and trading environments across our key geographies. Full year revenue and adjusted profit before tax is expected to be modestly below the prior year on a like-for-like basis."
The update came alongside news that the company’s chief executive officer, Alex Kanellis, is planning to retire at the end of January 2020 after 13 years in the job.
At 0845 GMT, the shares were down 0.6% at 192.60p.
Shore Capital analysts Darren Shirley and Clive Black said: "Taking management’s revised guidance, we are lowering our FY2020 CPTP forecast by 6.8% to £63.5m, which leads to earnings per share of 11.9p so an 8% decline year-on-year."