Cussons Sees Lower Profit As Africa Challenges Mount
Cosmetics and soap maker PZ Cussons Plc warned of a big fall in full-year profit on Tuesday, hit by sluggish demand and port disruptions in its important Nigerian market.
The maker of Imperial Leather soap and Carex handwash said adjusted pretax profit for the year ending May was now expected to be around £70 million (€80.5 million), down from £80.1 million (€92.2 million) a year earlier.
Analysts on average were expecting a profit of £80.37 million, according to a Refinitiv Eikon consensus based on three brokerages.
The company's shares dropped 8.4% to 191.9 pence in early trade.
PZ Cussons also said adjusted first-half pretax profit fell 1.5% to £32.8 million (€37.7 million).
Challenges In Africa
The company has been struggling to turn around its African business, which contributes over a third of its revenue, with margins being squeezed amid dwindling demand.
In Nigeria, its most important market in Africa, the company said disposable incomes had remained weak ahead of a general election scheduled for February.
PZ Cussons had already warned in December of a lower first-half profit contribution from Nigeria as it faced disruptions in getting goods into the West African nation.
It said on Tuesday profit from Africa plummeted 70.7% to £1.2 million in the half-year, and added it would take a £5.5 million hit in full-year adjusted profit due to ongoing port disruption.
Overall half year revenue fell 10.4% to £335.1 million pounds.