PZ CUSSONS PLC Trading Update (7743H)
March 15 2018 - 3:01AM
UK Regulatory
TIDMPZC
RNS Number : 7743H
PZ CUSSONS PLC
15 March 2018
15 March 2018
PZ Cussons Plc
(the "Group")
TRADING UPDATE
PZ Cussons Plc, a leading international consumer products group,
today issues the following trading update in respect of the year
ended 31 May 2018.
Overview
At the time of our interim results announcement in January, we
reported that performance in the first half of the year had been
constrained by trading conditions in the UK and Nigeria, and that
delivery of the full year result would be dependent on trading
conditions in those markets for the balance of year.
It is now apparent that profit for the full year will fall short
of expectations and the board anticipates that profit before tax
will be in the range of GBP80 million - GBP85 million.
Results in the Group's other markets remain robust with
performance in Australia, Indonesia and in the Group's beauty
division ahead of the prior year.
A number of initiatives are underway to ensure the Group returns
to profitable growth for the following year and an initial outline
of these is set out below.
UK
The UK washing and bathing division has continued to experience
lower levels of purchases reflecting consumer caution across all
retail channels caused by economic uncertainty and inflation
out-stripping wage growth. Whilst new product launches have been
well received, they have not had the desired uplift in sales to
compensate for the wider volume and margin shortfall.
Nigeria
Following the significant cost inflation of recent years, the
Nigerian consumer's discretionary income remains under pressure
with subdued buying levels. As a result the usual peak season
uplift has not occurred to the expected level. Consequently
inventory levels in the trade remain high leading to intense
competition, most noticeably in the milk category, which in return
is resulting in lower volumes, prices and margins.
Initiatives
In light of these pressures the Group has initiated the
following actions:
-- A reassessment of the structure of the Group's operating
model to further reduce the overhead base
-- A review of product costs with a focus on areas such as packaging reduction
-- A review of the Group's milk business in Nigeria with an
objective of returning it to profitability
-- A re-prioritisation of the Group's new product pipeline to
focus on fewer, bigger projects requiring lower levels of
complexity
Outlook
We believe that the initiatives outlined above will strengthen
the Group's brand portfolio to better withstand the subdued levels
of consumer confidence and higher levels of competitive intensity
which are being faced in most of the markets in which it
operates.
The Group's balance sheet remains strong with net debt around
1.5 x EBITDA.
A further trading update will be made on 14 June 2018 after the
close of the financial year.
- ENDS -
For further information contact:
PZ Cussons Plc Tel: 0161 435 1236
Brandon Leigh - Chief
Financial Officer
Instinctif Tel: 020 7457 2020
Tim Linacre / Guy Scarborough
This information is provided by RNS
The company news service from the London Stock Exchange
END
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