Imperial Leather and Carex maker PZ Cussons is bearing the brunt of its emerging markets strategy: full-year profits would have been more than 15% higher had it not been for the volatile gusts of currency volatility. In an investor update, PZ Cussons admitted trading conditions “in most markets remain challenging”. In total, it’s thought around £12m has been lost off the FTSE 250 player’s full-year numbers.
Trading conditions in Nigeria – PZ Cussons makes around 30% of its total sales from the country – are a particular worry. “Unrest,” says PZ Cussons, “in the north of the country has continued with increased levels of disruption over recent months.”
Panmure Gordon analyst Graham Jones said PZ needs to deliver double digit underlying growth just to stand still: “Given the increased disruption in north Nigeria, we believe it is prudent to reduce our 2015 profit before tax forecast by 4% from £120m to £115m, and our earnings per share forecast by 3% from 18.45p to 17.86p.”
Back in the UK, PZ said its washing and bathing division – including Carex and Original Source – performed well; its entire Imperial Leather range is about to be relaunched and the company remains bolstered by Kate Moss, giving sales of St Tropez a boost. Full PZ numbers will be announced at the end of July. The share price of the company reflects current concerns: before going to press PZ shares were worth 355p. This compares with almost 430p back in September, a 17.5% dip.
