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PZ Investor Relations Portal
(Proshare)
“We
cannot rely upon short term economic conditions improving markedly in our key
markets and are therefore taking action to reposition the group to return to
profitable growth”
Nigeria
is a key market for PZ Cussons.
PZ
Cussons Plc (LON:PZC) will sell off non-core brands and simplify its Nigerian business as part
of a new a new strategy launched after annual profits fell sharply and
tough economic conditions are expected to persist in Africa.
Having warned of a sharp deterioration
in its key market of Nigeria at the time of half-year results in January, the
FTSE 250 maker of Imperial Leather soap and St Tropez fake tan confirmed
on Tuesday that its Africa business made an adjusted operating loss of £1mln as
revenue dropped and costs increased due to port access issues in Lagos.
For the group as a whole, revenue of £689.4mln for the year to 31 May
was down 7% on the previous year and reported profit before tax fell 38% to
£37.0mln.
Adjusted pre-tax profit fell 13% to
£69.8mln, in line with guidance given at the profit warning, which excluded
non-cash impairments of intangible assets for the five:am organic food brand in
Australia and Nutricima milk and yoghurt drinks in Nigeria.
Chair Caroline Silver felt it was a
“mixed” set of results, with solid performances in Europe and the Americas,
with strong growth in the beauty business unit and Asia Pacific, compared with
disappointing results in Africa reflecting the negative impact of the tough
macroeconomic conditions in Nigeria.
“We cannot rely upon short term economic
conditions improving markedly in our key markets and are therefore taking
action to reposition the group to return to profitable growth," she said,
announcing a new "focus, scale and accelerate" strategy.
"Our resources and investment will
be prioritised behind key categories and brands in only those geographies
offering the clearest opportunities in order to return the group to
sustainable, profitable growth."
Investment will be focused on core
personal care and beauty brands in geographies that can scale growth, with
simplification of Nigerian activities ready for the market recovery, plus
disposal of non-core brands and activities.
The cost base will be “tightly managed”
and results “will not be immediate, but we expect 2019/20 to be an important
transitional year”.
Broker Shore Capital said the
“transitional year” will result in a downgrading of its previous PBT forecasts
of £78.0mln by circa 10%.
But analysts were pleased by a fall in
net debt of around £13mln to £152mln and said Africa performing better than
feared, but that Europe was weaker than expected.
A final dividend of 5.61p per share made
for a total of 8.28p in line with the prior year.
Cussons shares fell more than 4% in early trading yesterday but by mid-morning were flattish at 225.55p.
Related News
1.
PZ
Cussons Nigeria Plc Q3 2019 - Lower Sales, Sticky Cost, Poor Earnings
– Mar 28, 2019
2.
PZ Declares N807.14 mln PAT in Q3 2019 Result,(SP:N10.00k)
3.
PZ Declares N1.22bn PAT in Q2 2019 Results (SP:N11.00k)
4.
PZ declares N204.63m Loss in Q1 2019 Result,(SP:N12.55k)
5.
PZ declares N1.93 bn PAT in 2018 Audited
Results,(SP:N15.00k)
7.
PZ
Cussons Not Leaving Nigeria – Feb 04, 2019
8.
Between
Unilever And PZ Cussons: More Positive on Unilever - ARM – Jan 30,
2019
9.
PZ
Cussons Nigeria Q2 2019 Results Review: Earnings Driven By Muted FX Impact
– Jan 24, 2019
10. PZ
Cussons Nigeria Plc Q1''19 - New Quarter, Same Story for HPC Player
– Oct 02, 2018
11.
PZ
Cussons Nigeria Plc Announces Its Board Meeting and Closed Period –
Jul 18, 2018
12. PZ
Cussons Nigeria Plc Appoints Mr Georgios Sotiropoulos as Executive Director
– Mar 27, 2018
13. PZ
Cussons Nigeria Plc Appoints Mr Pedro Barreto as Chief Finance Officer
– Jan 29, 2018
14. PZ
Cussons Nigeria: FX-related losses weigh on 2018 Outlook – Jan 22,
2018
15.
PZ
Cussons Nigeria Plc: Earnings to Recover After a Bumpy Start to 2018
– Oct 05, 2017
16. PZ
Cussons Nigeria Plc Q1’18 - FY’18 Begins With a Loss as FX Overhang Persists
– Oct 05, 2017
17.
PZ
Cussons Q1 2018 Results Showed a Loss after Tax on Input and Operating Cost
Pressure – Oct 04, 2017
18. PZ
Cussons Nig. Plc. - Loss in Q1-18; But Profit to Return in Subsequent Quarters -
Oct 03, 2017
19. PZ
Cussons Nigeria - Pre & Post-tax Losses of N181m and N61m Respectively
Driven by FX Loss of –N1.8 – Oct 03, 2017
20. PZ
Cussons Nigeria - Decent Results despite Substantial Fx Loss – Sept
27, 2017
21. PZ
Cussons Nigeria Plc FY 2017 - Impressive End to FY’17, EPS Up 73% YoY
- Sept 08, 2017
22. PZ
Cussons Nigeria Plc - Impressive Q4-17 Result Caps Solid 2017FY Performance
– Sept 07, 2017
23. PZ
Cussons Nigeria Reports Q4 2017 Results - Positive Reaction by the Market
Likely – Sept 07, 2017
24. PZ
Cussons Nigeria - On a Path to Recovery – Apr 04, 2017