According to London (Alliance News), consumer products group PZ Cussons PLC said Thursday that its annual profit is expected to be “towards the bottom end” of its March estimate due to difficult trading conditions in Nigeria.
Shares in PZ Cussons were down 5.8% at 219.36p on Thursday morning, the second-worst performing in the FTSE 250 index.
Nigerian wages have continued to lag behind “significant cost inflation” in recent years, impacting most of PZ Cussons’ Nigerian portfolio, PZ Cussons said. The company, therefore, expects a pretax profit at the low end of its GBP80 million to GBP85 million guidance back in March.
In financial 2017, pretax profit was GBP88.0 million.
The company also struggled in the UK with product launches failing to make up for margin and volume shortfall. PZ Cussons’s performance in the Australian, US and Indonesian markets was strong, however, it said.
In response to challenging macroeconomic conditions, the company is embarking on a GBP10 million plan to reduce its overhead base and increase the speed at which new products are brought to market.
PZ Cussons is also looking to reduce both the complexity of its projects and its product packaging.
“The group’s balance sheet remains strong with closing net debt at circa 1.5 times earnings before earnings before interest, taxation, depreciation, and amortization,” the company concluded.