Business
PZ Blames Crisis For Drop In Sales
Soap and shampoo maker PZ Cussons has issued a second profit warning in less than four months, blaming a hit to sales from social unrest in Nigeria, its biggest single market.
Shares in the maker of Imperial Leather soaps and Carex anti-bacterial hand washes were down 10.2 percent at 1001 GMT on Tuesday after it said profits in Nigeria over the last two months had been affected by a continuation of economic and social tensions.
Nigeria, Africa’s most populous country, accounts for 30-40 percent of PZ Cussons’ total revenue.
“Given the importance of Nigeria to the group, the impact of the continuing tensions in the country will be significant, resulting in the group’s overall (year to May 31, 2012) performance being some way below expectations,” the firm said.
PZ Cussons highlighted the continuation of social instability in northern Nigeria which has directly impacted sales, and the removal of a fuel duty subsidy in January that has hit consumers’ disposable income and led to higher transport costs and port disruption, affecting both sales and costs.
Despite its current problems in Nigeria the firm expects the removal of the fuel duty subsidy to be beneficial for the medium term macroeconomic health of the country.
PZ Cussons, which also owns beauty brands Charles Worthington, Sanctuary and St Tropez, first warned of problems in Nigeria in January.
Shares in the firm were down 34 pence at 300 pence at 1001 GMT, valuing the business at about 1.26 billion pounds ($2 billion).
“This is undoubtedly a disappointing statement, and while we feel this may ultimately prove to be the bottom of the news flow cycle, we acknowledge that the outlook in Nigeria remains uncertain,” said Panmure Gordon analyst Graham Jones, who cut his 2011-12 pre-tax profit forecast by 13 percent to 89.1 million pounds.
PZ Cussons said trading in the January 25 to March 26 period in all its other markets in Europe and Asia had been in line with management expectations and was expected to be so for the balance of the year.
“Looking ahead to the new financial year commencing June 1, the group is expected to return to profitable growth in all markets including Nigeria,” it said.
It said this growth would be supported by the benefits of a major programme to cut costs in its supply chain, also announced on Tuesday.
That will see the firm close manufacturing plants in Australia and Ghana and restructure facilities in Poland.
The programme will have a cash cost of 19 million pounds, mainly for redundancies, with a further non-cash charge of 20 million pounds for asset write downs. Payback is expected within three years.
($1=0.6275 British pounds)
Kenya made it a clean sweep at the Berlin Marathon with Sabastian Sawe winning the men’s race and Rosemary Wanjiru triumphing in the women’s.
Sawe finished in two hours, two minutes and 16 seconds to make it three wins in his first three marathons.
The 30-year-old, who was victorious at this year’s London Marathon, set a sizzling pace as he left the field behind and ran much of the race surrounded only by his pacesetters.
Japan’s Akasaki Akira came second after a powerful latter half of the race, finishing almost four minutes behind Sawe, while Ethiopia’s Chimdessa Debele followed in third.
“I did my best and I am happy for this performance,” said Sawe.
“I am so happy for this year. I felt well but you cannot change the weather. Next year will be better.”
Sawe had Kelvin Kiptum’s 2023 world record of 2:00:35 in his sights when he reached halfway in 1:00:12, but faded towards the end.
In the women’s race, Wanjiru sped away from the lead pack after 25 kilometers before finishing in 2:21:05.
Ethiopia’s Dera Dida followed three seconds behind Wanjiru, with Azmera Gebru, also of Ethiopia, coming third in 2:21:29.
Wanjiru’s time was 12 minutes slower than compatriot Ruth Chepng’etich’s world record of 2:09:56, which she set in Chicago in 2024.