PZ Cussons plc Reports Sales Drop In Nigeria

PZ Cussons plc (LON: PZC) faces challenging trading conditions in most of its markets.

Mark Stones

Mark Stones (TMFMumbojumbones) joined The Motley Fool in 2014 and initially worked as a writer for Fool.co.uk, before joining the Fool’s analyst programme. Mark earned a BA in English from Loughborough University. Although he spends more time reading annual reports than Russian literature these days, he still appreciates a novelist’s antipathy toward the accepted view, which is a useful attitude when trying to sniff out hidden gems on the stock market. His approach to investing has been largely influenced by the principles of Warren Buffett and Peter Lynch. He also takes a special interest in the work of healthcare companies. Outside of investing, Mark plays guitar, enjoys good writing and has a guilty passion for combat sports.

Published 23 September, 2014 10:04 am BST

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The shares of PZ Cussons (LSE: PZC) fell 2% in early trading after the consumer goods company said ongoing unrest in the north of Nigeria resulted in a fall in sales in that region. Nigeria, Africa’s most populous country, is PZ Cussons’ single biggest market.

The Manchester based firm added that trading conditions in most markets remain “challenging”. In the UK consumers remain vigilant over spending, albeit the relaunch of the Imperial Leather range of soaps helped drive strong performance in the washing and bathing division.

The beauty division performed well across its key markets of the UK, US and Australia, with sales of self-tan range St Tropez boosted by the appointment of Kate Moss as brand ambassador.

In Indonesia, where the Cussons Baby brand is is the market leader, good progress has been made in expanding the babycare portfolio, as well as diversifying the group’s offer with products such as Original Source shampoo.

Pz cussons said it “remains focused on a dynamic and fast brand renovation and innovation programme, an ongoing cost reduction programme and successful delivery of new areas of growth such as Rafferty’s Garden, Five:AM and the PZ Wilmar joint venture”.

Prior to today, City experts were expecting PZ Cussons’ 2015 earnings to drop from 21p per share to 18p per share, supporting a near-term P/E of 21. Of course, the decision to ‘buy’ — based on today’s update, the current share price, and the wider prospects for the consumer goods sector — is something only you can decide.