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PZ Cussons shares fall as it says full-year profit will be at the lower end of expectations

In a trading update for the year ended 31 May 2018, the FTSE 250-listed soap and personal care products giant said it expects profit before tax for the full year to be in the range of £80mln-£85mln
PZ Cussons soap
The company said results in the Group's other markets remain robust

PZ Cussons PLC (LON:PZC) shares fell on Thursday as the company said its full-year pre-tax profit will be at the lower end of its expectations, affected by trading conditions in the UK and Nigeria.

In a trading update for the year ended 31 May 2018, the FTSE 250-listed soap and personal care products giant said it expects profit before tax for the full year to be in the range of £80mln-£85mln, in line with revised expectations.

READ: PZ Cussons warns again as UK slowdown gets worse

The company said: “Revenue and profitability in the UK washing and bathing division have been affected by the tightening UK retail landscape, with consumers shopping more cautiously as a result of economic uncertainty and inflation out-stripping wage growth.”

PZ Cussons said in Nigeria the usual peak season has not materialised and while higher oil prices have helped stabilise the currency, "liquidity has not flowed down into the economy".

The company said results in its other markets remain robust with performance in Australia, Indonesia and the group's beauty division ahead of the prior year.

“It is expected that macro conditions will remain challenging with general elections in Nigeria and Indonesia falling in the second half of the new financial year. At the same time, commodity costs and exchange rates are expected to remain volatile,” said PZ Cussons.

In early morning trading, PZ Cussons shares fell 4.2% to 223.0p. 

Numis maintained its ‘hold’ rating for the company but lowered price target to 255p from 230p.

In a note to clients, analysts at Numis said: “Given that the challenges flagged in core markets are not set to improve in the near term we maintain our ‘hold’ rating but lower our price target.”

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