"Extremely challenging" market conditions in Nigeria drove down first-half profits by a fifth at consumer goods group PZ Cussons (PZC), which means full-year profits will fall short of management's – and analysts' – expectations. Company bosses now expect adjusted pre-tax profits of £70m for the year ending 31 May 2019, prompting broker Investec to apply a 12.5 per cent cut to its previous forecast. Analysts there now expect pre-tax profits of £70m, giving EPS of 12.3p, down from £80.1m and 13.4p in FY2018.
Overall, revenues from Africa fell 23 per cent during the first half, with adjusted operating profit down 70.7 per cent. Disruption at Nigerian ports added to supply chain costs, while the Naira – the local currency – fell another 10 per cent against the US dollar. Management is optimistic that consumer confidence will improve following the February elections, and says maintaining market share is the priority in the meantime. Chief financial officer Brandon Leigh also hopes Nigeria's youthful population will support a longer-term recovery as it discovers its spending power.
| PZ CUSSONS (PZC) | ||||
| ORD PRICE: | 187p | MARKET VALUE: | £800m | |
| TOUCH: | 186.5-187p | 12-MONTH HIGH: | 331p | LOW: 183p |
| DIVIDEND YIELD: | 4.4% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 105p* | NET DEBT: | 37% | |
| Half-year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017** | 374 | 33.5 | 4.9 | 2.67 |
| 2018 | 335 | 26.7 | 4.6 | 2.67 |
| % change | -10 | -20 | -7 | - |
| Ex-div: | 14 Feb | |||
| Payment: | 06 Apr | |||
| *Includes intangible assets of £404m, or 94p a share **Restated to reflect IFRS 15 | ||||
