The slowdown in the UK was always going to happen at some point. I'm a loyal user of Carex and Original Source products but the only price I pay for them is £1. I've seen the new product launches and given many of them a try. Customers reach the point though where you have half a dozen different OS shower gels in the bathroom and you decide that's it - no more until these are used up. My view is PZ is now feeling the hangover of constant price promotions and new product launches in the UK. Regular customers probably have enough Carex and OS to last them months.
I don't know how they can turn round the UK business. Reading between the lines of the trading statement it looks as if the company is going to take a profit hit this year by reducing new product launches and allowing customers' bathrooms to clear their overstocked position. It probably means the shares are going to remain around the current level for some time.
"In these testing times, it only needed 43 days for LSE:PZC:PZ CussonsÂ to realise that hopes expressed in January for an improved second half of the financial year were going to be wide of the mark.Conditions in the UK and its biggest market of ..."
Well with a heavy heart and after 2 years+ holding this I've decided to sell.
Perhaps not the best price, but with 30Jan reporting looming I don't want to see this hammered like everything else that reports good news or bad these days.
After 2 years I have just over 8% + 2 years worth of divis, so about 6+% a year.
Pretty poor, but not a disaster.
The company seems to struggle, and had it not been for £ slide of late, the results would be worse.
I think £ is likely to go the other way from here and the crutch of it's weakness won't be there anymore.
Long term it's probably fine, and I'd buy back at sub 300, but not at the moment -- it's all looking like boiling point to me.
Games - watch it rise like a meteor from here no doubt !!
In the interim results, it was Africa that performed the best, despite the troubles with the currency police (SSS) in Nigeria :-
In constant currency terms :-
Africa Revenue was £135.7M --- up £11.6M --- or 9.3% growth
Asia was down at £107.9M --- down £3.7M --- or down 3.3%
Europe was down at £134.6M --- down £26.5M ---- or down 16.4%
So Europe looks sick -- a bit like the EU I suppose, although to be fair a good % of that decline was attributable to the UK and the poor sales of St Tropez in the summer.
Games -- Maybe there is still a lot of growth in Africa with a population of £173M in Nigeria alone. Is it the heart of darkness or is there light at the end of the tunnel?
"The Questor Column:
Time to sell PZ Cussons after the rally?:
PZ Cussons, the maker of Imperial Leather soap and St Tropez fake tan has appointed investment banker Caroline Silver as its new Non-Executive Chairman. PZ Cussons has more than a hundred years of trading experience in Africa, selling shampoo, soap, milk powder, detergents and electrical goods. Nigeria is the companys largest market and the commodity-dependent economy has been hit hard by the slump in the oil price. The African business generated 35% of the groups profits in 2014 before the oil price crash, and this had fallen to 23% in the latest interim results. The naira exchange rate has remained relatively stable during the two months to the financial year end of May. The risk is that even though the exchange hasnt deteriorated further, and the oil price has risen 60% from January lows to more than $50 per barrel, consumers are still hamstrung by squeezed spending power. On a longer-term outlook the worry is that the company has offset the slowdown in Africa with expansion in Asia and Australia, buying haircare brand Fudge, organic yoghurt maker five:am, and babyfood maker Raffertys Garden. The company still has a solid European division, which contributes about 60% of group profits and delivered a steady performance in the first half of the year, boosted by Carex and St Tropez sales. It looks like some sensible dealmaking to trim underperforming brands and get the company back on track is exactly what the company needs right now.
The last time we looked at the shares we got it wrong when we recommended selling at 249p in January after the tough first half results.
We think the rally looks a little over-optimistic and ahead of the full year trading update on Thursday and the annual results on July 26, we are sticking with our long-term advice on this one. Sell. PZ Cussons at 336.7p +5.7p. Questor says Sell."
Doesn't today's RNS point to something smelly with regards to last week's director deals in advance of this announcement. Anyone in authority looking to this? Same thing happened with Barr's director sales last week.
"Shares in PZ Cussons were in the red on Thursday as Numis reiterated its 'reduce' rating after the company warned of difficult conditions in its main market of Nigeria.
In an update for 27 January to 13 April, Cussons said overall trading has been in line with expectations and the company is on track for the full year but cautioned on trading in Nigeria.
The Imperial Leather soap maker said the performance in Europe and Asia offset more difficult trading conditions in Africa. More specifically, in Nigeria, whilst the official naira exchange rate continues to be stable, a lack of availability at that rate is resulting in the majority of dollars being purchased at a premium of 50-70%.
The resultant cost impact is being managed through changes to relative pricing in an environment where trading conditions remain challenging and consumer disposable income is under pressure, the company said.
"Trading in Nigeria has been slightly worse than was expected in January and the repercussions of a lack of liquidity here will run on too into next full year," according to Numis.
"We made very cautious estimates at the first half stage but have lowered pre-tax profit projections slightly more."
Numis cut this full year's pre-tax profit estimate from £101m to £100m and have lowered the following full year results by £1m. The broker left the target unchanged at 262p."
One of the only stocks in his 12-strong Isa portfolio that is currently showing a loss is PZ Cussons. Could it be that you have an emotional attachment to this share? a reader gamely asked.
Absolutely, Lord Lee replied. I used to be on the board for ten years, so there is a special relationship there. PZ Cussons, maker of Imperial Leather, has been a very successful share for me over the years [he has a significant stake held outside his Isa portfolio] and Im still in profit overall. They have a strong portfolio of brands in emerging markets, particularly in Nigeria. By 2050, Nigerias predicted to be the fifth most populous country in the world, and PZ is probably the biggest manufacturer there, with a huge distribution network which they can push other products down in future. But in the short term, the oil price has had an impact and this weeks interim results may reflect those difficulties.""""""
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