Personal goods manufacturer PZ Cussons (PZC) has issues a trading update for the six months to 30 November, stating that its performance is in line with expectations and first half profits are likely to be flat.
It said that in the UK, performance in the washing and bathing division has been “robust” with new product launches under Imperial Leather, Carex and Original Source helping to negate the challenging trading environment.
A poor summer affected sales of St Tropez, but performance across the beauty division’s brand portfolio was “good” for the remainder of the period, including an extension to its Sanctuary range.
It reported tough conditions in Australia, good growth in Indonesia and performance in line with expectations in Poland, Greece, Thailand and the Middle East.
In its key African market of Nigeria it continues to be affected by the 40% devaluation of the naira, with liquidity remaining poor and the exchange rate continuing to weaken.
However, market shares in Nigeria across personal care, home care, electricals and food and nutrition have either been held or grown in the period, although volumes in all categories are lower as a result of changes to relative pricing. PZ Cussons said its overall portfolio is “working well” in a market where consumers are under significant inflationary pressure and down trading to lower price points and sizes.
In terms of outlook, the company said the strength of its brand portfolio and innovation pipeline should ensure that the market shares of our products remain strong in all markets despite tough trading conditions.
“Brand renovation and innovation will underpin the trading result in the second half in Europe and Asia, with various mitigating actions planned across the UK businesses to counter higher costs.”
Elsewhere this morning, TATE & Lyle (TATE) has announced a new chairman, with Gerry Murphy joining the board on 1 January 2017 and succeeding Sir Peter Gershon as chairman on 1 April 2017 following Sir Peter’s retirement.
Murphy is currently chairman of The Blackstone Group’s principal European entity. His early career was in the food and drinks sector, primarily with Grand Metropolitan (now Diageo) and Greencore Group, where he was CEO, before becoming CEO of Exel, Carlton Communications and most recently Kingfisher (2003 to 2008).
Sir Peter Gershon said: “Gerry’s extensive experience in the food industry and as chief executive, investor and independent director in leading international companies equips him well to guide Tate & Lyle in the years ahead.”
Murphy added: “I am honoured to succeed Sir Peter as chairman of Tate & Lyle and I am very excited about working with Javed Ahmed, the Board and the leadership team to help deliver the company’s growth agenda. Having started my career in the food industry, joining Tate & Lyle feels like coming home.”
On the markets this morning, the FTSE is 0.1% down at 6,942.7pts.
PZ Cussons is 0.8% down at 311.2p after its first half trading update this morning, while Tate & Lyle is 0.2% down to 680p.
Yesterday in the City
The FTSE edged 0.3% to 6,949.2pts yesterday, dragged down by a 6.6% drop in the shares of retailer Dixons Carphone, which warned of future uncertainty despite a rise in first half profits.
On a subdued day of newsflow in the grocery sector, the supermarkets were all on the up. Sainsbury’s (SBRY) was up 1.5% to 249.4p, Morrisons (MRW) up 0.7% to 227.9p and Tesco (TSCO) up 0.4% to 205.8p.
Tesco had been one of the FTSE’s biggest fallers on Tuesday after the Kantar and Nielsen market share figures revealed Tesco’s sales growth had reversed. Sainsbury’s and Morrisons had both made modest gains on Tuesday after the release of the figures.
Also on the rise were Ocado (OCDO), up 1.1% to 251.5p, Cranswick (CWK), up 1% to 2,268p, C&C Group (CCR), up 2.5% to €3.74, Premier Foods (PFD), up 2.2% to 45.8p and Greene King (GNK) up 1.8% to 705p.
Fallers included WH Smith (SMWH), down 1.6% to 1,447p, Greggs (GRG), down 1.7% to 914.5p, Britvic (BVIC), down 2.1% to 555p, Majestic Wine (WINE), down 1.8% to 294.5p and Glanbia (GLB), down 4.7% €15.25.
There was some profit taking at Greencore (GNC) as it fell 3.2% to 237.1p yesterday, having risen by 4.7% to 245p on Tuesday on the back of a broker note rerating the stock as ‘buy’.