On an otherwise pretty buoyant day for the markets PZ Cussons (PZC) disappointed, surrendering a good chunk of its recent gains to trade down 6.1% at 202p.
While today's trading update and full year results to 31 May revealed the company benefiting from strong demand for hygiene products – a trend seen at other consumer goods firms like its larger peers Unilever (ULVR) and Reckitt Benckiser (RB.) – the outlook statement was notably pretty gloomy and total dividends for the year were down 30% to 5.8p.
Sales for the three months through August rose to £158.1 million, which represented growth of 23% on a constant currency basis.
Growth was strongest in Europe and the Americas, rising 49%, outpacing growth in Asia Pacific and Africa of 6% and 4%, respectively.
CAREX IN DEMAND
PZ Cussons said its Carex hand wash and sanitizer brand had performed strongly.
'The first-quarter results have given us a good start to the year with growth in all three regions and an improvement in profitability,' chief executive Jonathan Myers said.
Myers said the operating landscape remained highly volatile with many economies moving into recession and a competitive market putting pressure on pricing.
'While it remains very difficult to forecast and give guidance we expect some adverse headwinds for the rest of the year following this good start,' he said.
Taking his cue from this downbeat guidance, Shore Capital analyst Darren Shirley kept his May 2021 forecast unchanged despite the strong first quarter performance.
He commented: ‘We believe there is a lot to like about the PZ Cussons business, though challenging areas remain in the business (notably Nigeria) and we also note an ongoing strategy review.’