StockMarketWire.com - PZ Cussons, an international consumer products group, has warned that its profit for the full year will fall short of expectations.

In January, the group said performance in the first half of the year had been constrained by trading conditions in the UK and Nigeria, and that delivery of the full year result would be dependent on trading conditions in those markets for the balance of year.

The board anticipates that profit before tax will be in the range of £80 million - £85 million.

Results in the group's other markets remain robust with performance in Australia, Indonesia and in the group's beauty division ahead of the prior year.

The UK washing and bathing division has continued to experience lower levels of purchases reflecting consumer caution across all retail channels caused by economic uncertainty and inflation out-stripping wage growth. Whilst new product launches have been well received, they have not had the desired uplift in sales to compensate for the wider volume and margin shortfall.

Following the significant cost inflation of recent years, the Nigerian consumer's discretionary income remains under pressure with subdued buying levels. As a result the usual peak season uplift has not occurred to the expected level. Consequently inventory levels in the trade remain high leading to intense competition, most noticeably in the milk category, which in return is resulting in lower volumes, prices and margins.

The group is now conducting a reassessment of the structure of its operating model to further reduce the overhead base; a review of product costs with a focus on areas such as packaging reduction; a review of the group's milk business in Nigeria with an objective of returning it to profitability; and a re-prioritisation of the group's new product pipeline to focus on fewer, bigger projects requiring lower levels of complexity. At 8:34am: [LON:PZC] PZ Cussons PLC share price was -45.9p at 230.9p



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