'Imperial Leather' maker PZ Cussons made no attempt to soft-soap the market as it confirmed profits are expected to be down a chunk on last year.
The group's performance since its profit warning at the end of March has been in line with expectations, which means that, as previously flagged, profits before exceptional items in the year to the end of May are expected to be about 15% lower than last year.
Market expectations are for profit before tax of £90.4m, down from £108.1m, a decline of 16.4%.
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Performance in the UK has been robust, while the beauty division has scrubbed up well, and the group is seeing positive momentum in Indonesia. Unfortunately, all this good news stuff has been more than offset by three previously highlighted factors: some £25m of increased costs from rising raw materials; a deteriorating Australian home-care market; the well-publicised social and economic tensions in PZ Cussons's home market of Nigeria.
While input costs have shown signs of short term easing, they remain volatile and close to their highest levels, the company revealed.
On the plus side, the major supply chain optimisation project, announced in March, is on track and the benefits will begin to be seen in the new financial year just started.
"Overall, despite both the uncertain economic environment in Europe and the economic and social tensions in Nigeria, the group remains confident that it will return to profitable growth in the new financial year," the statement concluded.
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