Investors take fright at soap firm’s warning

Market report Scott Reid

Imperial Leather-maker PZ Cussons suffered a double-digit shares slide on the back of a profits alert amid faltering UK consumer confidence.

The firm cautioned that its full-year adjusted profit was likely to fall “short of expectations”, with the board pencilling in a range between £80 million to £85m.

Households have faced a sustained squeeze on their spending power from a jump in the cost of living and muted wage growth.

PZ Cussons, which also owns St Tropez sun tan lotion and Original Source shower gel, is now embarking on a number of initiatives to get back on track. Shares slipped 16.2 per cent to 231.8p.

Numis Securities analyst Damian Mcneela noted: “In the UK demand for washing and bathing continues to be subdued and new product launches haven’t generated the expected volume uplift… Given the uncertainty in key markets, we retain our Hold rating, but reduce our target price from 325p to 255p.”

Estate agent Savills cautioned over a slowdown in the housing market, but cheered the resilience of its UK arm to post rising annual profits. The group reported a 3.5 per cent rise in underlying pre-tax profits to £140.5m for 2017, with revenues up 11 per cent to £1.6 billion. Shares nudged up 3.5p to 979.5p.

Britain’s benchmark FTSE 100 share index closed up 7.07 points at 7,139.76 as the swing in US markets underpinned UK sentiment. The cinema giant reported rising annual sales and profits yesterday following a year in which it splashed out £2.7 billion to acquire US chain Regal. The Imperial Leather owner warned over profits as consumer confidence dives in the UK and the firm faces tough trading in Nigeria.