Good morning,

This is the last report before the long weekend, so I hope everyone enjoys the break.

Paul is updating us on Gattaca, and I'm writing the rest of the comments.

By the way - Paul updated yesterday's report so that it now includes Norcros (LON:NXR), £D4T4 and Comptoir (LON:COM). This includes a really detailed analysis of some issues arising from a close reading of the footnotes at Comptoir, with Paul providing his own "adjusted adjusted figures"! You can read it at this link.



PZ Cussons (LON:PZC)

Share price: 327p (-0.7%)
No. shares: 428.7m
Market cap: £1,402m

Trading Update

These shares have recovered a little since I covered them at the interim report in January.

At the time, I noted that currency depreciation in Nigeria and ongoing exceptional costs were a frustrating drag on results. But I also suggested that it was a company which deserved the benefit of the doubt, after several decades of success.

Today's update tells us that performance to April 12th has been in line with expectations, including cash generation.

As reminder, PZ Cussons is a mid-sized house of brands which includes Carex, Imperial Leather, St. Tropez, Charles Worthington and many others.

Reading through the company's regional news, there are good signs in terms of product launches and range extensions, including a complete relaunch of Imperial Leather.

And the troublesome Nigerian market may be showing signs of improvement:

In Nigeria, there has been some improvement in liquidity in both the interbank and secondary markets although exchange rates in the secondary market continue to be volatile.

There's a shortage of foreign currency in Nigeria due to the gap between official interbank exchange rates and the rates used in the black and secondary markets, causing major disruptions to business. But PZC says all its business units there have traded "relatively well" during the most recent period.

Outlook sounds ok:

Further margin improvement initiatives are underway to mitigate ongoing raw material and exchange rate volatility.

The outlook for the financial year ending 31 May remains in line with expectations.

The Group's balance sheet remains strong and well placed to pursue new opportunities as they arise.

My opinion

Unfortunately the shares are still quite richly valued, leaving a modest dividend yield at the current price.

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