PZ CUSSONS: MORE HEAT FROM THE KITCHEN

PZ Cussons Nigeria PLC is feeling more heat from the kitchen in the current financial year.
According to half year figures released recently income from non-core business managed to stop drop in core revenue from translating into same pace drop.
To make matters worse, only direct cost headed the way of core business drop, overheads and finance cost did otherwise.
The half year figures show that total income decreased by 4.03% to N50865.2m from N53003.6m despite 4.22% drop in core revenue to N50656.9m from N52889.7m.
This was as income from other sources rose by 82.9% to N208.3m from N113.9m.
First, even the corresponding drop in cost of sale recorded at 2.81% was short of the revenue drop but then, half bread is always better than none. It closed at N37461.7m from N38542.4m.
Secondly, overheads increased by 5.07% to N10873.5m from N10349.3m  and net finance cost leapt to N390m from N129.9m in 2015 first half.
No wonder, PZ Cussons ended the half year with N4.21 gain on each N100 income compared to N7.53 by the same time in 2015 year.
SO:
* Its a good thing that increasing pressure on the bottom line has not landed PZ Cussons with liquidity problems yet.
* However, the 46.4% drop in profit for the half demands more rolled up sleeves.

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