PZ Cussons slips up as sales drop and costs rise

PZ Cussons, maker of Imperial Leather and Carex soaps, today saw its shares slip more than 6% as it warned consumers are cutting spending and the cost of raw materials is rising.

"In the UK, trading conditions remain challenging with high levels of promotional activity and a continuing squeeze on consumer spending," the firm said. "This is particularly noticeable in areas such as shower gels and handwash."

PZ Cussons said premium beauty brands such as The Sanctuary, St Tropez and Charles Worthington have "continued to perform well" and should help to offset some of the weaker sales from mainstream brands.

PZ Cussons added that results should still meet City expectations.

Sales across Asia, responsible for around 20% of turnover, have been strong. But PZ Cussons admitted to some problems in Europe and Africa, which each generate close to 40% of revenues.

There is a "difficult consumer environment" Greece and Poland while delayed elections in Nigeria are likely to cause some disruption. Consumer spending in Australia has also slowed.

The shares were down 21.5p at 319.8p.