‘The share price of toiletries manufacturer Asaleo Care has plunged 30 per cent after the group slashed its full-year guidance on the back of a 23 per cent slump in first-half profit,’ reported The Australian on 22 July 2016.
The owner of the personal care and hygiene brand SCA Tork said ‘fierce competition in the grocery sector was crimping margins and sales, leading to a 4.3 per cent slide in first-half revenue to AU$292.7 million and a 23.4 per cent dive in statutory net profit to AU$24.9m.’
The figures remain subject to a review by its auditors and will be confirmed on August 25 at its official H1 results announcement, stated The Australian.
Asaleo also warned on weakness for the full year, and the group now anticipates a ‘15 per cent drop in underlying profit, from its $76.1m result for the 2015 calendar year’, which compares unfavourably to prior guidance of a steady result.
‘The decline in its fortunes was tied largely to increased discounting from competitors in the consumer tissue and personal care sectors, with extra trade spend required to retain market share, as well as higher pulp prices due to a weaker Australian dollar,’ reported the article.
‘Asaleo chief executive Peter Diplaris added costs associated with a transition to an everyday pricing strategy had wiped $1m from its bottom line but was beginning to show signs of traction after its May introduction.’
“While it is disappointing to announce reduced results and outlook for the full year, we continue to believe that the strategy and initiatives which we have implemented and planned will put the company in a strong position going forward,” he said.
According to The Australian, the company has ‘enjoyed a good run on the stock exchange this year, surging 34 per cent to $2.14 as of the close of trade on Thursday.’ However, that positive run was ‘reversed in its entirety during morning deals, with Asaleo off 30.6 per cent at $1.485 at 10.35am (AEST).’
Asaleo is now trading below its 2014 listing price of $1.65.