Shares in soap maker PZ Cussons fell down the plughole after a profit warning.
The FTSE 250 maker of Imperial Leather soap and Original Source shower gel has been hit by poor sales in the UK and Nigeria.
It blamed rising inflation, intense competition and economic uncertainty in the UK as a result of Brexit for the slump.
Full-year profit before tax is expected to be in the region of £80million-£85million, significantly lower than forecasts of around £100million.
The Manchester-based firm plans a review of the way it operates and to reduce the amount of packaging it uses.
Wash out: Imperial Leather soap maker PZ Cussons has been hit by poor sales in the UK and Nigeria
PZ said: ‘We believe that the initiatives outlined will strengthen the group’s brand portfolio to better withstand the subdued levels of competitive intensity which are being faced in most of the markets in which we operate.’
However, analysts at JP Morgan Cazenove said the measures might not go far enough as it slashed the firm’s target price from 310p to 260p.
Analyst Doriana Russo said: ‘While we had somewhat anticipated a tough year in the UK, we believe the consumer environment in Nigeria will be difficult to turn around in the short-term and may require more drastic decisions.’
Shares plunged 16.3 per cent, or 45p, to 231.8p.
The FTSE 100 was boosted by healthcare and financial stocks as it closed 0.10 per cent, or 7.07 points, higher at 7139.76.
STOCK WATCH – VERNALIS
The pharmaceutical company Vernalis has put itself up for sale following a strategic review of its business.
In an update, the Aim-listed company also said that it did not think it would be ‘financially viable’ to keep running its US business.
Vernalis hopes to conclude the sale and the closure of its US arm by the end of September this year.
Investors reacted badly to the news and shares sank 8.3 per cent, or 0.36p, to 3.9p by the close of trading yesterday.
Tesco spent most of the day at the top of the blue-chip index before being pipped at the post by Standard Life Aberdeen.
The supermarket giant has staged a ‘visible turnaround’ according to analysts at JP Morgan Cazenove.
The broker said Tesco’s £3.7billion deal to buy wholesalers Booker gives it good potential to grow, as it upgraded the firm to ‘overweight’
Tesco’s shares ticked up 1.8 per cent, or 3.7p, to 214p.
Hammerson propped up the bottom of the FTSE 100 following a downgrade by analysts.
The owner of Birmingham’s Bull Ring shopping centre is set to buy rival Intu properties in a £3.4billion deal.
However, after running the rule over the pair’s combined 25 shopping centres, Credit Suisse says Intu’s portfolio is overvalued by 13 per cent and of ‘limited attraction’ for Hammerson shareholders.
It also said both were under threat by falling shopper numbers due to the boom in online buying.
Credit Suisse downgraded Hammerson to ‘Neutral’ and Intu to ‘Underperform’, both from ‘Outperform’. And it cut their target prices from 605p to 460p and 270p to 205p respectively.
The gloomy assessment pushed Hammerson’s shares down 4.9 per cent, or 22.2p, to 434.4p and Intu’s by 2.6 per cent, or 5.6p, to 206.8p.
Elsewhere, OneSavings Bank shares slumped 6.5 per cent, or 26.2p, to 379.8p despite beating profit forecasts.
However, investors were spooked by a warning that its margins would come under pressure this year following the withdrawal of the Term Funding scheme, which gave cheap funding to banks.
On the junior market, shares in TV show producer Zinc Media tanked over concerns for the company’s Reef Television subsidiary.
Reef is expected to come in significantly below forecasts after three series were not recommissioned for the current year. Shares dived 20 per cent, or 0.15p, to 0.6p.
Aim-listed, out-of-hospital care provider Totally popped after announcing it had renewed a number of its contracts.
Vocare, its subsidiary, will continue to provide urgent care services in Sunderland and Leicestershire, and will provide dental triage services for the North of Tyne and Tees, in deal extensions worth £4.1million.
Despite the news, shares fell 4.7 per cent, or 1.5p, to 30.5p.