Shares in PZ Cussons tumble as Carex maker rocked by Nigerian currency slump

Shares in PZ Cussons have tumbled by nearly a fifth after the consumer goods giant revealed it had swung to a loss, as it continues to be rocked by volatility in the Nigerian economy.

The Manchester-based maker of household brands including Imperial Leather, Carex and St.Tropez said "we have clearly had our challenges" as it unveiled its half-year results.

The company showed it swung to a statutory pre-tax loss of £94.2 million in the six months to December 2023, down from a profit of £40.5 million the previous year.

Revenues fell by nearly 18% over the same period, from £336.9 million to £277.1 million.

The business has a major market in Nigeria, which represents more than a third of its total sales, and has regularly stressed a prolonged slump in the value of the naira, the country’s currency, has wiped money from its sales.

It emphasied the currency is about 70% weaker than a year ago, which represents the biggest drop in value in its history. Inflation in the region is also at a 30-year high of nearly 30%.

PZ Cussons said this led to foreign exchange losses of about £88 million, dragging on its profits and sales.

Chief executive Jonathan Myers said the currency slump has been "the most significant challenge we have faced by far" and warned it is likely to impact the group’s full-year results.

It now expects to report an adjusted operating profit in the range of £55 million to £60 million.

Meanwhile, its beauty brands have performed worse than the group expected in recent months, driven by declining sales for self-care brand Sanctuary Spa.

In the UK, it reported a significant improvement in the performance of its personal care division, consisting primarily of soap brands Carex and Imperial Leather, and Cussons Creations and Original Source shower gel.

It said it had grown its share of the market for the first time in several years.

"We have clearly had our challenges but have also delivered a turnaround in our UK personal care business and put in place measures to address the underperformance in our beauty business," Myers added.

"As we look ahead we remain confident about the long-term potential for PZ Cussons as we build a higher growth, higher margin, simpler and more sustainable business."

Shares in PZ Cussons were down by about 20% on Wednesday morning.