PZ Cussons profits plunged again last year due to the woes of the Nigerian naira, though the currency’s recent stabilisation gives some grounds for optimism.
The owner of Carex and Imperial Leather saw revenue fall 10% to £249m in the six months to 30 November due to a 55% depreciation in the Nigerian naira compared with the prior period.
This brought pre-tax profits down 24% to £19.8m while earnings per share also plunged.
PZ Cussons gave no update on its plans to sell its African business, which has been plagued by Nigeria’s currency issues since June 2023. Its African operations now account for just 25% of group revenue, down from around 40% two years ago.
However, there are glimmers of hope for PZ Cussons, with the naira now enjoying a run of relative stability that many analysts expect to last.
PZ Cussons’ core business is also performing strongly, with like-for-like sales up 7.1%, driven by pricing in Africa and growth in the UK and Indonesia.
“With this backdrop, and a somewhat more stable environment in Nigeria in recent months, I believe we are now firmly in the transformation phase of our journey,” said CEO Jonathan Myers.
PZ Cussons’ share price rose 11% in early trading on Tuesday after the results.
The UK recorded its strongest profit performance in three years after several years of decline. Myers said this was due to new products, competitive brand activations, and increased retail distribution, as well as a strong Christmas performance led by Sanctuary Spa.
Indonesia also performed well with a third consecutive quarter of growth, the business said, while in Australia and New Zealand, its brands grew market share – albeit against a backdrop of market softness.
The company’s struggles in Africa created a big debt pile, with gross debt hitting £251m at the end of 2023. This is now down to £151m, though the most recent £14m fall in the period was partly due to the phasing of a dividend payment in December, it said.
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