Revenue slump at PZ Cussons blamed on Nigerian currency fall

Manchester consumer products group, PZ Cussons, is benefiting from its new strategic focus, but has been undermined by the record fall in the Nigerian Naira currency, it said in a half year update today.

Revenues for the six months ended December 2, 2023, slumped 17.8% to £277.1m, while pre-tax profits fell by 24.3% to £26.1m.

Due to the catastrophic fall in the Naira, the board has decided to recommend an interim dividend of 1.50p with the aim of achieving a cover of approximately two times for FY24.

Jonathan Myers

Jonathan Myers, Chief Executive Officer, said: “PZ Cussons is a stronger business than when we launched our new strategy, as demonstrated by our ninth consecutive quarter of like for like revenue growth and, on a constant currency basis, double-digit operating profit growth in the first half of the financial year. 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.

“The most significant challenge we have faced by far has been the devaluation of the Nigerian Naira, which is today around 70% weaker than a year ago, representing the biggest drop in the currency’s history. As we set out in September 2023, macroeconomic developments in Nigeria would be the key determinant of the FY24 results. Whilst we continue to make good progress in managing this volatility, the further devaluation in recent weeks will inevitably impact our FY24 results. As a Board, we have taken the prudent step to reduce the interim dividend in light of the devaluation.

“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.”