PZ Cussons shares tumble after the consumer goods giant reveals £94m loss
Shares in PZ Cussons, the company behind Carex, have plummeted by nearly a fifth.
The Manchester-based firm revealed it had made a loss due to ongoing instability in the Nigerian economy. The company, which also makes Imperial Leather and St.Tropez, admitted "we have clearly had our challenges" as it shared its half-year results.
It showed a pre-tax loss of £94.2 million in the six months to December, a significant drop from a profit of £40.5 million the previous year. Revenues also fell by almost 18%, from £336.9 million to £277.1 million.
Nigeria is a key market for PZ Cussons, accounting for over a third of its total sales. The company has repeatedly highlighted how a long-term slump in the value of the naira, Nigeria's currency, has hit its sales.
On Wednesday, the company said the currency is about 70% weaker than a year ago, marking the biggest drop in its history. Inflation in the region is also at a 30-year high of nearly 30%. PZ Cussons explained this led to foreign exchange losses of around £88 million, impacting its profits and sales.
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Chief executive Jonathan Myers described the currency slump as "the most significant challenge we have faced by far" and warned it is likely to affect the group's full-year results. PZ Cussons now anticipates a adjusted operating profit of around £55 million to £60 million.
However, the company's beauty brands such as Sanctuary Spa have reported lower than expected sales recently. On the brighter side, there has been a marked improvement in sales of personal care products, including Carex and Imperial Leather soaps and Original Source shower gel.
Mr Myers said: "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. 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 experienced a dip of about 20% on Wednesday morning.
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