PZ Cussons profits hit by Nigerian downturn

PZ Cussons profits have tumbled by almost a third after disruption in Nigeria hit one of its largest markets.

The maker of Imperial Leather soap and St Tropez fake tan reported pre-tax profits had slumped by 32pc to £84m in the year to the end of May. Revenue declined by 5pc to £819m during the year.

PZ Cussons warned that it remained at risk from further devaluation in the Nigerian naira as overseas products become more expensive. The naira declined by 25pc in the second half of the year as the oil-dependent state suffers from a collapse in commodity prices.

The company spent £9.9m increasing its stake in its Nigerian subsidiary to 72.8pc during a year that was also dominated by an outbreak of Ebola, increased activity from terrorist group Boko Haram, and presidential elections.

The elections, which saw former military ruler Muhammadu Buhari replace Goodluck Jonathan, resulted in a relatively short loss of trading days, but uncertainties remained, the company said.

Profits during the year were also hit by costs from the sale of its Polish home cleaning products business and other costs related to reorganising the company. Management said that pre-tax profits before these exceptional items declined by just 5pc to £109m.

Richard Harvey, chairman, described the performance as "solid", but the outlook remained "challenging".

Australian sales were “significantly affected” by weak consumer confidence after the mining industry that provides much of the country’s wealth suffered a collapse in prices.

The UK business showed strong sales from its St Tropez tanning range, but this was not enough to offset weakness elsewhere.

The brand, fronted by supermodel Kate Moss, recently launched a new in-shower fake tan product that sold out within days of its launch, prompting the company to produce an extra one million bottles.

Shares in PZ Cussons fell 1.8pc to 353.6p in early trading.