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PZ Cussons in fresh lather after slipping in Nigeria

Oliver Gill
PZ Cussons makes Imperial Leather shampoo - © 2016 Bloomberg Finance LP

PZ Cussons, the maker of Imperial Leather and Carex, has warned problems in Nigeria have “tightened further” and warned that its annual profits will be at the lower end of expectations.

Nigeria, one of Cussons’s key markets, has become a thorn in its side over recent months. In March the company issued a profit warning, highlighting weaker sales in Nigeria and the UK. Profits were guided between £80m and £85m.

Today PZ Cussons said trading in these two markets “remain difficult”. But while the UK has been in line with revised expectations, sales in Nigeria have worsened.

With an economy heavily dependent on oil production Cussons had hoped a resurgence in oil prices would provide a catalyst for increased demand in its products. However, the company said today that “liquidity has not flowed down into the economy”.

In addition, wages in the country continue to lag inflation, putting pressure on household incomes, it said. 

PZ Cussons share price

The company also reiterated prior warnings of about tough times in UK retail, saying that "consumers [were] shopping more cautiously as a result of economic uncertainty and inflation out-stripping wage growth". 

The FTSE 250 firm’s beauty range, which includes St Tropez, Sanctuary and Charles Worthington, had performed well in Europe, however.

PZ Cussons traces its roots back to 1884 when George Paterson and George Zochonis set up a trading post in Sierra Leone, connecting West Africa to the UK. The first Nigerian branch office opened in 1899.

Darren Shirley of Shore Capital said: “Visibility remains low, for both us and management, [which is] not aided by elections in Nigeria and Indonesia in 2019.”

Shares closed down 5.4pc at 220.2p on Thursday.