22nd July, 2015
The tumbling oil price, a weak currency and the threat of violence in Nigeria has hit profits at the maker of Imperial Leather.
PZ Cussons, which also makes St Tropez fake tan and Sanctuary Spa bubble bath, said annual pre-tax profit tumbled 32 per cent to £84 million and sales fell nearly 5 per cent to £819million.
Around 40 per cent of the group’s sales come from Africa and Nigeria is its biggest market on the continent.
The ebola outbreak, terrorists Boko Haram, presidential elections and a significant currency devaluation hit the Nigerian economy where PZ Cussons has three factories and has major market share of soaps and washing products.
But chief financial officer Brandon Leigh said the group has been in the country for more than 100 years and can weather the short term issues there.
The full-year update was largely as the City expected and Investec described the results as ‘solid in some challenging conditions’.
Analysts at Canaccord Genuity said the region had shown improvement in the second half.
Overall like for like sales grew 2.3 per cent but sales in Australia were disappointing. In the UK demand for its St Tropez and Sanctuary brands helped sales across its beauty category.
The launch of a new St Tropez shower gel tanning product has been popular and the company now expects sales of 1m bottles – well above its original forecast of 30,000.
It said ‘product innovation’ had helped drive sales across its soap division which includes brands Imperial leather, Original Source and Carex. Leigh added: ‘We have very strong brands and we are focused on growing these in all our markets.’
He said despite the difficulties of currency fluctuations and the largely tough economic backdrop the group increased its dividend for a record 42nd year in a row.
He added: ‘Our developed market business growth provides the cash to continue to grow the dividend.’ PZ Cussons announced a final dividend of 5.39p – equating to a total dividend of 8p a share – a 3.1per cent increase. Shares slipped 2.7p to 357.3p.