LONDON–PZ CUSSONS PLC (PZC.LN) reported Tuesday a 38% fall in pretax profit for the first half of fiscal 2017 due to challenging trading conditions within Nigeria and Australia, but said the company’s performance has been in line with expectations.
The company said it had postponed product launches in Australia for the second half of the fiscal year to improve performance. Trading in Europe, however, has been good, the company said.
The consumer products group made a pretax profit of 24.9 million pounds ($30 million) for the six months ended Nov. 30, less than the GBP40 million made in the previous comparable period. Revenue fell to GBP378.2 million from GBP385.9 million.
The board declared an interim dividend a share of 2.67 pence, up 2.3% from last year’s 2.61 pence.
PZ Cussons said liquidity in Nigeria remains poor with the exchange rate continuing to weaken on both interbank and secondary markets, due to low oil prices which have contributed to reduced income for the country leading to continued pressure on the currency.
Chairwoman Caroline Silver said group remained on track to deliver its full year expectations and that it had increased the interim dividend by 2.3 per cent to 2.67p per share.
She said: “In this first half of the 2017 financial year, the Group has faced a backdrop full of challenges across most of the markets where we operate. This was by no means unexpected and so, despite this, the results presented today reflect a solid performance with revenue and profit only slightly lower than the previous period.
“The strength and breadth of the Group’s product portfolio has allowed us to hold or grow the share of our brands in our main markets and product categories. We intend to reinforce this in the second half of the financial year with a number of major launches and relaunches taking place. Our ability to be agile and nimble is a core strength and a differentiator against our larger competitors.
“In Nigeria, consumers are faced with an almost doubling of costs for everything they have to buy and in this environment they turn strongly to brands that they know, love and trust. Our diverse range of well established products across multiple categories are well price positioned with good availability across the country.
“The balance sheet remains strong, with net debt at 1.5 x EBITDA giving us the flexibility to take advantage of new investment opportunities as and when they arise.”
Shares slipped nearly 10 per cent to 304.40p per share.