PZ Cussons shares sink 20% as Nigeria woes hit profits

Shares in personal care products maker PZ Cussons (LSE: PZC) fell 20% on Wednesday after the company lowered its profit forecasts due to a significant negative impact from the Nigerian naira’s devaluation.

The FTSE 250 firm reported a £94.2 million pretax loss for the six months to December 2, swinging from a £40.5 million profit last year, as it booked an £88.2 million foreign exchange loss relating to the 51% drop in the naira over that period.

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Revenue fell 18% to £277.1 million, with the currency devaluation accounting for £52.9 million of that decline.

As a result, PZ Cussons has cut its dividend by 44% to 1.50p and warned that full-year adjusted operating profit would miss previous guidance and likely come in between £55-60 million.

On a constant currency basis, performance was more positive with a 17% rise in adjusted operating profit. But the naira’s 30%+ slide since early December means further pain ahead.

Shares in PZ Cussons are down 52% over the past year.