PZ Cussons cuts dividend by 44% after Nigerian currency collapse

Consumer goods group PZ Cussons has reduced its dividend by almost half after the collapse in Nigeria’s currency delivered a significant hit to full-year profits.
The blow saw shares in the FTSE 250 consumer goods group behind Imperial Leather soap and Carex hand-wash tumble by as much as 16 per cent on Wednesday.
Pre-tax profits declined 39.7 per cent to £44.7 million in the 12 months to May 31, on revenues down 20 per cent to £528 million year-on-year.
The drop-off in revenue largely stemmed from a 70 per cent fall in the value of the Nigerian naira amid spiralling interest rates, political uncertainty and currency reforms. The business carried out nearly 30 rounds of price increases in its Africa market during the financial year to keep pace with the weakening of the currency.
The Manchester-based company is now exploring the sale of its entire Africa business, which accounted for more than a third of sales as recently as 2023, as part of a strategic review. Excluding the African market, like-for-like revenue slipped by 2.6 per cent.
Jonathan Myers, chief executive of Cussons, said: “The good news is we’re able to report that we’ve had expressions of interest that really recognise the potential of the people and the brand of our Nigerian and Africa operations.”
Myers added that there were “lots of reasons for confidence, but also we’ve got to demonstrate that we are dealing with the challenges of our exposure to Nigeria”.
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The consumer goods group is also planning to sell St Tropez, its self-tanning brand, and said that plans to dispose of the business are “progressing”.
PZ Cussons is just one of a number of western businesses that have been retreating from Nigeria amid political and economic turmoil. Unilever and GSK have also downsized their operations in the country.
Shares in PZ Cussons have declined by about 45 per cent in the past 12 months as the depreciation in the naira caused the group to cut its earnings forecasts and dividend. The board announced a dividend of 2.1p a share, bringing the full-year dividend to 3.6p per share, down 44 per cent from the previous year.
The group’s UK personal-care division, which include brands such as Original Source and Imperial Leather, reported double-digit revenue growth during the year, while Carex returned to profit.
PZ Cussons has traded in Nigeria since 1899 and traces its beginnings to a colonial trading post set up in Sierra Leone by George Paterson and George Zochonis, whose names provide the “PZ” in the company’s name.
PZ Cussons expects to report operating profits of between £47 million and £53 million for the 2025 financial year, assuming that foreign exchange rates of the first quarter hold steady for the rest of the year.
Shares in PZ Cussons fell sharply in early trading before paring back some losses to stand at 15¾p, or 15.2 per cent, down at 87½p at close on Wednesday, the lowest for five months.