PZ Cussons profits will be flat as strong UK balances Nigerian weakness

Personal care and beauty products maker PZ Cussons has maintained a flat performance in the first six months of its financial year but warned that risks remained about its key market of Nigeria.

The maker of St Tropez fake tan and Imperial Leather soaps, among numerous other well-known brands, confirmed profits were "broadly flat" compared to the same period last year as a strong performance in the UK balanced a Nigerian market where the oil price slump has hit consumer disposable incomes.

While Nigerian demand for personal and home care remained solid, and are expected to continue so, the lack of disposable income hit the local Haier Thermocool electricals business, which makes refrigerators, freezers and washing machines.

If there is no improvement in the Nigerian economy, the electricals performance in the seasonally important second half is expected to be "significantly lower".

Weaker currencies in both Asia and Africa also weighed on profits, with Nigeria also placing additional foreign exchange restrictions on certain imported items.

Cussons also warned trading in the PZ Wilmar edible oil joint venture will be impacted by restrictions on foreign exchange liquidity.

On the upside, product market shares remained strong or grew in all markets, the company said, and the performance in Europe and Asia is expected to continue to be robust in the second half.

Also, the European division, which is predominantly focused on the UK, enjoyed a strong half-year, driven by the new product pipeline, including the launch of a new range of Carex bodywash products.

St Tropez's contributed to a particularly strong beauty performance, with its new in-shower gradual tan lotion generating strong sales and the Sanctuary brand benefiting from a new campaign and ranges.

Performance in the smaller markets of Poland and Greece was in line with expectations.

Asia saw increased costs from weaker exchange rates, reduced consumer disposable income and reduced results on translation to sterling, but Cussons made good progress overall with solid Australian and Indonesia sales. In the smaller Asian markets, Thailand performed well while the Middle East performance was marginally lower.

Shares in Cussons were down 2.7% to 297.5p by 0910 GMT on Thursday.