Hair care manufacturer PZ Cussons has seen business in the UK and Asia boost profits for the first half of the year, but there are big concerns over poor performance in its key African market.
The British firm has been hit by tough trading conditions in Nigeria, which accounts for most of its business in Africa, and this offsets the stronger performances elsewhere.
Pretax profit rose to £44.1 million (€51.3m) during the six months to November 30, and revenue was flat at £414.8 million, hurt by trading conditions in Nigeria.
The shampoo maker reported the 10 per cent increase in first-half profit thanks to a ‘robust’ performance in the UK with its washing and bathing division, and a positive period in its Australian business; which returned to profit.
“A new management team has brought focus to the Australian business from a sales perspective, whilst manufacturing savings have resulted in a return to modest profitability,” said the soap maker.
Despite a strong performance in Australia and other Asia markets, this only accounts for 20 per cent of the firm’s revenue; and with Africa accounting for 45 per cent of revenue, the tough trading is taking its toll.
There has been unrelenting religious violence in the north, coupled with weak consumer spending following the removal of a fuel subsidy in Nigeria, prompting the company to warn on profit in 2012.
"While trading conditions in most markets are challenging, we remain confident of a return to profitable growth for the full year, with the range of potential outcomes being largely dependent on trading in our largest market, Nigeria,” explained PZ Cussons.
"Social unrest in the north of the country continued to affect the business as a result of disruption to trade and transport routes."