British health and beauty manufacturer PZ Cussons has cut its dividend following a 70 per cent decline in the value of the Nigerian Naira, which it said has had a “significant” impact on its trading this year.
In an update to markets, PZ said because the Naira has lost so much of its value it is only going to pay an interim dividend of 1.50p in April, 44 per cent less than analysts had expected.
PZ’s Nigerian business makes up 35 per cent of revenue and 22 per cent of net assets.
Shares in the Carex and Imperial Leather maker nosedived over 13 per cent after the opening bell on Wednesday morning.
Chief executive, Jonathan Myers, said: “As we set out in September 2023, macroeconomic developments in Nigeria would be the key determinant of the full-year 24 results.
“Whilst we continue to make good progress in managing this volatility, the further devaluation in recent weeks will inevitably impact our full-year 24 results.
“As a board, we have taken the prudent step to reduce the interim dividend in light of the devaluation,” he explained.
PZ also said today that its revenue declined nearly 18 per cent to £277m, down from £337m in the first half of 2023.
Profits were hit too, falling to £26m in the first half of the year, a 24.3 per cent drop from last year.
For the next year, PZ expects its profits to be between £55m-60m but this depends on how the Naira performs.