Manchester-based soaps and consumer products company PZ Cussons said its adjusted profit before tax fell 21.5% to £80.1 million for the year to May 31, 2018, “largely due to poor performance in Nigeria as a result of the macro economic situation.”

Adjusted revenue fell 5.8% to £762.6 million.

PZ Cussons’ shares fell almost 3%.

PZ Cussons chair Caroline Silver said: “Whilst the group has delivered good profit growth in Asia and a creditable result in Europe, macro-conditions in Nigeria have resulted in a sharp decline in Africa profits for the year and hence a disappointing result for the group as a whole. 

“Within Africa, and in particular Nigeria, it is important to note that there has been no structural change in the landscape of the categories in which we operate.

“We remain proud of our brand portfolios across personal care, home care, electricals and food & nutrition and of our extensive manufacturing and logistics capability, and many of our brands have strengthened their No.1 or No.2 positions during the last year.

“However, a sustained lack of liquidity at both consumer and trade level has resulted in a significant contraction in the size of the market, resulting in lower volumes, prices and margins.

“In the absence of an indication as to when liquidity in Nigeria may improve ahead of the February 2019 general elections, we are taking steps to optimise further our overall product portfolio and to reduce our cost base.

“Within Asia, our businesses in Australia and Indonesia have made sound progress in the year, setting good foundations for growth in the years to come.

“In Europe, good growth in the group’s beauty division has helped to partially offset the more challenging trading conditions faced in the UK washing and bathing division.

“Furthermore, for all markets, we remain focused on innovation but with a sharpened lens on fewer, bigger, higher margin product launches which will differentiate further our brands, as well as a reduction in overheads through optimising our operating model.

“The group’s balance sheet remains strong and we will continue to evaluate growth opportunities utilising the group’s brand portfolio and distribution capability.

“Whilst we expect another challenging year ahead, the business is well placed to return to growth and consequently the board has maintained the full year dividend.”

In its outlook, PZ Cussons added: “We expect macro conditions to remain challenging in most of the markets in which we operate with general elections in Nigeria and Indonesia falling in the second half of the new financial year.

“Commodity costs and exchange rates are expected to remain volatile.”