PZ Cussons and Nigerian risk

PZ Cussons, which produces Imperial Leather among other well-known toiletry brands, reported a 3.7 per cent fall in operating profits to £42m for the six months to 30 Nov. However, the 2013 comparative figures were flattered by £3.4m in operating profits linked to disposals. Stripping out these and other one-off items, along with the effect of currency translations, operating profits rose 3.5 per cent and the underlying margin moved up 80 basis points to 11.9 per cent.

Revenue comparisons, too, are skewed by disposals - notably the sale last February of the group's low-margin Polish Home Care brands. Hence European revenues were down by a quarter even as reported profits rose marginally. The top-line was also hit by around £26m in adverse currency effects. The Australian Dollar, Indonesian Rupiah and Ghanaian Cedi all pulled back against sterling during the period, but the problems in Nigeria had the greatest impact.

The group continues to make headway with its electrical and cooking oil businesses in the African state: its joint venture with global palm oil giant Wilmar is performing particularly well. But trading and distribution have become increasingly prone to disruptions in the northern part of the country. Adjusted operating profit from the African unit, which is dominated by Nigeria, fell from £14.7m to £12.2m in the half.

Frustratingly, there is no obvious end in sight. With a presidential election on the horizon, Boko Haram could even step up the intensity of its terror campaign. The country's problems have also been exacerbated by the sharp fall-away in crude oil prices during the final quarter of 2014, which has placed considerable strain on Nigeria's oil-dependent economy.

Investec expects full-year EPS of 17.7p, increasing to 19.5p for 2016.