Exchange problem hits Paterson: Difficulty in obtaining dollars for Nigerian subsidiaries brings profits warning

PATERSON ZOCHONIS, the toiletries and detergents group, saw its share price fall by 10 per cent yesterday after it issued a profits warning caused by foreign exchange problems in Nigeria.

The shares fell 51p to 438p as the group, best-known for its Cussons range, said pre-tax profits for the half-year to 30 November could be 15 to 20 per cent lower than the pounds 13.6m figure struck last time.

Alan Whittaker, finance director, said the problems in Nigeria, which accounts for around 30 per cent of Paterson's business, were rooted in a change in the way US dollars were issued by Nigeria's central bank.

Before last January, Paterson's Nigerian subsidiaries - which, along with other companies, needed dollars to import certain raw materials - used two markets to obtain the currency. Both were run by the central bank, one at the official rate of exchange and the other at a premium rate, which Paterson used to make up the balance required.

However, Mr Whittaker said a log-jam was created in January when the Nigerian authorities decided all bids for currency must go through the official market.

'The problem for the past six months has been getting dollars through the system,' he said. 'There is now a demand far in excess of supply. Nobody gets an amount that satisfies them.'

Typically, a bid for dollars 1m was receiving dollars 50,000.

Paterson did not wish to play down the size of the problem facing it. 'The situation is serious,' Mr Whittaker said.' I don't think it's been more difficult.'

It is understood the company hopes the Nigerian government will revert to the two-tier method of filtering dollar transactions in its next budget, expected in December or January.

Paterson also announced yesterday that taxable profits in the year to 31 May rose to pounds 28.1m against pounds 25.3m last time. A final dividend of 11.4p makes a total of 13.85p, up from 12.6p.

The company said operations in Nigeria were also hamstrung by industrial unrest, power failures and fuel shortages. Elsewhere in Africa, profits advanced in Kenya and Ghana.

Turnover and profits of Cussons UK showed satisfactory increases, aided by higher export sales. Profits also recovered in Greece following last year's setback as the previous oversupply of olive oil was taken up. Plans for a second factory outside Athens are being considered. The operations in Poland and Thailand also advanced.

Profits from associate companies rose to pounds 4.7m ( pounds 3.1m).

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Tour de France 2015: Twins Simon and Adam Yates have a mountain to climb during Tour of duty

Twins have a mountain to climb during Tour of duty

Yates brothers will target the steepest sections in bid to win a stage in France
John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water