Shares in beauty and personal care product supplier PZ Cussons (PZC) have dropped 8.6% in morning trading after the Imperial Leather maker revealed a 38% drop in first half profits.

Profits were driven down by a £15m currency hit in its troubled key market of Nigeria, where consumers are under pressure as a results of a 40% devaluation of the Naira against the US dollar.

The exceptional costs pushed pre-tax profits at PZ Cussons in the six months to 30 November down to £24.9m, compared with £40m in the same period a year ago. Profits before exceptional items were down just 4.5% to £40.2m.

Revenues at the consumer goods group also fell 2% in the period to £378.2m.

The group said its UK performance in the washing and bathing division had been “robust”, thanks to new product launches for Imperial Leather, Carex and Original Source.

Chairman Caroline Silver said: “The group has faced a backdrop full of challenges across most of the markets where we operate. This was by no means unexpected and so, despite this, the results presented today reflect a solid performance with revenue and profit only slightly lower than the previous period.

“The strength and breadth of the group’s product portfolio has allowed us to hold or grow the share of our brands in our main markets and product categories. We intend to reinforce this in the second half of the financial year with a number of major launches and relaunches taking place. Our ability to be agile and nimble is a core strength and a differentiator against our larger competitors.

“In Nigeria, consumers are faced with an almost doubling of costs for everything they have to buy and in this environment they turn strongly to brands that they know, love and trust. Our diverse range of well-established products across multiple categories are well price positioned with good availability across the country.”

She added that PZ Cussons remained on track to deliver full-year expectations.

The group increased the interim dividend by 2.3% to 2.67p per share to attempt to ease any investor concern over first half performance.

However, the shares dropped 8.6% this morning back to 307.6p.