Soap maker PZ Cussons says it expects its 2024 full-year profit to range between £55 and £60 million despite a 23% adverse movement in the value of the naira.
This was disclosed in its fourth quarter trading update where it projected revenue to reach around £528 million in the year ending May 31, 2024.
The statement noted that surplus cash from its Nigeria business is reduced as the company continues to prioritise cash repatriation from Nigeria.
It stated, “The Group expects to report FY24 revenue of approximately £528 million. Despite a 23% adverse movement in the value of the Nigerian Naira since our Q3 trading update in April 1, the Group expects to report adjusted operating profit in the region of £55-60 million, in line with previous guidance. Gross debt as of 31 May 2024 is also expected to be comfortably within the guided range of £160-180 million. Surplus cash in Nigeria is minimal as a result of prioritising the continued repatriation of cash.”
The company also disclosed that updates on its planned review of its African business will be provided at an appropriate time in the future.
It said, “On 24 April 2024 the Group announced its plan to maximise shareholder value from a portfolio transformation, following a strategic review of brands and geographies. An update will be provided when appropriate.”
Following the announcement today, the company’s share price remained unchanged on the NGX at N22 per share.
Backstory
In April this year, PZ Cussons reported a 23% decline in revenue due to FX losses from Nigeria despite revenue growth of 6% in Q3, 2024. It also stated that the depreciation of the naira is pushing prices of its product, but sales volumes were not affected, giving credit to the impact of its marketing activities.
Furthermore, the company then also stated that it is evaluating its Group portfolio especially its African business to improve shareholder value and will continue asset disposal in Nigeria.
Additionally, the company announced the successful repatriation of £35 million in cash from Nigeria and anticipates repatriating an additional £15-20 million by the end of next month. Its CEO also said there is much more to do to open the opportunities of the Nigerian market despite the severe macroeconomic woes bedevilling the country.
What you should know
PZ Cussons has been embroiled in an impasse with its minority shareholders after the company announced plans to delist from the NGX.
Its buyout offer of N23 per share has been roundly rejected by the shareholders and to add insult to injury, the Securities and Exchange Commission (SEC) have rejected the buyout offer.