PZ Cussons has forecasted a higher full-year profit, encouraged by a strong fourth-quarter performance in Africa and improvement in the soap maker's margins due to price hikes earlier in the year.
The London-listed company is expecting annual adjusted profit for the full-year ended May 31 to be £70 million (€81.6 million) compared with £66.6 million (€77.7 million) a year earlier.
The Imperial Leather and St Tropez maker achieved like-for-like revenue growth of 6.7% in the fourth quarter, contributing to an overall growth of 6.1% for the entire fiscal year.
It expects its group revenue for FY23 to reach approximately £655 million (€763.8 million), with growth in like-for-like revenue observed across all geographic regions during the fourth quarter.
This positive outcome marks the third consecutive year of like-for-like revenue growth for the company.
'Challenging Economic Backdrop'
"PZ Cussons has delivered another year of progress against a challenging economic backdrop. We have continued to transform the business and build brands for the long term, while responding to the day-to-day challenges of cost inflation and meeting the needs of the cost-conscious shopper," commented Jonathan Myers, chief executive.
"This has resulted in a third consecutive year of like for like revenue growth in FY23. We remain committed to delivering the benefits of executing our strategy in the year ahead."
The group added that the devaluation of the Naira, Nigeria's currency, is expected to have a temporary effect on the firm's financial performance in the short term. However, the company believes that the underlying factors and long-term growth potential of its Nigerian operations are strong and will ultimately lead to improved performance.
Read More: PZ Cussons Acquires Personal Care Brand Childs Farm
Analyst Viewpoint
Commenting on its performance, Russ Mould of AJ Bell said, “At this point it might be fair to question exactly what role Nigeria plays for PZ Cussons given it often seems to mar the company’s updates.
“The country is a big contributor, accounting for nearly a third of PZ Cussons’ revenue, but volatility in the currency and sometimes the country itself often seem to be a problem and may prompt questions about whether a sale of this part of the business could aid the long-term stability of the group.
“The company is on track for a third year of revenue growth and the price increases it has been able to push through have supported an improvement in margins and speak to the strength of a brand portfolio which includes Carex and Imperial Leather.
“The company seems confident it will be a case of short-term pain, long-term gain in Nigeria as the new government brings through economic reforms. Time will tell.”
News by Reuters, edited by ESM – your source for the latest A-Brands news. Click subscribe to sign up to ESM: European Supermarket Magazine.
