Soap maker PZ Cussons expects only a minimal surplus cash position remaining in its Nigeria business beyond what is required for trading by the end of its current financial year.
The company had earlier said the devaluation of Nigeria's currency would adversely impact its profit and in September offered to buy out minority shareholders of PZ Cussons Nigeria amid plans to de-list the business from the Nigerian stock exchange.
PZ Cussons, however, said first-half trading has continued to be strong in its Nigeria business and many of its brands have held or gained market share there.
'We expect to achieve an improvement in both gross and operating profit margins in the first half of the year, despite very high levels of inflation,' the company said about its Nigerian business.
Inflation in Africa's largest economy had risen to its highest level in nearly two decades earlier this year after the country scrapped a popular but costly subsidy on petrol and devalued the currency.
Trading Update
In its trading update, PZ Cussons said that it expects to report a low-single-digit like-for-like revenue growth for the first half of fiscal year 2024 (H1 FY24).
This is being driven by strong performance in Nigeria and the Australia and New Zealand (ANZ) regions, offset by a decline in Indonesia.
The Europe and Americas business remains stable overall, with improving momentum in the UK washing and bathing brands but a decline in the Beauty business.
The company expects a solid year-on-year operating margin improvement in H1 FY24 and foresees both revenue growth and operating margin improving in H2 compared to H1.
Additional reporting by ESM
