PZ Cusson for its six months ending 2nd December 2023 has reported operating loss of £89.7 million of which £88.2 million represented the FX loss reported earlier.
The company in its 2024 interim result statement, noted that beyond the reported FX loss, the naira devaluation severely impacted the company’s financial performance in terms of its operating profit, revenue, dividend payment, among others.
The impact of the naira devaluation on the holding company’s performance stems from the fact that PZ’s Nigerian business represents 35 percent of the company’s revenue and 22 percent of its net assets for FY 2023.
The Chief Executive of PZ Cussons, Jonathan Myers speaking on the company’s financial performance stated, “The most significant challenge we have faced by far has been the devaluation of the Nigerian Naira, which is today around 70 percent weaker than a year ago, representing the biggest drop in the currency’s history.”
“As we set out in September 2023, macroeconomic developments in Nigeria would be the key determinant of the FY24 results. Whilst we continue to make good progress in managing this volatility, the further devaluation in recent weeks will inevitably impact our FY24 results.”
The company also reported a decline in revenue by £59.8 million of which £52.9 million was a result of the naira devaluation. This represents a drop of 17.8 percent in the period under review.
However, LFL revenue grew by a mere 2.2% during the period.
As a result of the drop in revenue, the company has adjusted its profit for FY24 in the region of £55 to £60 million.
The statement noted that as a consequence of Nigeria’s macroeconomic woes on the company’s financial performance, the Board agreed to slash dividend payment from 2.67p in H1 2024 to 1.50p representing a decline of 43.8 per cent.
It will be recalled that PZ Cussons Nigeria Plc in September, 2023 announced plans by PZ Cussons (Holdings) Limited, to acquire shares held by all its shareholders at an offer price of N21 per share.
Apart from its Holdings that is in UK, no other shareholder held more than five per cent of the paid-up capital of the Group as of May 31, 2022.
The Nigeria subsidiary of PZ Cussons in a statement signed by its Ag. Company Secretary, Olubukola Olonade-Agaga on the floor of the NGX, said the proposed transaction was subject to the consideration and approval of the board of PZCN, the company’s shareholders and requisite regulatory authorities.
According to her, PZ Cussons Group in its offer explained that it believes the transaction was necessary in order to enable them to significantly simplify and strengthen operations in Nigeria creating the foundations for the Nigerian business to deliver against its strategy.
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