Cussons sees higher profits despite one-off hit from Nigeria devaluation

27th Jun 2023 07:22

(Sharecast News) - Consumer goods giant PZ Cussons said it expected to take a hit from the recent devaluation of the Nigerian naira, but would report higher annual sales and profits.

The Imperial Leather soap maker on Tuesday said it expected revenue for the year to May 31 of £655m and adjusted pre-tax profit of at least £70m, up from £67m a year earlier and against consensus estimates of £68.4m.

Recent liberalisation of Nigeria's foreign exchange regime has resulted in a devaluation of the local currency.

"We believe the medium-to-long-term prospects for our Nigerian business will be much improved by the economic reforms, currently being introduced by the new government," Cussons said, adding that it would offset higher raw materials costs with price increases.

"As a sensitivity, every 10% devaluation in the Naira from the rate used to translate the FY23 income statement is estimated to result in a £23m reduction in revenue, £3m reduction in adjusted operating profit, and 0.5 pence reduction in adjusted earnings per share," Cussons said.

Reporting by Frank Prenesti for Sharecast.com