The stark fall in Nigeria's naira currency and the impact of plummeting oil prices on its economy are undoubtedly a challenge for personal goods giant PZ Cussons (PZC). The west African country, which accounts for 26 per cent of group operating profits, saw margins in the personal care and home care segments impacted by lower volumes and its electricals division saw revenue fall due to falling disposable incomes. But according to chief financial officer Brandon Leigh a shareholder recently said: "If anyone can navigate Nigeria, it's PZ Cussons", given its more than a century of history there.
Acquisitions were key for the group this time. The purchase of African beverage company Nutricima contributed £53m in revenue and prevented a sales slump across the region while the five:am purchase led to an additional £3.3m for Asia, helping reduce the severity of the dip in turnover there. Mr Leigh said there was no active strategy to reduce Nigeria's sales contribution but future acquisitions would more likely be in the UK and Australia.
Prior to the results, analysts at Shore Capital expected adjusted pre-tax profits of £102m for the year to May 2017 leading to EPS of 17.4p, compared with £103m and 17.2p in FY2016.
| PZ CUSSONS (PZC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 327p | MARKET VALUE: | £1.40bn | |
| TOUCH: | 326.2-327p | 12-MONTH HIGH: | 353p | LOW: 241p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 117p* | NET DEBT: | 27% | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 859 | 49.0 | 8.0 | 6.72 |
| 2013 | 883 | 95.0 | 14.8 | 7.39 |
| 2014 | 861 | 124 | 21.5 | 7.76 |
| 2015 | 819 | 84.0 | 12.5 | 8.00 |
| 2016 | 821 | 83.7 | 16.2 | 8.11 |
| % change | - | - | +30 | +1 |
Ex-div:11 Aug Payment:06 Oct *Includes intangible assets of £357m or 83p a share | ||||
