PZ Cussons (LSE:PZC)' relationship with Nigeria has always been a bit double-edged and it has caused some pain this year with a warning about the potential impact on revenue and profits from the devaluation of the naira.
Recently, the soap maker said it wants to acquire the 26.73% stake in its Nigerian offshoot it doesn't own for £22.8 million to make things more managable.
The maker of Imperial Leather soap, Carex and St Tropez says that every 10% devaluation in the naira is estimated to result in a £23 million reduction in revenue, £3 million reduction in adjusted operating profit, and a 0.5p reduction in adjusted earnings per share.
For next week's finals, PZ Cussons (LSE:PZC) now forecasts adjusted pre-tax profit for the year to 31 May 2023 of at least £70 million, reflecting a particularly strong fourth-quarter performance in Africa, above a company-compiled consensus of £68.4 million.
Like-for-like revenue in the financial fourth quarter grew 6.7%, resulting in annual growth of 6.1%.
Group revenue for the year is forecast to be around £655 million with like-for-like growth in each geographic region in the fourth quarter.