By Modupe Gbadeyanka
Leading soap and cosmetic manufacturer, PZ Cussons Plc, has said it is not expecting much from its businesses in Nigeria.
A subsidiary of the British firm in the Africa’s largest economy, PZ Cussons Nigeria Plc, is listed on the local stock exchange based in Lagos.
In its trading update for the third quarter ended February 29, 2020, PZ Cussons said revenue from its African operations declined overall in the period under review.
It further said continued growth in Electricals and in selected premium brands from the continent was impacted by continued decline in its value brands in Home and Personal Care.
PZ Cussons said though the COVID-19 pandemic caused an “exceptionally high demand for our Carex hand wash and sanitiser gel products and Imperial Leather soap” in the United Kingdom, “The situation in Nigeria is uncertain.”
According to the firm, “The recent fall in the global oil price has led to further economic pressure, and the Covid-19 situation continues to develop.
“All our Nigerian businesses are likely to be impacted by the significant disruption to both manufacturing and route to market.”
The company stated that in the third quarter of its present financial year, the sale of local Polish brand Luksja for £9.2 million was completed.
In addition, the disposal of Nutricima, its milk business in Nigeria, was also finalised in the quarter for $20.3 million.
“Our target debt level for the year-end remains at £110 million in line with guidance at the half year,” PZ Cussons said.
Commenting further on its liquidity position, PZ Cussons said it entered the current crisis with a strong balance sheet as a result of its historical prudent financial position.
“PZ Cussons’ external funding is through a syndicated borrowing facility which is provided by a syndicate of six lenders in the form of a £325 million committed multi-currency revolving credit facility committed until November 28, 2023.
“As at 29th February 2020, we had headroom of £147 million under our committed facilities.
“We continue to focus on management actions to manage liquidity carefully across the group.
“Recent actions taken have included the cancellation of capital expenditure projects, the review of the cost base, particularly in those areas of the business most impacted by Covid-19 and working capital initiatives across our business,” it said.
On its outlook for the year, the firm said, “Whilst there is a high level of uncertainty regarding the full impact of Covid-19 across all of our different businesses and markets continues, at this point our guidance on profit remains within consensus, albeit at the lower end.”
PZ Cussons said it will continue to support in the fight against the Coronavirus disease and continue to “support those most at risk in our communities.”
It said programmes have been designed for the distribution of free soap, sanitiser and hand wash to those most vulnerable and in need.
“For example, in the UK, our That’s why we Carex programme is working with the homeless, elderly and other vulnerable groups.
“In Nigeria, the PZ Cussons Foundation is distributing soap in the north of the country, while in Asia, we support those communities close to our manufacturing sites,” the company stated.
Business Post reports that as at the time of filing this report on Friday afternoon of April 17, 2020, share price of PZ Cussons on the Nigerian Stock Exchange (NSE) was up by 40 kobo at N4.40 per unit.
