Soap maker PZ Cussons says it has started to repatriate cash back to her holding company in the United Kingdom in recent weeks.
The FMCG giant stated this in a trading statement preluding its Annual General Meeting (AGM) billed to be held today.
It stated,
- “We have also started to repatriate cash in recent weeks which, combined with underlying strong free cash flow, is expected to result in a c. £20 million reduction in Group gross debt since 31 May 2023.”
It further stated that its current naira cash balance is valued at around £80-100 million and expects to return around £30-50 million before the end of the 2024 financial year if current economic conditions remain unchanged.
In its words,
- “Based on prevailing rates, the current Naira cash balance is equivalent to c. £80-100 million. Assuming current market conditions persist, the Group aims to repatriate a further £30-50 million of cash by the end of FY24.”
Although the firm noted the challenges posed by the unavailability of US dollars on its daily operations. It further explained that the lack of USD has forced it to devise operational and corporate strategies to assuage the effects on its day-to-day operations.
Growth projections
- Speaking on growth projections, the firm noted it expects to see growth in its gross and operating margins for the year despite increasing inflation in Nigeria. It stated thus, “The majority of our brands have held or gained market share and we have seen no material change in our volume trends in recent weeks. We expect to achieve an improvement in both gross and operating profit margins in the first half of the year, despite very high levels of inflation.”
Backstory
Foreign companies in Nigeria have not been able to repatriate their profits or even capital in recent times due to the shortage of USD in the Central Bank of Nigeria resulting in a backlog amounting to billions of USD.
Nairametrics reported the amount of trapped funds for international airline operators in Nigeria at $812.2 million, the highest in the world.
The Governor of the apex bank during his senate screening stated that the immediate priority of the new team will be to clear the backlog of FX owed to businesses. He estimates the figure to be around $7 billion.
Earlier in November, nairametrics reported the commencement of the clearance of FX backlog by the country’s lender of last resort.