Revenue jump for Imperial Leather maker despite banknote chaos in Nigeria

Imperial Leather maker PZ Cussons said that its sales had been impacted by the botched recent banknote rollout in Nigeria, but it has still managed to grow revenue as it raised prices.

The soap business reported a 6.2% hike in third-quarter revenue “driven primarily by price/mix improvements” on Thursday as it saw improvements in Europe and the Americas.

Across Africa, trading remained in line with expectations, and the brands that PZ Cussons defines as “must win” saw good growth.

However, in Nigeria, which is a major market for the business, demand was disrupted in December and January amid local chaos sparked by elections and the bank note changes.

Nigerians were forced to queue for hours in January and February to withdraw cash as the Government unveiled new bank notes and the old notes expired.

The move was intended to clamp down on counterfeiting and try to stop people hoarding cash at home.

But the rollout was chaotic, and many Nigerians reported difficulty getting the cash to pay for food and other basics.

“Strong trading throughout December and January was partly offset by disrupted demand in Nigeria in February due to bank note changes and the elections,” PZ Cussons said.

“These disruptions have largely dissipated and we are now seeing a return to more normal demand patterns.”

Like-for-like revenue grew 9.9% in Europe and the Americas, 1% in Asia Pacific and 7.7% in Africa in the third quarter, the business said.

The business said that adjusted pre-tax profit is expected to be “at least” in line with what analysts expect.

Chief executive Jonathan Myers said: “We have delivered another quarter of mid-single digit revenue growth, in line with our longer-term ambition.

“This represents a sixth consecutive quarter of growth, with the business underpinned by the strength and depth of our portfolio and our ongoing strategy to invest behind our brands, build internal capabilities and serve consumers better.

“As anticipated, performance has strengthened in Europe & the Americas, with a return to revenue growth and a marked improvement in profitability in the quarter.

“As a result, we remain confident in delivering against FY23 expectations and that further strategic progress will be made in the balance of FY23 and into FY24.”