PZ Cussons proposes N0.50 dividend as PAT roars by 52.8%
. Provisions climbed to N2.7bn
Mixed reactions has continued to trail the release of PZ Cussons Plc’s fourth quarter 2017, as the company closed as highest loser on the day the result was released.
The result reflects a mixed blend, stronger year on year(y/y) performance, and weak quarter on quarter (q/q) performance.
The company’s Q4 result for the period ended 31th May, 2017, released by The Nigerian Stock (NSE), the PZ Cussons recorded growth on key performance measuring indices, just as its provisioning and operating expenses soared.
On a full-year basis, the result showed that 2017 financial year recorded sales’ growth of 14.5 per cent y/y to N79.6bn, while PBT and PAT advanced 52.8 per cent y/y; and 78.4 per cent y/y to N4.8bn and N3.3bn respectively.
The Branded Consumer Goods’ segment, which grew by 22.2 per cent y/y to N56.2bn, accounted for over 70 per cent of the overall sales’ growth. The Durable Electrical Appliances segment sales of N23.4bn, was however flattish y/y.
The full-year group gross margin expanded strongly, by 604bps y/y to 35.1%. Fx loss came in at N8.8bn vs N2.9bn in the prior year. This can be attributed to fx-denominated payables among its current liabilities. Also, trade payables grew by 54.5% y/y to N39.7bn in 2017.
The result showed that the consumer goods’ giant in Q4 2017, posted 144 per cent y/y growth in profit before tax and 371 per cent y/y advancement in Profit After tax (PAT). Following the robust performance, a dividend of N0.50 is being proposed by the company. This gives dividend yield of 1.8 per cent on the last traded price of N27.30.
The result, which a cross-section of analyst have lauded triggering positive market reaction, is expected to spur the company’s shares to hyper gains on short to middle- term basis, following expectations of reaping from dividend declared.
According to the result, PZ posted sales growth of 19.1 per cent y/y to N22.5bn as PBT; and PAT rose by 143.6 per cent y/y and 370.7 per cent y/y to N2.5bn and N1.8bn respectively.
The company’s strong bottom-line was buoyed by 168bps or 38.8 per cent gross margin expansion, which hedged and cleaned off 14.9 per cent y/y rise in operating expenses and a N2.7billion exchange rate loss.
Daily Times recalls that from mid-2015 to early 2017, fx liquidity issues in Nigeria hampered PZ Cussons profitability. Although the results were strong y/y, they were relatively weaker than the more impressive Q3 2017 results.
Sales and PBT fell by -5.7% q/q and -11.7% q/q respectively while PAT was flattish q/q.
Its parent company, PZ Cussons UK, stated in its Q4 2017 group trading statement that the Personal Care, Home Care, Food & Nutrition and Electrical businesses for the Nigerian subsidiary performed relatively well.
Bonny Amadi
