PZ Cussons Weighs Full or Partial Sale of African Business as Naira Devaluation Hits Revenues
Soap maker and household item manufacturer, PZ Cussons, has revealed plans to potentially sell its African business after receiving several expressions of interest. This disclosure was made during the company’s results presentation for the fiscal year ending May 31, 2024, where revenues saw a sharp 19.6% decline, falling to £527.9 million.
Jonathan Myers, the Chief Executive Officer (CEO) of PZ Cussons, attributed the poor financial performance primarily to the 70% devaluation of the Nigerian naira, which significantly impacted the company’s earnings. Despite efforts to cushion the effects of Nigeria’s foreign exchange depreciation, Myers acknowledged that the company’s financials were deeply affected.
“The 70% devaluation of the Nigerian Naira has had significant implications on our reported financials,” Myers said. “We have worked hard to mitigate the impact while continuing to serve Nigerian consumers who are grappling with unprecedented inflation and economic challenges.”
In addition to the African business, PZ Cussons is also moving forward with plans to sell its popular skincare brand, St. Tropez. The company noted that the sale of its African operations could be either partial or complete, depending on the outcome of ongoing negotiations.
“The favourable trends of the second half of FY24 have continued into the new financial year,” the company stated. “We are progressing with our plans to sell St. Tropez and have received a number of expressions of interest for our African business, recognising the potential of our brands and people.”
Despite the challenges, the company remains optimistic about its future, with Myers affirming the long-term potential for PZ Cussons to focus on stronger brands in a more streamlined portfolio.
However, the Board of PZ Cussons Nigeria has responded to the announcement, stating that it has not yet received any formal information from the parent company regarding the proposed sale of its African operations.
In April, PZ Cussons announced its intention to review its African business as part of a broader strategy to reduce risk and maximise shareholder value. The company has faced increasing difficulties in recent years due to Nigeria’s challenging macroeconomic environment, including currency devaluation and inflation.
The company also encountered a setback earlier this year when the Securities and Exchange Commission (SEC) rejected its proposal to delist from the Nigerian Stock Exchange.
PZ Cussons Nigeria reported a significant loss after tax of N76.02 billion in FY 2024, despite a 34% increase in revenue to N152.24 billion. This stark contrast from the previous year’s profit after tax of N14.35 billion highlights the ongoing difficulties the company is facing in its largest African market.
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