Multinational consumer goods giant PZ Cussons has initiated plans to sell its African subsidiaries to interested buyers, citing a drastic 70% devaluation of the Nigerian naira as a major factor.
In its preliminary results for the fiscal year ending May 31, 2024, the company revealed that it is exploring both partial and full sales to mitigate the financial impacts of currency fluctuations.
The announcement came alongside reports of operational progress over the past year, despite challenging macroeconomic conditions. The board noted that it has received multiple expressions of interest for its African business, highlighting the enduring value of its brands.
“Over the last 12 months, we have made continued operational progress and delivered against our strategic priorities, even amidst significant economic hurdles,” the company stated. PZ Cussons has been particularly affected by the naira’s devaluation, resulting in a staggering foreign exchange loss of £107.5 million related to USD-denominated liabilities in its Nigerian subsidiaries.
Despite these challenges, the company’s UK Personal Care segment has seen notable improvements, with profitable double-digit revenue growth. As the firm continues to navigate these complexities, it is also moving forward with plans to sell its St. Tropez brand.
CEO Jonathan Myers emphasized the need for a strategic review of the company’s brands and geographical focus to enhance shareholder value. The Nigerian subsidiary, which currently holds a 73.27% stake, has struggled financially, posting a loss of N94.78 billion in the third quarter of 2023/24, a stark contrast to the N11.213 billion gain in the same period the previous year.
PZ Cussons remains optimistic about its long-term potential, focusing on building a stronger, more competitive portfolio despite the ongoing economic difficulties in Nigeria.
The company’s closed period, which began on September 1, 2024, will remain in effect until the release of its unaudited financial statements for the first quarter ended August 31, 2024.
