PZ Cussons To Sell Subsidiaries In Nigeria And Other Items

Due to currency difficulties, PZ Cussons announced it has started planning to sell its African businesses to any interested bidder.

This was mentioned in the business’s preliminary results for the year that ended on May 31, 2024, which were posted on their website.

The parent company of PZ Cussons Nigeria announced that, in light of the findings, it is considering a partial or complete sale in order to reduce the company’s vulnerability to swings in the naira, which has experienced a 70% devaluation.

“Against the backdrop of macroeconomic challenges, we have delivered against the strategic priorities set out at the beginning of the year and made continued operational progress over the last 12 months,” the document stated.

“At the same time, by focusing our portfolio on areas where we can be most competitive, we have made the crucial initial steps toward transforming our business and maximizing shareholder value.

“The Nigerian naira depreciated by 70% during that time, which had a big impact on our financial statements that we released. We have made great efforts to lessen the effects of this on the company while still providing services to Nigerian customers who are struggling with unheard-of levels of inflation and financial hardship.

Regarding subsidiary sales, the company reported that it has had “a number of expressions of interest for our African business,” indicating that potential buyers are aware of the strength of its brands and may pursue a partial or complete sale.

“The new fiscal year has seen the continuation of the positive trends from the second part of FY24.

Our preparations to sell St. Tropez are moving forward, and we’ve had a lot of interest shown in our African business, our people, and our trademarks. This could result in a partial or whole sale.

In light of this, PZ Cussons stated, “We are optimistic about the company’s long-term potential as a stronger brand in a more focused portfolio, delivering sustainable, profitable growth.”

PZ Cussons discussed the effects of the devaluation of the naira, stating that a foreign exchange loss of £107.5 million was ‘wholly the result of the devaluation of the naira, which fell by 70 per cent from May 31, 2023, to May 31, 2024′ and primarily arose from the translation and settlement of USD denominated liabilities in our Nigerian subsidiaries’.

However, it did point out that its UK Personal Care division has seen a notable improvement in revenue, with double-digit growth in revenue for the past year.

At ₦21 per unit, PZ Cussons announced in September 2023 that it has expressed interest in purchasing the remaining 26.73 percent minority interests in its Nigerian business.

PZ Cussons owns 73.27 percent of the Nigerian subsidiary as of May 31, or 2.90 billion shares, valued at ₦45.53 billion as of September 18.

“PZ Cussons Nigeria Plc, the company’s Nigerian affiliate, has been struggling; in the third quarter of 2023–2024, it reported a ₦94.78 billion loss as opposed to a ₦11.213 billion gain during the same time in 2022.

“The company’s Q2 loss was ₦74.14 billion. Due to naira depreciation, PZ Cusson‘s liabilities exceeded its assets by N46.420 billion, maintaining the company’s negative net asset position, the report stated.