PZ Cussons, a global consumer goods company, has announced that it is exploring the sale of its African subsidiaries due to the economic challenges posed by the devaluation of Nigeria’s naira. The company, which operates in several African markets including Nigeria, said it is open to a partial or full sale of its African assets in a bid to reduce its exposure to the naira’s volatility.
In its preliminary financial report for the year ending May 31, 2024, PZ Cussons disclosed that the naira had lost 70% of its value, significantly impacting the company’s financial performance in Nigeria. As a result, the board has received multiple expressions of interest from potential buyers for its African businesses, recognizing the value of the company’s established brands across the continent.
“Over the last 12 months, we have made operational progress and delivered on our strategic goals despite macroeconomic headwinds,” the company stated. “The 70% devaluation of the naira has had a significant effect on our financial results. We are working hard to mitigate this impact while continuing to serve Nigerian consumers facing unprecedented inflation and economic hardship.”
Despite challenges in Nigeria, PZ Cussons reported strong performance in its UK Personal Care business, with double-digit revenue growth for the year. This growth contrasts with the company’s losses in Nigeria, where its subsidiary, PZ Cussons Nigeria Plc, recorded a ₦94.78 billion loss in Q3 2023/24. This follows a ₦74.14 billion loss in Q2, driven largely by naira depreciation.
In April, PZ Cussons CEO Jonathan Myers mentioned that the company was reviewing its brands and geographical focus due to the complex economic situation in Nigeria. This review came shortly after the Securities and Exchange Commission rejected the company’s request to acquire the shares of minority shareholders in its Nigerian subsidiary, PZ Cussons Nigeria Limited.
In September 2023, PZ Cussons expressed interest in purchasing the remaining 26.73% minority shares of its Nigerian unit at ₦21 per share. As of May 31, PZ Cussons held a 73.27% stake in the subsidiary, representing 2.90 billion shares valued at ₦45.53 billion as of September 18.a
The company also reported a foreign exchange loss of £107.5 million due to the naira’s devaluation, which led to substantial losses in its Nigerian operations. Despite these setbacks, PZ Cussons remains optimistic about its long-term prospects, stating that it aims to streamline its portfolio to focus on stronger brands and sustainable, profitable growth.
The company is also progressing with plans to sell its UK-based St. Tropez brand, further aligning with its strategy of refocusing on core markets.
In another notice posted on the Nigerian exchange website, the company stated, “Please note that the company’s closed period, which commenced on September 1, 2024, will remain in effect until 24 hours after the release of the Unaudited Financial Statements for the first quarter ended 31 August 2024, to the market.” Punch
