Following the foreign exchange crisis that has plagued Nigeria for a long time, consumer goods company, PZ Cussons, has disclosed a planned sell-off of its African subsidiaries to any interested buyer.
The parent company of PZ Cussons Nigeria said it was considering a partial or full sale to mitigate the company’s exposure to fluctuations in the naira, which has devalued by 70 per cent.
The company stated this in a document on its financial results for the year ended May 31, 2024.
The statement signed by the company’s chief executive officer, Mr Jonathan Myers, said: “Over the last twelve months, we have made continued operational progress and delivered against the strategic priorities set out at the start of the year, against the backdrop of macro-economic challenges. At the same time, we have taken the important first steps to transform our business and maximise shareholder value, by refocusing our portfolio on where we can be most competitive.
“The period was marked by a 70% devaluation of the Nigerian naira, which has had significant implications on our reported financials. We have worked hard to mitigate the impact of this on the Group, while continuing to serve Nigerian consumers who are facing unprecedented inflation and economic difficulties. Elsewhere, we significantly improved trading in our UK Personal Care business as we returned Carex to growth, maintained our momentum in ANZ, delivered a return to volume-led revenue growth in Indonesia in Q4 and led Childs Farm to a year of profitable, double-digit revenue growth.
“The favourable trends of the second half of FY24 have continued into the new financial year. 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, which could lead to a partial or full sale.
“Against this backdrop, we remain confident in the long-term potential for PZ Cussons as a business with stronger brands in a more focused portfolio, delivering sustainable, profitable growth.”
The company noted that the devaluation of the Nigerian currency during the 2024 financial year has had a significant impact on PZ Cussons’ financial results.
The value of the naira versus the pound sterling was, on average, 57% lower during the period in review compared to financial year 2023, contributing to a year-on-year reduction in revenue, earnings and cash.
It said the board had received multiple interests in the sale of its African business.
Commenting on the impact of the naira devaluation, PZ Cussons said a foreign exchange loss of £107.5 million “primarily arose from the translation and settlement of United States dollar-denominated liabilities in our Nigerian subsidiaries and is wholly the result of the devaluation of the Naira, which fell by 70% from 31 May 2023 to 31 May 2024”.
Commenting on the impact of the naira devaluation, PZ Cussons said a foreign exchange loss of £107.5m “primarily arose from the translation and settlement of USD denominated liabilities in our Nigerian subsidiaries and is wholly the result of the devaluation of the naira, which fell by 70 per cent from May 31, 2023 to May 31, 2024.”
Recall that Myers had in April said the company was reviewing its brands and geographies over macroeconomic challenges and complexities in Nigeria.
