SEMAFOR
British consumer goods company PZ Cussons may sell its Africa operations, citing adverse economic conditions on the continent, particularly in its largest market Nigeria.
PZ’s group revenue for the three months to March 2 — which it defines as the third quarter of its financial year — fell by 23.7% “primarily as a result of the devaluation of the Nigerian naira,” the company said last week. Its Africa business, despite raising product prices to account for inflation, saw its revenue halved during the period. It was a much steeper decline than was recorded in its other markets in Europe and Americas, and the Asia-Pacific, at -1.4% and -10.7% respectively.
The company said it has carried out “a strategic review of our brands and geographies” to focus on where it can be most competitive. In particular, PZ’s board described its Africa operations as “a complex group of assets” and is “evaluating the strategic options both to reduce risk and to maximise shareholder value.” It could lead to an outright sale, with CEO Jonathan Myers saying “nothing is ruled out.”
Last year, PZ said it would delist its Nigeria subsidiary from the stock exchange by paying £23 million ($29 million) to buy a 27% stake held by the public. But Nigeria’s securities and exchange regulator barred the buyout move this March, to the delight of Nigerian shareholders who wanted a higher offer for their stock.
PZ’s Africa operations include outposts in Ghana and East Africa, but Nigeria is its “largest and most diverse single market,” according to the company. Its products in Nigeria, where it has operated for over 120 years, range from skincare and sanitary products, like Imperial Leather and Morning Fresh dishwashing liquid, to food items such as Mamador cooking oil.
