PZ Cussons: Shares jump after company announces restructuring
Shares in PZ Cussons rose over five per cent in early trade after it announced plans to offload its fake tan brand St Tropez and review its operations in Africa.
The company said following a strategic review, it has decided to refocus its portfolio on where the “business can be most competitive and where it can create most value for shareholders”.
The company said the fake tan brand grew significantly under its acquisition, which it made in 2010 for £62.5m.
However, said growth will be “harder to realise under PZ Cussons’ ownership, given the need to allocate resources across our diverse geographic and category footprint”.
PZ Cussons said that while performance at its African arm had improved, the board recognised that this is “a complex group of assets and is therefore evaluating the strategic options both to reduce risk and to maximise shareholder value”.
Its comes as the group revealed revenue plunged 23.7 per cent in the third quarter primarily as a result of the devaluation of the Nigerian Naira, which was on average 60 per cent lower in the quarter compared to the prior year period.
Jonathan Myers, chief executive officer, said: “We have made significant progress in strengthening PZ Cussons in recent years – building brands, restoring capabilities and re-energising and professionalising the organisation. Today we are re-iterating our FY24 outlook, having delivered improved LFL revenue growth in Q3 on an improved volume trend.
“Nevertheless, the macro-economic challenges and complexities associated with operating in Nigeria are significant and there is much more to do to unlock the full potential of the business.
“As such, we have undertaken a strategic review of our brands and geographies and have embarked on plans to transform our portfolio, refocusing on where the business can be most competitive.
He added: “The actions we are taking will crystallise value for our investors from assets better suited to alternative ownership structures.
“This will enable us to invest our resources in the key geographies and categories in which we can win and generate superior returns. We are transforming PZ Cussons into a business with stronger brands in a more focused portfolio, delivering sustainable profitable growth.”