PZ Cussons, the company behind Carex, Imperial Leather, and Original Source, has reported a significant financial downturn due to the precipitous 70 per cent devaluation of the Nigerian Naira. The Manchester-based company, listed on the London Stock Exchange, has disclosed substantial losses, marking a stark contrast to the previous year’s profitability.
For the fiscal year ending 31 May 2024, PZ Cussons revealed a revenue of £527.9m, a decline of 19.6 per cent compared to the prior year. Additionally, the company registered a pre-tax loss of £95.9m, a sharp decline from the £61.8m profit reported the year before. In a statement to the London Stock Exchange, PZ Cussons attributed this downturn to the devaluation of the Nigerian Naira, noting it had a ‘significant impact’ on its financial results.
Following the release of these results, PZ Cussons’ shares plummeted nearly seven per cent, reaching their lowest level since April. Furthermore, the company announced a 44 per cent reduction in its dividend to 2.1p per share, down from the previous year’s 3.73p payout.
Despite these challenges, Chief Executive Jonathan Myers commented on the company’s strategic progress and operational achievements over the past year. ‘Over the last 12 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,’ Myers stated. ‘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.’
Myers further elaborated on the hurdles posed by the Nigerian Naira’s devaluation. ‘The period was marked by a 70 per cent 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.’
Additionally, Myers highlighted other areas of improvement within the company’s operations. ‘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.’
In terms of future plans, Myers indicated ongoing efforts to sell St. Tropez and the potential for a partial or full sale of their African business, illustrating a broader strategy to streamline their portfolio and focus on high-potential areas. ‘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.’
Despite the financial setbacks, Myers remains optimistic about the long-term prospects of PZ Cussons. ‘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,’ he concluded.
In summary, PZ Cussons has faced notable financial challenges due to the significant devaluation of the Nigerian Naira, impacting its revenue and profitability. However, through strategic refocusing and operational improvements, the company aims to navigate these difficulties and pursue sustainable growth in the long term.