PZ Cussons Cuts Profit Outlook, Sells Stake in Joint Venture with Wilmar International

UK-based PZ Cussons has cut its profit outlook and sold a stake in its PZ Wilmar joint venture. The move is part of a broader restructuring effort to address declining sales and profits in its food and beverages business. Wilmar International is a Singapore-based company engaged in food products, feed and industrial products, plantation and sugar milling, and other activities.

UK-based PZ Cussons PLC has announced significant changes in its financial outlook and operations, including the sale of its stake in a Nigerian joint venture and a reduction in its annual profit forecast. The move is part of a broader restructuring effort aimed at addressing declining sales and profits in its food and beverages business.

PZ Cussons, which owns brands such as Imperial Leather and St Tropez, has sold its 50% stake in Nigerian edible oils firm PZ Wilmar to joint-venture partner Wilmar International Ltd. for USD70 million [1]. The sale is expected to generate a profit on disposal and reduce the group's complexity and exposure to the risks and volatility of the Nigerian market.

The joint venture, formed in 2010, is one of the largest sustainable palm oil businesses in Nigeria. It contributed GBP4.7 million to group adjusted operating profit in the half-year to November 30. The sale of the stake is part of PZ Cussons' strategy to focus on its core businesses and improve profitability.

PZ Cussons has also trimmed the top end of its annual profit outlook. The company now expects annual adjusted operating profit between GBP52 million and GBP55 million, down from the previously expected GBP58 million. This adjustment reflects the softer performance of the St Tropez US business and additional costs booked under the extended producer responsibility rule in its UK business.

The firm reported that performance in the second half of the year was driven by continued strong revenue growth in Africa, particularly Nigeria, despite the inflationary macro-economic environment. Revenue growth in APAC, particularly Indonesia, also contributed positively. However, revenue in ANZ declined in a soft market, and revenue in Europe and the Americas was flat, with good growth in the UK and Europe offsetting a double-digit decline in the St Tropez US business.

PZ Cussons shares were 1.9% higher at 80 pence each in London on Wednesday morning, reflecting investor confidence in the company's restructuring efforts.

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[1] https://www.marketscreener.com/quote/stock/PZ-CUSSONS-PLC-9590103/news/PZ-Cussons-sells-stake-in-Nigeria-joint-venture-narrows-profit-view-50272167/