Manchester-based consumer goods manufacturer PZ Cussons has decided to retain its African business, more than 18 months after initially putting the division up for sale, and will instead restructure it for growth.
The company said it had received “significant” interest from potential buyers, but the offers failed to reflect the full value of the portfolio. Plans are now in place to overhaul the division, including the sale of further non-core assets worth around £7 million, alongside financial measures designed to mitigate currency risks and market volatility.
PZ Cussons stated: “The group received significant levels of interest from a number of parties regarding the wider Africa portfolio. The board has, however, concluded that the offers received did not reflect the inherent value of the business and that the greatest value for shareholders will be created by retaining the business.”
Jonathan Myers, chief executive of PZ Cussons, said: “Since embarking on the strategic review of Africa, we have identified or agreed the sale of non-core or surplus assets totalling over £70 million. This, combined with continued cash generation of the Group, has significantly strengthened our balance sheet. After a thorough review of the remainder of the Africa business and careful evaluation of the offers received, the Board believes it is in the best interest of our stakeholders to retain the business.
“Africa is a market of great opportunity. Given PZ Cussons’ deep heritage there, and given the strength of our brands and operational capabilities, we are well-placed to win over the longer term. Benefitting from a more stable economic environment in recent months and with positive fiscal reform, momentum in our Africa business is strong, with double-digit revenue growth in the first half of the financial year. We will now look to build on this strong performance and extend our category leadership, with nearly 80 per cent of our revenue in Nigeria already coming from brands with #1 or #2 positions. With plans underpinned by appropriate guardrails – established to reduce risk and manage volatility – we are confident that we have a business that is set up for success.”
