PZ Cussons has sold its stake in a Nigerian edible oils business for £51m as the London-listed personal care group makes progress on efforts to simplify the group.
However, in a trading update for the year ended 31 May 2025, the group also narrowed its profit outlook after being hit by an additional £2m of extended producer responsibility costs in the UK business.
In early 2024, the Imperial Leather and Carex owner unveiled plans to transform its portfolio following a strategic review, including evaluating options for its African business and also exploring the sale of tanning brand St Tropez.
PZ Cussons this morning said the agreement to sell its 50% equity interest in PZ Wilmar to joint venture partner Wilmar International for $70m (£51m) marked a “significant step” in the transformation.
The group will use the proceeds to reduce gross debt, materially improving its key credit and bank covenant metrics.
Formed in 2010 through a joint venture of PZ Cussons and Wilmar, PZ Wilmar is one of the largest palm oil businesses in Nigeria.
Its edible cooking oils, sold under the brand names Mamador and Devon King’s, hold market-leading positions.
The PZ Wilmar joint venture contributed £4.7m to group adjusted operating profit in the first half of the 2025 financial year and cashflow of £2.5m.
The transaction, which is expected to complete in the last quarter of this calendar year, will represent a profit on disposal, as well as a reduction in complexity for the group and less exposure to the risk and volatility of Nigeria and its currency, which has plagued PZ Cussons in recent years.
“I am delighted to announce the sale of our stake in PZ Wilmar to our joint venture partner,” said CEO Jonathan Myers. “In doing so, we are exiting a non-core category, reducing the risk associated with our presence in Nigeria, and materially strengthening our balance sheet.
“At the same time, the smooth transition of ownership offers continuity for colleagues and operations. I want to thank all our PZ Wilmar colleagues for the significant achievements since the inception of the JV in 2010, including the delivery of significant profit growth over this time. We wish the team continued success.”
PZ Cussons also this morning provided a trading update for the year ended 31 May 2025, with like-for-like revenue growth of 8% expected and total turnover of £505m.
The performance in the second half was driven by by continued strong revenue growth in Africa given the inflationary macro-economic environment in Nigeria.
Sales in Europe and the Americas was flat in the year, with “good growth” in the UK and Europe offsetting a double-digit decline in the St Tropez US business.
Group adjusted operating profits is forecast to be in the range of £52m to £55m, a narrowing from £52m to £58m stated previously. PZ Cussons blamed an additional £2m of EPR costs in the UK business and a softer St Tropez performance in the US for the shortfall in profits guidance.
“Having delivered a solid FY25 performance, our focus now is to continue transforming PZ Cussons into a business with stronger brands in a more focused portfolio, delivering sustainable profitable growth.”
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