Imperial Leather maker PZ Cussons has said it will keep its troubled African business 18 months after putting it on the sale block and instead restructure the business for growth.
Manchester-headquartered PZ Cussons said while it had received “significant” interest from bidders for the Africa business, the offers failed to recognise the value of the portfolio.
It will now lead an overhaul of the division, including plans to offload further parts of the African arm, worth around £7 million, while putting in place financial measures to guard against future currency risks and volatility.
PZ Cussons said: “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.”
The group launched a review of its entire African business in April last year.
It had been looking to exit Nigeria after economic woes in the country saw extreme inflation and devaluation of the Nigerian naira, which pushed the firm to a loss of £95.9 million in the year to May 31 2024.
The group announced the sale last summer of its 50% stake in PZ Wilmar, one of the largest sustainable palm oil businesses in Nigeria, to joint venture partner Wilmar International for 70 million US dollars (£52.3 million), which is set to complete soon.
But PZ Cussons said recent trading in the wider division had improved, adding it believed there was a “significant long-term opportunity” in Africa, where the population is forecast to grow by more than 900 million over the next 25 years – over half the total population growth.
The firm said: “Nigeria’s population alone is forecast to increase by over 100 million, further benefiting from urbanisation and rapidly growing middle classes.
“Recent economic and currency trends have been more favourable, supporting strong, double-digit revenue growth in our Africa business in the first half of the financial year.”
The decision not to offload the African arm comes after PZ Cussons also ditched plans in June to sell its St Tropez self-tanning brand, more than a year after putting that on the sale block.
Jonathan Myers, chief executive of PZ Cussons, said: “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.
“Benefiting 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% of our revenue in Nigeria already coming from brands with number one or number two 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.”
