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PZ Cussons has moved a step closer to selling off its troubled African business as the personal care group reveals sales and profits in the past year plummeted as it struggled with the massive devalution of Nigeria’s currency.
In April, the group unveiled a new plan to offload its holdings in Africa and also sell self-tanning brand St Tropez as part of an attempt to simplify its operations.
This morning, the company said the board had received a number of expressions of interest in the Africa business, which “could lead to a partial or full sale”.
Plans to flog St Tropez were also “progressing”, it added.
CEO Jonathan Myers said he remained confident in the the long-term potential for PZ Cussons as a business with “stronger brands in a more focused portfolio, delivering sustainable, profitable growth”.
Revenues at the group sank by 19.6% to £527.9m in the year ended 31 May 2024 as it dealt with a 70% devaluation of the Nigerian Naira.
Myers added that the business had “worked hard” to mitigate the impact of this on the group, while continuing to serve Nigerian consumers facing unprecedented inflation and economic difficulties.
Pre-tax profits plunged as a result, tumbling 39.7% to £44.7m.
Like-for-like growth also declined, falling from 6.1% in the prior year to 4.4% as prices were increased and volumes decreased. PZ Cussons said most of the growth was driven by higher prices in Nigeria to offset cost inflation. Excluding Africa, like-for-like revenue declined 2.6%.
However, Myers highlighted “significantly improved” trading in the UK personal care business as Carez returned to growth and Original Source, Imperial Leather and Childs Farm all enjoyed a year of double-digit revenue growth.
“The favourable trends of the second half of FY24 have continued into the new financial year,” Myers said. “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.”
PZ Cussons recored like-for-like growth of 4.7% in the start of the new financial year, driven by a strong performance in Africa, Europe and the Americas.
Shares plunged by 14% as markets reacted to the news.
Morning update
ONS inflation data
Inflation in the UK has remained flat at 2.2% in August, according to the latest official data released this morning.
A rise in air fares was offset by lower prices at the petrol pumps and a slow down in the rate at which restaurant prices are rising, the Office for National Statistics said.
Annual food and non-alcoholic drink inflation eased to 1.3% in the year to August, down from 1.5% in July.
Price fell the fastest for jams and marmalades and cheese, while olive oil, cocoa and powdered chocolate and lamb recorded the highest rises.
NIQ supermarket growth figures
Growth at supermarkets has slowed as shoppers reigned in spending after the summer holidays, according to the latest NIQ data for August.
Total till sales growth came in at 4% in the four weeks to 7 September, down from 5.5% in the previous month.
NIQ said the slowdown was likely due to cooler weather and a return to regular routines for shoppers after the summer break.
In terms of retailer performance over the past 12 weeks, Ocado (15.4%) remained the fastest growing retailer, followed by M&S (+12.4%), while Asda declined 5.5%.
Supermarket Income REIT full-year results
Rents at property investor Supermarket Income REIT have increased 12% to £113.1m in the year to 30 June 2024 thanks to a 4% average like-for-like rental uplift and further acquisitions.
Its portfolio valuation also rose 5% to £1.8bn.
The group has maintained 100% occupancy and 100% rent collection since its IPO in 2017, with Tesco and Sainsbury’s making up 75% of rental income.
Chairman Nick Hewson said: “The company’s operational performance has been resilient with 100% occupancy and 100% rent collection despite the broader market and macro-economic challenges of the past years.”
Eagle Eye Solutions Group annual results
Revenues at Eagle Eye Solutions Group have risen 11% to £47.7m in the year to 30 June thanks to new customer wins across the UK, North America and Australasia and expanding existing relationships with the likes fo tesco, Morrisons and Asda.
Adjusted EBITDA jumped 28% to £11.3m and the group moved from a pre-tax loss of £800k to a profit of £700k.
CEO Tim Mason said: “The wins secured at the end of the Year and into FY25 provide a strong basis for on-going growth.”
Morning share price movements
The FTSE 100 is down 0.2% to 8,292.49pts so far this morning.
Shares in PZ Cussons have crashed by 14% to 89p as markets opened. It puts the group down 41% in the year to date.
THG shares have plunged another 5.7% to 53.1p, compounding yesterday’s drop of 12%.
Early fmcg risers include Reckitt Benckiser, up 2.1% to 4,708p, and Nichols, up 1.5% to 1,106p.
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