In its preliminary results published on its website for the year ended May 31, 2024, the parent company of PZ Cussons Nigeria said the decision is aimed to mitigate the company’s exposure to fluctuations in the naira, which has devalued by 70 per cent.

The company said: “Over the last 12 months, we have made continued operational progress and delivered against the strategic priorities set out at the start of the year, against the backdrop of macro-economic challenges.

“At the same time, we have taken the important first steps to transform our business and maximise shareholder value, by refocusing our portfolio on where we can be most competitive.

“The period was marked by a 70 per cent devaluation of the Nigerian naira, which has had significant implications on our reported financials. We have worked hard to mitigate the impact of this on the group, while continuing to serve Nigerian consumers who are facing unprecedented inflation and economic difficulties.”

The company said it has received a number of expressions of interest for its African business which recognises the potential of its brands and could lead to a partial or full sale.

The statement added: “The favourable trends of the second half of FY24 have continued into the new financial year. We are progressing with our plans to sell St. Tropez and have received a number of expressions of interest for our African business, the potential of our brands and people, which could lead to a partial or full sale.

“Against this backdrop, we remain confident in the long-term potential for PZ Cussons as a business with stronger brands in a more focused portfolio, delivering sustainable, profitable growth.

On the impact of the naira devaluation, PZ Cussons said a foreign exchange loss of £107.5m primarily arose from the translation and settlement of USD denominated liabilities in our Nigerian subsidiaries and is wholly the result of the devaluation of the naira, which fell by 70 per cent from May 31, 2023 to May 31, 2024.

The company, however, stated that revenue in its UK Personal Care business has significantly improved to a year of profitable, double-digit revenue growth.

Channels Television reports that in September 2023, PZ Cussons said it had shown interest in buying the remaining 26.73 per cent minority shares in its Nigerian subsidiary, at a price of ₦21 per unit.

As of May 31, PZ Cussons holds a 73.27 per cent stake in the Nigerian subsidiary, which represents 2.90bn shares, worth ₦45.53bn as of September 18.

“The Nigerian subsidiary of the company, PZ Cussons Nigeria Plc has continued to struggle, as it posted a ₦94.78bn loss in the third quarter of 2023/24 compared to the ₦11.213bn gain it had in the corresponding period in 2022.

“The firm suffered a ₦74.14bn loss in Q2. PZ Cusson remained in a negative net asset position, as liabilities surpassed assets by N46.420bn on the back of naira depreciation,” the report said.