Key Takeaways
- PZ Cussons will sell its 50% stake in Nigerian joint venture PZ Wilmar to Wilmar International for $70 million.
- The sale is part of a restructuring effort, with net proceeds expected to be around $64 million.
- Company forecasts a revenue increase of 8% but has adjusted its profit guidance due to weak US performance.
Transaction Overview
PZ Cussons has entered into an agreement to divest its 50% equity stake in PZ Wilmar, a joint venture with Wilmar International, for $70 million. The completion of this transaction is projected for the final quarter of 2025, pending regulatory approvals. After accounting for taxes and fees, the net proceeds are anticipated to be approximately $64 million.
The joint venture, established in 2010, significantly contributed to PZ Cussons’ financial performance by adding £4.7 million to the Group’s adjusted operating profit in the first half of FY25. This divestment aligns with a portfolio review initiated in 2024, reflecting PZ Cussons’ strategic restructuring.
Financial Performance Update
In its FY25 trading update, PZ Cussons reported an 8% like-for-like revenue growth, bringing total revenue projections to around £505 million. Growth in African and Indonesian markets was notable; however, it was offset by declines in Australia and New Zealand, along with stagnant performance in Europe and the Americas. The company specifically noted a significant double-digit revenue drop for its St. Tropez brand in the U.S. market.
Consequently, PZ Cussons has narrowed its adjusted operating profit guidance to a range of £52 million to £55 million. This update reflects challenges in the U.S. beauty market alongside an additional £2 million in Extended Producer Responsibility costs incurred in the UK. The company’s gross debt at year-end is expected to reach £158 million, or £111 million on a pro forma basis when factoring in the proceeds from the Wilmar sale.
Implications of the Sale
The decision to sell PZ Wilmar is a strategic move aimed at reducing PZ Cussons’ exposure to the Nigerian market while simplifying its overall business structure. The lowered profit guidance highlights the ongoing challenges the company faces, particularly due to regulatory costs and softer trading conditions in the U.S. beauty sector.
The full-year results for FY25 are anticipated to be released in September 2025, providing further insights into the company’s financial health post-transaction. Overall, this divestment strategy appears focused on enhancing operational efficiency and financial stability within the company’s broader restructuring efforts.
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