PZ Cussons reports loss after naira devaluation in Nigeria

PZ Cussons reported a significant financial loss of £95.9 million for the year ending May 2024, a stark contrast to the £61.8 million profit recorded the previous year. The chief executive, Jonathan Myers, attributed this downturn to the devaluation of the Nigerian naira, which had profound effects on the company's financial statements. Despite these challenges, he emphasized the company's efforts to mitigate the impact while continuing to support Nigerian consumers facing severe inflation and economic hardships. In response to the financial difficulties, PZ Cussons' shares dropped by 7%, and the company reduced its annual dividend to shareholders by 44%, now standing at 3.6p. Earlier in the year, the firm had announced plans to explore the sale of its entire African business and put its tanning brand, St Tropez, on the market as part of a broader turnaround strategy. Myers noted that there has been interest in the African business, indicating potential for either a partial or full sale. Analyst Russ Mould highlighted that while there are signs of progress, including a reduction in debt, the company is facing increased sensitivity to the naira due to accounting changes related to the African unit's preparation for sale. This situation places additional pressure on Myers, who has been leading the company since 2020, to implement meaningful changes swiftly. The ongoing economic challenges in Nigeria, coupled with the company's strategic decisions, underscore the complexities PZ Cussons faces in navigating its financial landscape. The future of the company will depend on its ability to adapt to these circumstances and execute its divestment plans effectively.