PZ Cussons narrows profit guidance and sells stake in Nigerian palm oil firm
The London-listed firm said its profit outlook has been impacted by £2 million of new packaging recycling costs under the so-called Extended Producer Responsibility (EPR) rules, as well falling sales of self-tanning St Tropez ranges in the US.
It is now guiding for underlying earnings of between £52 million and £55 million for the year to the end of May, with the top end being cut from the £58 million previously expected.
Shares fell 4% in trading on Wednesday.
PZ said the guidance update 'reflects the recognition in the fourth quarter of an additional £2 million Extended Producer Responsibility costs in our UK business, and the significant impact on group profitability as a result of the softer St Tropez US performance'.
'These factors were partly offset by cost management initiatives across the group.'
The group also announced the sale 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 (£51 million).
The group, which has been looking at a possible sale of its entire African business, said the move was a 'significant step in the portfolio transformation'.
It has been looking to exit Nigeria after economic woes in the country have seen 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.
On the PZ Wilmar sale Jonathan Myers, chief executive of PZ Cussons, said 'we are exiting a non-core category, reducing the risk associated with our presence in Nigeria, and materially strengthening our balance sheet'.
'Having delivered a solid full-year 2024-25 performance, our focus now is to continue transforming PZ Cussons into a business with stronger brands in a more focused portfolio, delivering sustainable profitable growth,' he added.
In its latest update, the group said it saw like-for-like sales grow 8% in the year to May 31, with reported revenues of around £505 million.
It said the UK saw 'good growth', which helped offset a double-digit decline in St Tropez in the US.
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