PZ Cussons to keep Africa business, sets out 'ambitious' growth plans

(Sharecast News) - Imperial Leather maker PZ Cussons set out "ambitious" growth plans for its Africa business on Thursday, having deciding to keep it after failing to receive offers that reflect its "inherent value". The company said in April last year that it was launching a strategic review of the Africa operations. As part of the review, it announced the sale of its 50% equity interest in PZ Wilmar Limited, its non-core edible oils business in Nigeria, to its joint venture partner Wilmar.

It said on Thursday: "The group received significant levels of interest from a number of parties regarding the wider Africa portfolio.

"The board has, however, concluded that the offers received did not reflect the inherent value of the business and that the greatest value for shareholders will be created by retaining the business and building a group portfolio balanced between its developed markets of UK and ANZ and its emerging markets of Indonesia and Nigeria."

Cussons said it was planning to build a "winning portfolio of locally-loved brands", building on the improved momentum achieved in recent years.

This will be delivered through three key pillars: core growth, category expansion and Pan-Africa growth.

Cussons said it plans to grow the core business in Nigeria, Kenya and Ghana through "consistently delivering best-in-class fundamentals of brand-building, distribution expansion, revenue growth management, in-store execution and use of digital".

It also plans to expand into new category adjacencies, including a focus on men's grooming and beauty, with the existing brands of Venus, Imperial Leather and Premier.

Finally, the company is looking to expand in other African markets, which will be served from its existing footprint in Nigeria and Kenya.

Cussons also said it has identified around £7m of further non-core assets in Africa, proceeds from which are expected to be realised during the current financial year.

Chief executive Jonathan Myers said: "Africa is a market of great opportunity. Given PZ Cussons' deep heritage there, and given the strength of our brands and operational capabilities, we are well-placed to win over the longer term. Benefitting from a more stable economic environment in recent months and with positive fiscal reform, momentum in our Africa business is strong, with double-digit revenue growth in the first half of the financial year.

"We will now look to build on this strong performance and extend our category leadership, with nearly 80% of our revenue in Nigeria already coming from brands with #1 or #2 positions. With plans underpinned by appropriate guardrails - established to reduce risk and manage volatility - we are confident that we have a business that is set up for success.

"We expect Africa to be a significant contributor to overall group revenue growth as we seek to build a winning portfolio of locally-loved brands, balanced between developed and emerging markets."