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Indeed this is what I don't understand either - Not really familiar with the financials but how much would they have to write down if they just simply left the corrupt state and sold it to whoever? Instead they are trying to buy out existing minority shareholders. The only way they can recover is if the price of oil rockets as Nigeria tends to spend like there's no tomorrow when oil surpluses are good
Wouldn't think there's enough cash flow to interest PE. The company excludes corporation tax payments from their definition of free cash flow - wasn't aware those payments were discretionary!
I know the company has been in Nigeria a long time, but should/could they exit? That would leave a far more focused and appealing business for investors.
"Could be a Private Equity target"
I hope not and as a shareholder I would vote against any takeover advances. Despite current headwinds, I think PZC has a lot of growth potential - much more than a bigger company such as Unilever.
Not easy reading. I know the shares are tightly held by PZ family but I'm a little surprised this company has never attracted interest from Unilever or a PG type
Rns will be very poor if you're not already aware of this, previously reported 256m cash which around 106m is actually recoverable , net assets will be significantly down so it's possible the sp could fall sharply which may create a buying opportunity. Hopefully going forward PZ could actually fix this Nigeria issue and have no further cash accumulating there whilst having to borrow over here in GBP.
I just noticed that Nigerian Nira has been falling against £ of the past 4 days. This could also explain the share price fall. One definitely for the long term. Could be a Private Equity target.
Thanks for that. Had no idea interim is due. Topped up a bit into the weakness this morning. Unilever share price has been doing well during the past fortnight. My logic was, no reason why PZC shouldn't.
Drifting down before the interim results
PZC have posted some nice updates explaining their business and strategy on their IR site. Mgt are focused and delivering. Decent team in my opinion.
Yes, the AGM update on Nigeria was very positive. They are able to repatriate some funds and hope that at end 2024 the cash balances in the country will be minimal.
Looks like s after yesterday report the problem s in Nigeria are stabilising
Forever is a long time in business… they will almost certainly be able to get their money out of Nigeria at some point. The population of Nigeria is growing at a pace. 370m by 2050 from 220m now. So it does also offer opportunities.
I fully acknowledge that borrowing GBP in the UK vs a cash balance of Nairu is nuts.
Its a fair point but the business is not viable if around 100m per year becomes trapped in Nigeria. When the business makes around 50m profit as long as they can't get their money out of Nigeria it doesn't matter what they make in Nigeria because it stays there. Even if they spent it all in Nigeria on assets that yield whatever is yielded stays in Nigeria , Whilst debt is amassed outside of Nigeria that cannot be paid.
I'm no expert but surely always has to be a positive to a negative, if the money is in Nigeria and currently devalued then maybe its time to invest some of it back into business opportunities that may arise in the region if the current currency devaluation creates such opportunities. What ever way you look at it Africa will be a very big future area for growth.
256m cash CE, 204m stuck in Nigeria ( was 113m FY 22),
204 m now worth 123m due to Nira devaluation. Its still unknown if the policy change will allow withdrawal of money from Nigeria, if policy change does allow withdrawal, we will see no further accumulation of money in Nigeria and Cussons will withdraw all money stuck in Nigeria, if not Cussons is in major trouble, its solution of band aid borrowing is not viable multi year .
I think sub 100p is certain potentially sub 70p
Https://www.thisismoney.co.uk/money/investing/article-12578243/MIDAS-SHARE-TIPS-Imperial-Leather-maker-PZ-Cussons-clean-up.html?ico=mol_desktop_money-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.co.uk%2Fmoney%2Findex.html&_ga=2.188605420.596031846.1696108238-829466088.1679172563&_gl=1*i5by6w*_ga*ODI5NDY2MDg4LjE2NzkxNzI1NjM.*_ga_XE0XLFFF16*MTY5NjEwODIzNy4zMy4xLjE2OTYxMDgyNDQuMC4wLjA.
Nigeria is two countries… the northern Sahel is a world away from the growing metropoli of the south
War could be coming with Nigerian forces invading Niger.
No
SP @184p now - 52 week low. Looks like cost conscious shoppers are taking a step down to cheaper own brand products. This is hitting PZC and other major brands. Will 180p hold ?
Sold out awhile ago £2.20 when they were still warning on inflation effects and the pe rate they was on was high so I guess this the result today but not buying back in.
Enough said.
Interim Results in RNS. SP down today 8% to 196 as I type. No rise in divvi.
ii's Scholar explained: "PZ Cussons has been struggling with cost inflation, a weakening consumer and higher net debt. Although it has been raising prices, customers are increasingly price sensitive given the cost-of-living squeeze on household budgets."
Update: Yep it certainly was worth a punt. LSE numbers not correct but SP is now at 217p.
Update: Not impressed. SP struggling to hold up now. 180p may be threatened. Poor 2021/2022 compared to general market. However, seems cheap and worth a punt at these levels.