(Alliance News) - PZ Cussons PLC on Wednesday said it intends to sell its self-tanning brand, St Tropez, and review its African operations, as part of a strategic drive to improve shareholder returns.
Shares in PZ Cussons rose 3.9% to 98.30 pence in London early on Wednesday.
The Manchester, England-based consumer goods company owns brands such as Carex and Imperial Leather.
It said a strategic review had concluded that in addition to the challenges of its significant exposure to Nigeria, the group is "too complex" for its size, "with financial and human resources spread too thinly to generate consistent returns".
PZ Cussons said it while there remain long-term growth opportunities for St Tropez, these will be "harder to realise" under its ownership, given the need to allocate resources across a diverse geographic and category footprint.
"We therefore plan to realise shareholder value by initiating a process to sell the brand to an owner better placed to capture the brand's significant long-term potential," the company said.
PZ Cussons said "significant progress" had been made in strengthening and improving the performance of operations in Africa.
But it said "this is a complex group of assets" and is therefore evaluating the strategic options both to reduce risk and to maximise shareholder value.
Proceeds from any deals will initially be used to invest behind the organic growth of the business and to reduce gross debt further, PZ Cussons said.
The strategic update came alongside a trading update for the financial third quarter, which ended on March 2.
Revenue rose 6.4% on a like-for-like basis to GBP126.7 million, boosted by a 40% increase in Africa to GBP35.6 million. LFL revenue in Europe & the Americas eased 0.4% to GBP48.5 million and in Asia Pacific by 5.7% to GBP42.5 million.
PZ Cussons said that, at reported foreign exchange rates, revenue declined by around 24%, primarily as a result of the devaluation of the Nigerian naira, which was on average 60% lower in the quarter compared to a year prior.
Excluding Africa, LFL revenue declined 2.9%, an improved trend compared to the first half decline of 3.9%.
PZ Cussons expects to deliver adjusted operating profit in the region of GBP55 million to GBP60 million for the current financial year, unchanged from guidance provided in February alongside first-half results. This assumes no material adverse movements in the naira from current levels in the balance of the financial year, which runs to the end of May.
Adjusted operating profit for financial 2023 was GBP73.3 million.
By Jeremy Cutler, Alliance News reporter
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Pz Cussons (PZC)