PZ Cussons Faces Shareholder Backlash Over Transparency and Profitability Concerns
Investors Demand Accountability as Financial Troubles Deepen
PZ Cussons Plc is under increasing pressure from shareholders demanding greater transparency and a clear roadmap to profitability. This follows the company’s failed attempt to delist from the Nigerian Exchange Limited (NGX) and persistent financial struggles.
During PZ Cussons’ Facts Behind the Figures presentation at the NGX House in Lagos, investors criticized the company’s management for its poor financial performance, lack of transparency, and failure to pay dividends in recent years.
Failed Delisting Attempt and Shareholder Resistance
In September 2023, PZ Cussons (Holdings) Limited, the parent company and majority shareholder, announced plans to delist from the Nigerian stock market, offering minority shareholders N21 per share. However, investors rejected the offer, demanding N40 per share instead. The Securities and Exchange Commission (SEC) ultimately dismissed the delisting application after strong shareholder opposition.
Investors accused the parent company of attempting to undervalue their shares and failing to be transparent in its dealings.
Mounting Financial Challenges
PZ Cussons’ financial troubles escalated in February 2024 when it reported a dire financial position, with liabilities exceeding assets and a net loss of over N46 billion after tax in its Q2 2023/2024 results. Management attributed these struggles to government policies such as fuel subsidy removal and naira devaluation, which significantly increased operating costs.
Presenting the company’s half-year results for November 2024, PZ Cussons’ Chief Financial Officer, Oludare Ebenezer Elusakin, highlighted rising operational expenses, including a 43% surge in energy costs. The company operated under a volatile exchange rate between N1,601/$1 and N1,695/$1. Despite a 42% revenue increase to N96.5 billion, with gross profit up by 23% to N27 billion and operating profit before tax rising by 8% to N10.9 billion, shareholders remained unimpressed.
Investors Demand Urgent Reforms
Leading shareholder groups have called for immediate restructuring efforts:
• Patrick Ajudua, President of the New Dimension Shareholders, urged the company to restructure its foreign-denominated loans to mitigate exchange rate risks and negotiate extended repayment plans.
• Boniface Okezie, Chairman of the Progressive Shareholders Association of Nigeria (PSAN), criticized the company’s failure to pay dividends, insisting that management must align its strategies with shareholder interests.
The Road Ahead
With growing dissatisfaction, PZ Cussons’ management faces significant pressure to rebuild investor confidence. As the company marks 125 years of operations in Nigeria, shareholders insist that its commitment to staying in the market must be backed by concrete actions to restore profitability and ensure long-term sustainability.
Investors Demand Accountability as Financial Troubles Deepen
PZ Cussons Plc is under increasing pressure from shareholders demanding greater transparency and a clear roadmap to profitability. This follows the company’s failed attempt to delist from the Nigerian Exchange Limited (NGX) and persistent financial struggles.
During PZ Cussons’ Facts Behind the Figures presentation at the NGX House in Lagos, investors criticized the company’s management for its poor financial performance, lack of transparency, and failure to pay dividends in recent years.
Failed Delisting Attempt and Shareholder Resistance
In September 2023, PZ Cussons (Holdings) Limited, the parent company and majority shareholder, announced plans to delist from the Nigerian stock market, offering minority shareholders N21 per share. However, investors rejected the offer, demanding N40 per share instead. The Securities and Exchange Commission (SEC) ultimately dismissed the delisting application after strong shareholder opposition.
Investors accused the parent company of attempting to undervalue their shares and failing to be transparent in its dealings.
Mounting Financial Challenges
PZ Cussons’ financial troubles escalated in February 2024 when it reported a dire financial position, with liabilities exceeding assets and a net loss of over N46 billion after tax in its Q2 2023/2024 results. Management attributed these struggles to government policies such as fuel subsidy removal and naira devaluation, which significantly increased operating costs.
Presenting the company’s half-year results for November 2024, PZ Cussons’ Chief Financial Officer, Oludare Ebenezer Elusakin, highlighted rising operational expenses, including a 43% surge in energy costs. The company operated under a volatile exchange rate between N1,601/$1 and N1,695/$1. Despite a 42% revenue increase to N96.5 billion, with gross profit up by 23% to N27 billion and operating profit before tax rising by 8% to N10.9 billion, shareholders remained unimpressed.
Investors Demand Urgent Reforms
Leading shareholder groups have called for immediate restructuring efforts:
• Patrick Ajudua, President of the New Dimension Shareholders, urged the company to restructure its foreign-denominated loans to mitigate exchange rate risks and negotiate extended repayment plans.
• Boniface Okezie, Chairman of the Progressive Shareholders Association of Nigeria (PSAN), criticized the company’s failure to pay dividends, insisting that management must align its strategies with shareholder interests.
The Road Ahead
With growing dissatisfaction, PZ Cussons’ management faces significant pressure to rebuild investor confidence. As the company marks 125 years of operations in Nigeria, shareholders insist that its commitment to staying in the market must be backed by concrete actions to restore profitability and ensure long-term sustainability.