PZ Cussons FY25: solid LFL growth, tough FX, and decisive portfolio moves
PZ Cussons has posted a year of steady operational improvement wrapped in some chunky strategic calls. On the face of it, reported revenue slipped 2.7% to £513.8 million as currency headwinds bit, but like-for-like (LFL) sales grew 8.0% as pricing in Africa and better execution in the UK and Indonesia did the heavy lifting. Adjusted operating profit eased 5.8% to £54.9 million, while statutory operating profit swung to £20.6 million from a loss last year.
Two headlines matter most for shareholders: the planned sale of the 50% stake in PZ Wilmar for $70 million to de-risk Nigeria exposure and pay down debt, and the decision to keep St.Tropez with a new game plan and US distribution partner. The dividend is held flat at 3.60p with a proposed final of 2.10p.
Key FY25 numbers investors should know
| Metric | FY25 | FY24 | Change |
|---|---|---|---|
| Revenue | £513.8m | £527.9m | (2.7)% |
| LFL revenue growth | 8.0% | 4.4% | +360bps |
| Adjusted operating profit | £54.9m | £58.3m | (5.8)% |
| Adjusted operating margin | 10.7% | 11.0% | (30)bps |
| Statutory operating profit/(loss) | £20.6m | £(83.7)m | n.m. |
| Adjusted profit before tax | £41.1m | £44.7m | (8.1)% |
| Adjusted EPS | 7.34p | 8.02p | (8.5)% |
| Dividend per share | 3.60p | 3.60p | Flat |
| Free cash flow | £42.3m | £41.6m | +£0.7m |
| Gross debt | £157.1m | £166.6m | Improved |
| Net debt | £112.0m | £115.3m | Improved |
Quick jargon check: “LFL” strips out currency moves, disposals/acquisitions and calendar effects to show underlying sales momentum. “Adjusted” excludes one-offs like impairments to reflect trading performance.
What drove the year: FX masked genuine progress
Foreign exchange was the villain of the piece. Translating FY24 revenue at FY25 rates shaved an estimated £55.0 million off revenue, with the Nigerian Naira on average 38% weaker year-on-year. Strip out Africa and Group LFL was 0.3%, with volumes up 0.7% and price/mix down 0.4% – essentially stable.
- Europe & Americas: LFL up 0.6%. Adjusted operating profit rose 12.9% to £36.8 million with margin up 230bps to 18.5%, despite a new UK packaging tax (EPR) costing about £3 million. Sanctuary Spa performed well in gifting; Carex and Childs Farm benefited from IP tie-ups (Gruffalo/Zog and Bluey). St.Tropez, however, declined on US shelf-space reductions and fewer new products.
- Asia Pacific: LFL down 0.1%, but Indonesia accelerated with five consecutive quarters of growth; eCommerce doubled and now accounts for roughly 8% of the business. ANZ gained share in Morning Fresh, Radiant and Rafferty’s Garden even as categories softened. Segment margin slipped to 14.5% on weaker smaller Asian markets and normalising input costs in soap noodles.
- Africa: Reported revenue fell 7.1% on FX, but LFL leapt 34.9% on pricing. Volumes were down 12% after nearly 20 price rises to offset inflation above 30%. Route-to-market improvements expanded reach to 200,000 stores and doubled ‘Perfect Stores’ to 10,000.
Adjusted operating margin for the Group eased 30bps, but it actually rose 30bps if you exclude PZ Wilmar. That’s a useful tell: underlying margin work is paying off, helped by lower overheads from combining UK Personal Care and Beauty – annualised savings of about £3 million.
Big strategic moves: Wilmar exit and St.Tropez reset
Exiting edible oils to simplify and de-risk
In June, PZ Cussons agreed to sell its 50% stake in the Nigerian edible oils joint venture, PZ Wilmar, for $70 million. Net proceeds are expected to be around $64 million (£47 million) after costs. Completion is targeted for Q4 calendar 2025. The deal trims non-core exposure and should materially reduce leverage. For context, PZ Wilmar contributed £7.1 million to adjusted operating profit in FY25 (down from £10.7 million).
Keeping St.Tropez, with a new US go-to-market
After running a sale process, the Board chose to retain St.Tropez and chart a new course. The brand will be led by a focused, incentivised team, with a US reset via a partnership with The Emerson Group for customer management, logistics and activation. The plan aims to restore growth in the US after a tough year.
Africa portfolio still under review
The wider Africa review continues, covering Family Care in Nigeria, Ghana and Kenya, and the Nigeria Electricals unit. No decisions disclosed yet.
Cash, debt and dividend: balance sheet on the mend
Free cash flow was £42.3 million, slightly higher than last year, driven by better working capital. Net debt edged down to £112.0 million (from £115.3 million) and gross debt fell to £157.1 million. Headroom on the £325.0 million committed facility stood at £167.5 million.
The dividend is held at 3.60p, with a proposed final of 2.10p payable on 27 November 2025 to holders on 31 October 2025. For income investors, flat is respectable given FX volatility and the ongoing transformation.
Guidance and current trading: modest profit progress ex-Wilmar
- Current trading: To the end of September, Group LFL revenue growth is expected to be about 10%, led by Africa (+39%) and APAC (+7%). Europe & Americas is down 2% on tough comparatives and St.Tropez, but management expects that region to grow in H1.
- FY26 adjusted operating profit: guided at £48-53 million, excluding any profit contribution from PZ Wilmar prior to completion. For reference, FY25 adjusted operating profit excluding Wilmar was £47.8 million – so the guide implies small growth at the midpoint.
- Cost savings: £5-10 million in-year savings are baked into guidance, with a significant chunk to be reinvested behind brands, subject to returns.
- Net debt: expected to reduce “significantly” from £112.0 million on FY25 proceeds – c.£47 million from Wilmar plus £15-20 million from non-operating asset sales (about £8 million already received).
My take: strengths, watch-outs and why it matters
Three positives
- Execution is improving where it counts. The UK delivered better profits and APAC brands took share in a soft market. Underlying margin excluding Wilmar ticked up, showing the operating model changes are biting.
- Balance sheet strategy is sensible. Exiting PZ Wilmar simplifies the story and should de-risk Nigeria exposure while reducing leverage. Free cash flow is reliable.
- Clear innovation and activation pipeline. Centralised R&D, IP partnerships (Bluey, Gruffalo/Zog) and FY26 launches across Cussons Baby, Original Source and Morning Fresh are all tangible levers.
Three risks to monitor
- St.Tropez needs a turnaround. Management shows confidence, but FY25 saw double-digit revenue decline and the Beauty CGU took a £35.3 million goodwill impairment. Sensitivities in the valuation are tight.
- FX remains a swing factor. The Naira was more stable through FY25 but was still 38% weaker than last year on average. Africa growth is price-led, and FY25 volumes fell 12%.
- Topline outside Africa is subdued. Ex-Africa LFL was 0.3% with slight price/mix pressure. The innovation slate now needs to translate into volume growth.
Sustainability note: targets moving the right way
The Group reports carbon neutrality across operations, a 31% reduction in Scope 1-3 emissions versus a 2021 baseline, and 86.1% of packaging now recyclable, reusable or compostable. Good operational hygiene that should support retailer and consumer traction.
What to watch next
- Completion of the PZ Wilmar sale and the net debt step-down.
- Evidence of St.Tropez stabilising in the US under the Emerson partnership.
- FY26 launches – especially Original Source in the UK and Cussons Baby in Indonesia – converting into volume-led growth.
- Outcome of the wider Africa portfolio review.
Bottom line
Despite a messy FX backdrop, PZ Cussons is quietly getting fitter: better UK profitability, share gains in ANZ, a cleaner portfolio ahead, and steady cash generation. Guidance implies modest profit growth on a Wilmar-free basis and a healthier balance sheet after disposals. The dividend is steady. For me, execution on St.Tropez and continued currency stability in Nigeria are the two swing variables for FY26 sentiment.
