PZ Cussons Nigeria saw a 19.94% decline in share price over the last two trading sessions; at the close, the share price was N30.80.
As a result, on May 7, 2024, the market capitalization was N122.290 billion, down from N150.878 billion.
The setback:
According to checks conducted by The News Chronicles, the stock of personal and household products fell by 10% to settle at N34.20 a share, down from N38.00, the opening price before to the start of trading on May 8.
Additionally, the company’s share fell 9.94% to finish at N30.80 on May 9, 2024, from N34.20 when it opened for trading, bringing the total fall to 19.94%.
Subsequent investigations showed that PZ Cussons Nigeria posted a loss of N28.587 billion for the two days of trading, ending at N122.290 billion in market capitalization on the Nigerian Exchange (NGX) as opposed to N150.878 billion at the start of trade on May 7.
PZ Cussons’ share price was N26.70 at the start of the year, and it has subsequently increased by 15.4%.
Financial outcomes
The third quarter of the fiscal year 2023–2024 had a reported loss of N94.78 billion for PZ Cussons Nigeria Plc, compared to a gain of N11.213 billion during the same period in 2022, indicating the company’s ongoing struggles.
According to the company’s unaudited interim financial accounts for Q3 2023/24, which ended on February 29, 2024, and were submitted to the Nigerian Exchange, revenue increased by 27% to N110.63 billion from N86.99 billion in Q3 2022.
PZ Cussons supplied an explanation note along with the notification of the Extraordinary General Meeting that was published earlier this year. It blamed the naira’s depreciation for its negative net asset position.
The News Chronicles reported that PZ Cussons Nigeria’s bid to delist from the NGX struck the rocks when the Securities and Exchange Commission (SEC) refused the company’s request for its principal shareholder, PZ Cussons Holdings, to buy out other owners.
PZ Cussons (Holding) planned to purchase the shares owned by other PZ Cussons Nigeria stockholders at a price of N23 per share, as per a corporate statement obtained by Nairametrics.
The corporation requested “No Objection” from the SEC over this action, but it was denied.
Shareholders respond:
The company’s reported drop in share prices can be linked to investors’ pessimistic sentiment, which sparked sell-offs that reduced the company’s worth. Investor trust is declining as a result of its recent moves intended to withdraw from Nigeria.
In an exclusive interview with Nairametrics, Mr. Patrick Ajudua, President of the New Dimension Shareholders Association of Nigeria, shared his thoughts on the latest events.
He emphasized his fear that investor trust has been negatively harmed by PZ Cussons Nigeria’s recent decision to depart the Nigerian market. The company’s decision to hire a third party to take over its operations exacerbates this worry. As a result, investors believe that the future of their investments may be threatened.
“The problem is that PZ Cussons Nigeria has lost the trust of investors with its recent steps to leave Nigeria and the choice to have a third party take over from them.”
“Investors feel that their investment prospects are endangered with these,” he stated.
