FTSE 250 movers: Cussons shines on St Tropez sale plan; Mitie slumps on placing
By Frank Prenesti
Date: Wednesday 24 Apr 2024
(Sharecast News) - FTSE 250 19,741.86 -0.29%
PZ Cussons said on Wednesday that it was planning to sell the St Tropez tanning brand and is reviewing its operations in Africa, as it backed its profit outlook for 2024.
The company said that following a strategic review, it has decided to refocus the portfolio "on where the business can be most competitive and where it can create most value for shareholders".
As far as the St Tropez brand is concerned, PZ Cussons said that while it has grown significantly since the acquisition, this growth will be harder to realise under its ownership, "given the need to allocate resources across our 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.
It also said that while it has made "significant" progress in strengthening and improving the performance of its operations in Africa, the assets there are "complex" and it is therefore "evaluating the strategic options both to reduce risk and to maximise shareholder value".
Proceeds from any transactions will initially be used to invest behind the organic growth of the business and to reduce gross debt further.
"The group will also have the potential and ambition to pursue targeted acquisitions which are highly complementary to its more focused category and geographic footprint," it added.
News of the plans came alongside a third-quarter trading update, in which PZ said trading was in line with expectations.
Group third-quarter like-for-like revenue grew 6.4% to £126.7m. However, at reported FX, revenue fell 23.7%, mainly due to the devaluation of the Nigerian Naira.
The company continues to expect to deliver adjusted operating profit of £55m to £60m for FY24.
Chief executive Jonathan Myers said: "We have made significant progress in strengthening PZ Cussons in recent years - building brands, restoring capabilities and re-energising and professionalising the organisation.
"Today we are re-iterating our FY24 outlook, having delivered improved LFL revenue growth in Q3 on an improved volume trend. Nevertheless, the macro-economic challenges and complexities associated with operating in Nigeria are significant and there is much more to do to unlock the full potential of the business.
"As such, we have undertaken a strategic review of our brands and geographies and have embarked on plans to transform our portfolio, refocusing on where the business can be most competitive. The actions we are taking will crystallise value for our investors from assets better suited to alternative ownership structures."
Wealth management firm Quilter saw shares rise on Wednesday after reporting that improving equity markets drove a strong performance in the first quarter.
Group assets under management and administration (AuMA) rose 5% over the three months to 31 March to £111.6bn. In fact, average AuMA for the first quarter was 6% head of the 2023 average, Quilter said.
"This reflected improved net inflows and higher equity markets, partially offset by rising bond yields in the quarter which reduced the market value of bond portfolios," the company explained.
Net inflows were £810m during the period, up from £409m in first quarter of 2023, with the Platform business seeing net inflows of more than £1bn - the highest level achieved in six years.
"We are pleased to report that our first quarter net flows are running at double the level experienced last year, reflecting the momentum in our business, actions we have taken and tentative signs of improving market sentiment," said chief executive Steven Levin.
Mitie shares slumped on Wednesday after investment fund Alchemy sold 40m shares in the outsourcing and energy services company in a placing.
The shares were sold by way of any accelerated bookbuild to institutional investors at 112p each, raising gross proceeds of about £44.8m.
Following completion of the placing, Alchemy will hold just over 31m shares in Mitie, which is a stake of around 2.33%.
Peel Hunt acted as sole global co-ordinator and bookrunner in connection with the placing.
Market Movers
FTSE 250 - Risers
PZ Cussons (PZC) 101.00p 6.77%
Darktrace (DARK) 510.40p 4.16%
RHI Magnesita N.V. (DI) (RHIM) 3,590.00p 3.61%
Fidelity China Special Situations (FCSS) 212.50p 2.91%
Morgan Advanced Materials (MGAM) 306.50p 2.68%
Dunelm Group (DNLM) 994.50p 2.58%
Quilter (QLT) 105.00p 2.44%
Syncona Limited NPV (SYNC) 127.00p 2.42%
Discoverie Group (DSCV) 728.00p 2.39%
Oxford Instruments (OXIG) 2,175.00p 2.35%
FTSE 250 - Fallers
Hammerson (HMSO) 26.74p -3.88%
Crest Nicholson Holdings (CRST) 184.30p -3.71%
Breedon Group (BREE) 366.50p -3.55%
Elementis (ELM) 138.00p -3.23%
Future (FUTR) 619.00p -3.05%
Safestore Holdings (SAFE) 751.50p -2.84%
Mitie Group (MTO) 116.80p -2.67%
Tritax Big Box Reit (BBOX) 147.00p -2.39%
Great Portland Estates (GPE) 390.00p -2.38%
Assura (AGR) 40.82p -2.34%
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