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October 16, 2019

PZ Cussons ‘mulling options for Australian yogurt maker’

UK-based consumer-goods giant PZ Cussons is reportedly weighing up its options over the future of its Australian yogurt business Five:Am.

By Dean Best

UK-based consumer-goods giant PZ Cussons is reportedly weighing up its options over the future of its Australian yogurt business Five:Am.

The Australian Financial Review has reported PZ Cussons has hired KPMG to contact potential suitors for Five:Am, which the London-listed FMCG group acquired in 2014.

PZ Cussons could not be reached for immediate comment outside of normal office hours.

Organic yogurt maker Five:Am was sold to PZ Cussons in August 2014 for an initial sum of GBP44.1m (US$56.5m). At the time, PZ Cussons CEO Alex Kanellis described Five:Am as “an excellent fit” with the group’s existing presence in the “fast-growing core food and nutrition category”. The deal came a year after the home care-to-beauty products company had swooped to acquire Australian baby food business Rafferty’s Garden.

In PZ Cussons’ most recent financial year, which ran to 31 May, the company booked an impairment charge of GBP26.2m after reviewing the “future growth assumptions” for Five:Am and another for Nigerian dairy business Nutricima. Some GBP22.3m was related to Five:Am.

In PZ Cussons’ latest annual report, the company said Five:Am’s performance during the year had been “marginally lower in the year than that anticipated by management, with wider economic conditions and forecasted growth rates hardening in the year”.

The company said it had revisited its forecasts for Five:Am for the fiscal years 2020 to 2024 and “revised the forecasts accordingly based on the latest view of the market in which five:am operates, which is extremely fragmented and has high levels of  competition”.

In the annual report, PZ Cussons said it had also reviewed Rafferty’s Garden and concluded “not to impair, but noted the limited headroom”. The report added the company would “continue to monitor” the Nutricima, Five:Am and PZ Cussons operations to confirm that revised plans are being delivered and that no further impairment is required”.

The media report in Australia stating PZ Cussons is weighing up the future for Five:Am comes just days after the company completed the sale of Greece-based food subsidiary Minerva to Mirties Enterprises Company, a business controlled by Luxembourg-based Diorama Investments, a deal announced in August.

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