With a 20-year low, could this FTSE 250 stock be an investor’s dream?

I FTSE 250 may tend to be more flexible than its larger cousin, i FTSE 100but it can provide investors with great opportunities to earn more profits.

Best consumer products

There are not many companies that can boast of such a large number of market leading products in their portfolio. PZ Cussons (LSE: PZC) can, however. These include Imperial Leather, Original source, Carexagain Sanctuary Spa.

Despite being home to top companies, this is a company that has struggled to make itself relevant against much larger competitors, including Procter & Gamble again Unilever.

Since peaking at 400p in 2014, its share price has fallen ever since. Today, I can pick them up for 80p; an 80% drop.

But it is not the past that matters but the future.

Hyperinflation in Nigeria

Adding to the company’s woes has been the economic slowdown in Nigeria, one of its biggest markets. Hyperinflation and devaluation have left the Nigerian consumer struggling.

The depreciation of the local currency, the naira, was a major contributor to the 20% decline in revenue in FY24. The company found itself with too much local capital to repatriate, due to difficulty in accessing US dollars.

Often, an existential crisis forces a business to reevaluate its strategy and try to reinvent itself. PZ Cussons does just that. It has put in place measures that could lead to the partial or full sale of its African business.

Despite being able to trace its roots to Nigeria, the sale of its African business would be a good move, in my opinion. No business can expect to be successful when its profit and loss (P&L) account shows unusual fluctuations. That’s not the way to create long-term shareholder value, either.

Reviving its UK business

Another criticism I have had of PZ Cussons for some time is the complexity of its UK portfolio. A bloated organizational structure with multiple layers of management resulted in duplication throughout its supply chain.

Earlier this year, management decided to merge its Personal Care and Beauty divisions. Although it is too early to tell, the merger of the two businesses should provide significant cost savings.

But for me, cost savings is not enough. Apart from consolidation I want to see greater levels of commercial ingenuity and product innovation.

Another advantage it has over its competitors is its size. Being small should give it strength in a very competitive market. As the cost of living crisis continues, brand positioning will be the most important means of success.

To be honest, in the past year I have seen many of its top products like Carex again Original source taking prominent positions in supermarkets. But I’ve also seen a big push for its products in new places like discounters and pharmacies.

There is an undeniable risk of taking a position in a company whose share price has been declining for a long time. But it wouldn’t take much improvement for the feeling to change quickly. As it trades at levels not seen since the early 2000s, I have added many of its shares to my SIPP.