Guinness Nigeria Plc has released its results for its full fiscal year ended June 2018, delivering growth across the top and bottom line of its financials.
Specifically, the brewery company reported a 250 percent growth in its profit after tax of N6.72 billion as against N1.92 billion reported for the 2017 full year while revenue increased 14 percent from N125.9 billion in 2017 to N142.9billion in 2018.
To this end the company proposed a dividend of N1.84 kobo to shareholders, prompting a 5.6 percent increase in its share price which settled at N95 per share Thursday amidst N334.2 million worth of value transactions carried out among its shareholders.
Other highlights of the results showed operating profit increased by 31 percent to N13.4 billion, while finance costs declined 54 percent following the rights issue carried out last year to reduce foreign indebtedness.
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Commenting on the results, Baker Magunda, managing director/CEO, Guinness Nigeria Plc., said: “Over the year ending 30 June 2018, despite continued challenges in the operating environment, Guinness Nigeria delivered a strong performance. Revenue increased by 14 percent as both beer and mainstream spirits’ net sales grew double-digit.
“In beer, Guinness, our largest brand, saw strong growth as it benefitted from increased marketing activations around football. Mainstream spirits also delivered double-digit growth driven by innovation launches and new formats.”
He however noted that gross margin went down 4 percent to 34 percent largely driven by inflationary pressure on raw material costs, which was more than offset by reduced distribution and administration costs and resulted in operating margin improving 130 basis points.
Marketing spend also increased 18 percent, ahead of revenue growth as the company continued to invest behind its brands.
“The execution of our strategy is working as we delivered both top line growth and margin expansion while also increasing investment behind our brands. Looking forward, we will continue to focus on the three strategic pillars of productivity, expansion of our portfolio, as well as the execution of the commercial footprint initiatives to drive the business forward. Whilst we remain optimistic about the execution of our strategy, we note that the operating and competitive environment is likely to continue to be challenging in the 2019 financial year,” he added.
Babatunde Savage, chairman of the board of Guinness Nigeria Plc., said Guinness Nigeria has confidence in the Nigerian economy and will remain a major player in the country by continually investing, developing capacity and growing a portfolio that most suit the consumers’ needs for celebration and relaxation.
“Our aim is to continue to add value to Nigeria not only through continued investments in local manufacturing and backward integration but also through various Sustainable Development projects, enabling job opportunities and economic inclusion.”
“As a board, it is heartening to see the impact of the rights issue coming through in the profitability of the company. The Board is confident that we are making the right investments in the company to ensure our long-term competitiveness, and continues to support the management in its efforts to build a business that aims to consistently deliver growth for all stakeholders,” he said.
Frontpage December 11, 2019