Nigeria: Guinness Nigeria posts 30% increase in first-quarter revenue

Guinness Nigeria Plc has posted 30 per cent growth in revenue for the first quarter ended September 30, the News Agency of Nigeria reports.

The company in a result declared on the Nigerian Stock Exchange, NSE, on October 27, said that the revenue stood at N29.9 billion compared to N23.02 billion achieved in the comparative period of 2016.

The company’s gross profit during the period under review grew by 24 per cent as against pre-tax loss profit of N2.12 billion recorded in the comparative period of 2016.

It stated that the results reflected continued growth within the spirits (hot drinks) business and benefit of an expanding portfolio against the backdrop of lapping the inventory reduction in 2016.

The results released to the Nigerian Stock Exchange (NSE) also saw the company’s marketing expenses increase by 12 per cent, indicating continued investment behind its brands, while administrative expenses were reduced by 17 per cent driven by the organisation’s Productivity Agenda.

The company said that measures and strategies had been put in place to drive efficiency which would help position it for more sustainable growth.

Commenting on the first quarter results, Peter Ndegwa, the company’s Managing Director, said that expanding portfolio contributed to the increase in revenue.

Mr. Ndegwa said: “although trading conditions continue to be difficult, we delivered a credible performance with a Net Sales growth of 30 per cent for the quarter.”

“This was against the backdrop of changes in commercial footprint in 2016, as well as benefit of an expanding portfolio.

“We also continued to see value from our focus on productivity in areas like sales as we empower our teams for success on the frontline as well as driving efficiency in logistics,’’ Mr. Ndegwa said.

He added that the company would continue to expand its portfolio with the introduction of new brands.

“A critical part of our strategy is to expand our portfolio as we continue to innovate with the introduction of new brands and formats.

“Our spending on Advertising & Promotion is critical to driving growth not just for our innovation brands, but also for our core brands like Guinness and Malta Guinness,” he stated.

He said that the company’s rights issue concluded in August was 116 per cent subscribed.
“The funds raised from the rights issue will be used to reduce the level of borrowings and consequently our funding cost.

“In particular, we have used the funds to reduce our foreign currency loan by 60 per cent which in turn will reduce the foreign currency volatility on our balance sheet,” he said.

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