Nigeria: Guinness Nigeria reports almost 300% increase in annual profit before tax

Guinness Nigeria Plc posted a profit before tax of ₦9.9 billion at the end of the 2018 financial year, the company’s results released by the Nigerian Stock Exchange have shown.

It was an almost 300 per cent increase year on year from the ₦2.6 billion recorded in 2017, the Premium Times reported on August 30.

The 2018 financial year which ended on 30 June also saw the company’s revenue increase by 14 per cent, from ₦125.92 billion in June 2017 to ₦142.98 billion.

Commenting on the results, Baker Magunda, Managing Director/CEO, Guinness Nigeria Plc, said the company delivered a strong performance in the financial year despite continued challenges in the operating environment.

“Revenue increased by 14 per cent as both beer and mainstream spirits’ net sales grew double-digit,” Mr Magunda said.

“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.”

Mr Magunda said the company’s gross margin, down four percent to 34 per cent during the year, was largely driven by ”inflationary pressure on raw material costs”.

“However, this was more than offset by reduced distribution and administration costs and resulted in operating margin improving 130bps. Marketing spend increased 18 per cent, ahead of revenue growth, as we continue to invest behind our brands.

“Improved operating performance combined with lower finance charges have helped us deliver an overall PAT increase of 249 per cent during year.”

The Guinness boss hailed the company’s strategy noting that it delivered both top line growth and margin expansion while also increasing investment behind their 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.”

Babatunde Savage, Chairman of the Board of Guinness Nigeria Plc, said the company would remain a major player in Nigeria 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,” Mr Savage said.

“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.”

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