Guinness Nigeria on Wednesday announced its half year results for the period ended December 31st, 2017.
The company delivered revenue of N70.6billion and gross profit of N24billion representing an increase of 19 per cent and 31per cent respectively over the same period last year.
The results showed topline growth driven by both spirits and beer reflecting the expansion of our portfolio, and improved operating margins with benefits from our productivity initiatives despite sustained cost pressures.
The results released to the Nigerian Stock Exchange (NSE), also saw marketing spend increase by 17per cent demonstrating sustained investment behind Guinness Nigeria’s brands. Administrative and distribution expenses declined driven by the company’s continuing focus on productivity.
Commenting on the half year results, Managing Director/CEO, Guinness Nigeria Plc, Peter Ndegwa, said, “In a difficult operating environment notwithstanding recent signs of economic recovery, we delivered a strong performance with net sales growth of 19per cent for the half with growth in spirits and benefits of an expanding portfolio and also against the backdrop of lapping inventory reduction from prior year”.
“We believe in the continued execution of our strategy, allowing us to navigate a tough environment characterized by down trading of consumers as disposable income is subjected to additional pressure. We have made significant progress in driving productivity especially in the supply chain and the commercial function, even though cost pressures and inflation takes its toll.”
He added, “In this half we have also continued to innovate with increased marketing spend across our portfolio to drive the growth on our core brands and to fund our expanding portfolio and innovation pipeline.”
On successful completion of the rights issue exercise where Guinness Nigeria received approval from its shareholders to raise N40billion from existing shareholders via a rights Issue offering five new shares for every 11 held, at 58 naira each, Ndegwa said, “The utilization of the rights issue proceeds leading to significant reduction of the Diageo loan and other borrowings, has resulted into a 32per cent reduction in the net finance charges and improved our debt to equity ratio from 82per cent to two per cent.”