An incontrovertible fact for Guinness Nigeria Plc last financial year was its ability to push profit margins northwards. Perhaps for prudence in the management of resources, the company bettered its margins by 4 percent from 13.86 percent to 17.02 percent within the 12 months of its operations in 2006.
The result is that management of the company was able to convert 17 kobo out of every one naira of turnover realised against the 13 kobo of the previous year which is very commendable, considering the prevailing high cost of doing business in the country.
Guinness, one of the leading beverage manufacturers in the country looks set to impress investors when they meet at the companyÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s AGM due in a few weeks.
The company accounts for DiageoÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s 13 percent total sales revenue which were 7.26 billion pounds sterling last financial year, Paul Walsh the companyÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s chief executive has said.
Here in Nigeria, the company seems to have recovered from its dull moments as its shares have continued to lead that segment of the market in recent times. Early May, the companyÃƒÆ’Ã†â€™Ãƒâ€šÃ‚Â¢ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¡Ãƒâ€šÃ‚Â¬ÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â€šÂ¬Ã…Â¾Ãƒâ€šÃ‚Â¢s shares gained over N8 in the market to close at N135.99 on a day investors exchanged about 5.924 million shares worth N759.97 million in 362 deals. Before then, the company had led the market previously with a gain of N21.99 to close at N142 per share. Investors capitalised on the price gains to make some money and force it to shed some of its gains.
One interesting thing which can be deduced from its fundamentals is that the company has significantly improved the quality of its assets as exemplified in the reduction in net interest costs. The pace for this development was set when in the third quarter, it radically reduced interest payments by 15 percent. Then, interest margin began to tilt towards the positive territory with a gain of over 15 percent.
Turnover rose 15 percent to N44.47 billion from N38.78 billion while trading profit surged slightly 17 percent to N9.62 billion from N8.23 billion. The company also took advantage of the buoyancy to control costs and advance profit before tax figures 33 percent to N10 billion from N7.56 billion. But management however attributed the achievements to good recovery of the beer industry where the company is enjoying the benefit of good brands.
Guinness full year results indicate that there was a 16 percent surge in turnover to N62 billion from N63.65 billion. This implies that more Nigerians consumed Guinness products within the year. It is not surprising as the company embarked on massive product promotion to expand market share. Trading profit also impressed at 16 percent but not as fast profit before tax which increased by 30 percent to N14.88 billion from N11.43 billion within the 12 months of the year. - BusinessDay