Analyst Expectations Ahead of GUINNESS Q1 2019 Results For The Period Ended 30 Sep 2018


Thursday, October 25, 2018 / 07:35 PM / Proshare  Research


Guinness Nigeria Plc is expected to release its Q1 2019 results for the period ended 30th Sept, 2018 anytime soon. (See Q4 2018 results here - GUINNESS Declares N6.72bn PAT in Q4 2018 Results,(SP:N90.00k))


Analysts are of the view that the new financial year commenced by the brewing company might be a challenging one considering the introduction of the new excise duties announced by the government. There is also the impact and level of competition in the industry which result in a drop in volumes; for which the market is keen on seeing how players fare.


These are some of the issues expected to impact on its top line which might result in limited growth figures (Y-o-Y) further heightened by the inability to deploy price increases on account of the increased competition witnessed in the sector during the period under review as well as the implementation of the new excise duties regime.


Find below the review of expectations.


Market Analysts Expectations on GUINNESS

Analyst firm




Cardinal Stone

 A holistic view of GUINNESS FY’18 financial scorecard gets the nod from us. We welcome the development of the healthy balance sheet of the company, even as total borrowings declined by 60.1% YoY to N13.7 billion.

We note the slowdown in revenue growth in Q4’18, as sales grew by a meagre 4.0% YoY (vs. Q1’18, Q2’18 and Q3’18 growth of 29.9% YoY, 11.5% YoY and 15.0% YoY accordingly). In our opinion, the brewer likely hiked prices in the quarter, which coincided with the new excise duty rates which kicked off in June. We believe the increase in prices might have pressured volumes growth, particularly in the mainstream beer segment which has been a driver of growth in the past quarters.

Given the introduction of the new excise duties rates amidst still weak consumer wallets, we are of the opinion that the company might start the new financial year on a rocky note. In its Q4’18 figures, we observed intense rivalry which resulted to drop in volumes, amidst higher pricing. It is our view that GUINNESS has to be more intentional on direct cost savings to drive earnings in the coming quarters, as we expect tougher competition in the brewery space particularly among mainstream lager products.

Investment One

Comparing FY 2018 to FY 2017, revenue improved by 13.5% largely on account of volume, particularly in the value segment. According to the parent company, Diageo, the beer segment grew 15.0% y/y with continued strong growth in its Dubic brand. Furthermore, there was support from its Guinness brand with volume up 24.0% y/y in the year while the spirit segment recorded 28.0% y/y, largely on account of double digit growth in mainstream spirit brands.

Q4 2018 y/y revenue growth was slowest since Q4 2016 (11.5% higher than our estimate). We suspect the moderation in top line performance may be a reflection of the intensified competition in the brewery industry following the consolidation and expansion of International Breweries. The result was weighed down by input cost pressure, which more than offset the reduction in operating expenses as well as the benefit of deleveraging.

Going forward, we are of the view that top line growth may be limited due to the inability to take price increases as a result of increased competition in the sector as well as the implementation of the increased in excise duties. While revenue growth may see support from potential drive to absorb part of the excise cost to grow volume, we highlight that this in addition to the expectation that value brand may be the major driver of topline in the near term, may negatively impact gross margin performance. However, we expect the company’s operating efficiency and improved financial leverage to be supportive of bottom line performance in the near term.


GUINNESS FY’18 (year ended 30 June 2018) revenue grew 14% y/y to 143 billion, only slightly below our 144 billion estimate, with the growth driven by a 10% y/y increase in volumes for the period.

Reflecting inflationary pressure on GUINNESS’ input costs, gross profit for FY’18 stayed flat y/y at 48.6 billion despite the 14% revenue growth for the period.

noting the soft demand environment, intense competition and effect of the new excise duties, we expect FY’19 to be a tough year for GUINNESS’ topline ambition with the company’s seemingly weaker foothold in the value lager beer segment (which is estimated to account for 57% of the beer market) leaving it vulnerable in the near term.

Cordros Capital

Revenue grew y/y and q/q during the period,

Q4-18 performance (for the period ended June 2018) was not impressive, and will likely result in negative reaction to the stock in today’s trading.

We have a SELL rating on the stock as at our last update.


sales grew by 4.0% y/y and net interest expense and opex declined by -24% y/y and 7% y/y respectively,

Guinness’ Q4 2018 (end-Jun) results showed that PBT and PAT declined by
60% y/y and 64% y/y to N2.1bn and N1.6bn respectively.

Guinness shares have outperformed the NSE ASI this year (-4.3% vs.-10.1% NSE ASI). The shares imply a potential downside of - 18.4% from current levels. As such, we retain our Neutral rating on the stock.

Source: CardinalStone, Cordros Capital, FBNQuest, Vetiva

Find out more information, Click here to access GUINNESS’s IR Portal in Proshare Markets


The review of GUINNESS’s price performance among its peers revealed that it has recorded an average return of -6.89% between 2011 and 2018 compared to CHAMPION (27.44%), INTBREW (45.08%) and NB (3.80%).


Similarly, a look at the YTD price performance revealed that GUINNESS has recorded a return of -14.36%, CHAMPION (19.23%), INTBREW (41.81%) and NB (34.76%).


Price Performance Review

S No





Champion Breweries

International Breweries

Nigerian Breweries

































































Average Return (2011-2018)





Source: Proshare Research, NSE


Proshare Nigeria Pvt. Ltd.



Proshare Nigeria Pvt. Ltd.

Source: Proshare Markets/TheAnalyst

Find out more information, Click here to access GUINNESS’s IR Portal in Proshare Markets



A review of GUINNESS results showed that its turnover moved up by 13.55% from N142bn in 2018 to N125.9bn in 2017 while its PAT also improved by over 200% from N1.92bn in 2017 to N6.72bn in 2018.

Proshare Nigeria Pvt. Ltd.

Source: Proshare Markets/TheAnalyst

Find out more information, Click here to access GUINNESS’s IR Portal in Proshare Markets



At the end of its 2018 FY, GUINNESS recommended a dividend of N1.84k which was approved at its AGM held on October 24, 2018. The proposed dividend fall short of the N3.13k dividend proposed by Nigerian Breweries Plc, an industry rival to GUINNESS.


Timelines of Recent News on GUINNESS



Comments From News

Share Price


Guinness Nigeria plc held its 68th Annual General meeting yesterday

Guinness Nigeria plc held its 68th Annual General meeting yesterday, Dividend of N4.03 billion was declared for its shareholders translating to a dividend of N1.84 per share. Chairman of Guinness Nigeria, Mr. Babatunde Savage, disclosed that although the challenges in the operating environment are yet to ease, the execution of our strategy is working well as we delivered both top line growth and margin expansion while also increasing investment behind its brands. Going forward, Savage stressed that the company would continue to focus on the three strategic pillars of productivity, expansion of its portfolio, as well as the execution of the commercial footprint initiatives to drive the business forward.



Guinness Nigeria Plc Nominated for the 2018 "The Pearl Awards"

The Pearl awards which takes place on the 25th of November has Guinness Nigeria Plc as a nominee under its consumer goods- (breweries) sectorial leadership award



Guinness on Septmeber 18, Announced changes to its Board of Directors

Guinness announced the following board changes:                                                                         

1.       Prof.Joe Irukwu SAN retired as a non- executive director.                                                       

2.      2. Mrs. Yemisi Ayeni was appointed as a Non- executive director and member of the board of directors



GUINNESS Released its 2018 Audited result on August 30

Profit of 6.37 billion Naira was declared, while share price stood at 90 naira per share


Source: Vanguard, Proshare


Proshare Nigeria Pvt. Ltd.




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