Guinness Stock Performance Lagos – The inclement business environment is weakening purchasing power, challenging company’s ability to expand revenue as was Guinness Nigeria PLc, Nigeria’s second biggest brewer known for Guinness Extra Stout and Guinness Malt among other beverages.
Guinness faltered as inflation ravaged at over 11 percent and growth slow at 1.8 percent in the last quarter of 2018, which is Guinness second quarter and six months financial period, as revenues shrank 4 percent to N67.8 billion from N70 billion. Despite the revenue slide, Cost of Goods Sold rose marginally at 1.6 percent to N47.3 billion from N46.6 billion to cause a setback for gross profit, which dropped to 14.6 percent to N20.5 billion from N23.9 billion. It was inevitable for gross profit margin to sink with the heavy toll on gross profit as it fell to 30.2 percent from 34 percent.
With operating profit sinking by a whopping 30 percent to N4.64 billion from N6.7 billion, making suspect the brewer’s ability to manage operating costs, operating profit margin fell to 6.8 percent from 9.4 percent. The company tempered the level of leverage in the period as net finance costs shrank heavily by more than two third to N845.4 million from the heights of N3.1 billion. The low gearing allowed the brewer hit a positive pre-tax profit of N3.8 billion, up 7.1 percent from the N3.5 billion achieved in the equivalent period in 2017. It also had the effect of improving pre-tax profit margin by a tad to 5.6 percent from 5 percent.
A robust pre-tax profit position served to boost bottom line, pushing it up 21 percent to N2.6 billion from N2.13 billion and dragging up net profit margin with it to 3.8 percent from 3 percent. Growing profit had a positive effect on the ability of the company to make money from its assets as return on assets inched to 1.6 percent from 1.4 percent. It also improved the ability of shareholders funds to wring more naira for the company as return on assets moved up to 3 percent from 2.4 percent.
Despite the profit making performance, the stock is at best sluggish in its trajectory as it sat comfortable on the losers table Monday, April 8. In this is as the stock underperformed the All Share Index (ASI) in the last six months by making a return of negative 22 percent to investors while the ASI made a return […]