Site icon MONEYINAFRICA

UAC Nigeria to Implement Pricing Strategies for Better Gross Margin

UAC Nigeria to Implement Pricing Strategies for Better Gross Margin

By Dipo Olowookere

The Group Managing Director of UAC Nigeria Plc, Mr Fola Aiyesimoju, has expressed the willingness of the management to print a better gross margin going forward.

Business Post reports that a gross margin, which is also known as the gross profit margin, is calculated by deducting the cost of goods sold from revenue and dividing the outcome by revenue.

In the 2021 financial year, UAC Nigeria recorded a gross margin of 17.3 per cent compared with the 19.7 per cent achieved in the 2020 accounting year.

Mr Aiyesimoju attributed this decline to the rising prices of raw materials in the fiscal year under review, noting that to address the issue, the company will implement its pricing strategies.

“Sustained escalation in raw material costs remains a concern and resulted in deterioration of our gross profit margin which we did not fully offset with our efficiency gains.

“A key focus going forward is on implementing pricing strategies to improve gross margin,” he stated.

However, he stressed that UAC Nigeria is “encouraged by strong topline growth delivered across our operating platforms and improving efficiency as evidenced by our operating expenses to sales ratio.”

Speaking further, he said, “In line with our strategy to simplify the UAC Group structure and enhance shareholder value, we completed the distribution of UPDC REIT units, attained 100 per cent ownership of UAC Foods Limited, merged and fully integrated CAP Plc and Portland Paints and Products Nigeria Plc.”

In the year, the firm boosted its revenue by 24.3 per cent to N101.1 billion from the *1.4 billion reported a year ago and this was supported by sales growth across all operating segments.

It was observed that the Animal Feeds and Other Edibles segment rose by 15.7 per cent as a result of an increase in prices to offset rising raw material costs.The Paints segment of the business posted revenue growth of 44.4 per cent on account of higher volumes and price increase compared to 2020 which was impacted by limited sales due to the restrictions in the movement of people and goods in Q2 2020.In addition, the Packaged Food and Beverages arm of the group grew its turnover by 33.0 per cent as a result of volume growth in the snacks, water and dairy categories; while the Quick Service Restaurants segment rose by 44.9 per cent.A look at the financial statements showed that the firm recorded a gross profit of N17.5 billion in […]

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.
Exit mobile version