…As Company Consolidates Gains Of Merger, Local Content
Nigerian Breweries (NB) Plc, a foremost quoted company on the Nigerian Stock Exchange (NSE), has shown great resilience in its activities that dominate the brewery sub-sector of the Capital Market. Amid tough operating environment which poses great challenge to the real sector, its 2015 operating results, recently submitted to the NSE, confirms that the firm operates in the league of companies on a solid pedestal. Stakeholders and industry experts have therefore expressed satisfaction at the commendable performance of NB in the last financial year.
Industry experts confirm that NB Plc, has continued to excite both its shareholders and stakeholders with its performance results over the years. For example, for the half year ended June 30, 2015, the company reported a revenue growth of N151.7 billion. The figure was an increase of 7.2 per cent above the N141.5 billion recorded in the corresponding period of 2014. The company ended the period with a gross profit of N30.99 billion and the profit after tax stood at N21.5 billion.
Ahead of the over 200 quoted companies on the NSE, the Board of Directors of NB Plc has announced a 10.3 per cent increase in revenue from N266 billion recorded in 2014 to N293 billion in the 2015 financial year. The 2015 audited results filed with NSE show that the Company’s shareholders would enjoy a total dividend of N4.80 per ordinary share of fifty kobo each for the 2015 financial year. If approved by shareholders at the upcoming Annual General Meeting, the amount would be the highest dividend ever paid by the company in its 70 year history.
The Company had earlier paid an interim dividend of N9.5 billion that is, N1.20. Thus, the final dividend will be N28.5 billion, bringing it to N3.60 per share. Figures pieced from the audited results show that results from Operating Activities closed at N62 billion in 2015 while Profit Before Tax (PBT) stood at N54 billion in the same period. Profit After Tax (PAT) was N38 billion.
The Company Secretary and Legal Adviser,UaboiAgbebaku, in the statement noted that the NB Plc was able to achieve strong results and deliver good return on investment to shareholders in 2015 due to its twin agenda of cost and market leadership supported by aggressively pursued innovation. While observing that 2016 would see a continuation of the tough operating environment of 2015, Agbebaku emphasised that the Board remains confident, noting that with its strong portfolio and cost leadership agenda, NB Plc should, barring unforeseen circumstances, be able to take advantage of any upswing in the market.
The company has consistently expanded its business in Nigeria since it was established in 1946, but quoted on the NSE in 1973. It has also keyed into the Federal Government local content development with the aim of achieving 60 per cent local input for its raw materials.
In October 2011, it acquired majority equity interests in two companies, Sona Systems Associates Business Management Limited (Sona Systems), with two breweries in Ota and Kaduna, and Life Breweries Company Limited (Life Breweries) with a brewery in Onitsha. Sona Systems and Life Breweries were merged with the Company in the middle of 2012.
Another malting plant was acquired in Kaduna (as part of Kudenda Brewery) as a result of the acquisition of Sona Systems. At the end of 2014, an enlarged Nigerian Breweries Plc emerged from the merger with Consolidated Breweries Plc. Three breweries at Imagbon, near Ijebu Ode, Awo-Omamma and Makurdi were added to the existing eight breweries as a result of the merger.
The company had announced it would pursue vigorously its plan to develop the production of sorghum and cassava – two items of agricultural produce used in the production of its alcoholic and non-alcoholic beverages. Nigeria’s bourgeoning agriculture sector which has received government’s priority attention in recent times, has enjoyed the contribution of the multinational whose commitment to the sector’s enhanced contribution to Gross Domestic Product (GDP) is commendable.
It is obvious that the support of Heineken International, Nigerian Breweries parent body, to achieve this objective is not in doubt. It had said that a major policy of the organization was for 60 per cent of raw materials needed in each African country where they operate should be sourced locally, adding that the policy was being vigorously pursued in Nigeria.
A study of Nigerian Breweries publication on sorghum development, “Enhancing the Sorghum Value Chain” (2014), shows that the multinational has continued to achieve increased farm yield, resulting in harvest of tonnes per hectare of land. The farmers who are the direct cultivators of the grain are highly rewarded through increased revenue and support from Government.
They have also used the opportunity to access the various government agricultural financing schemes such as the Commercial Agricultural Guarantee Scheme; Micro, Small and Medium Enterprises (MSME) Loans and other Central Bank of Nigeria (CBN) financing arrangements.
National Co-ordinator, Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu, described NB Plc 2015 results as encouraging and one that would please the shareholders. “It is a good one for the shareholders and the company. Considering the present poor state of the economy, the result is an indication that there is still hope for the country,” Nwosu told The UNION in a telephone chat.
A stakeholder and President, Renaissance Shareholders Association of Nigeria,Olufemi Timothy, commended NB Plc for its impressive dividend payout and robust presence in the Capital Market. “It is a good payout. NB has one of the best dividend payout policies, and is very consistent in the Capital Market,” Timothy said, adding that Shareholders have received good returns on investment in the NB stock which he described as good for long term investment.
Also commenting on the 2015 NB Plc results, National President, Constance Shareholders Association of Nigeria, ShehuMallamMikail, said that the dividend payout, though fell short of expectation, should impress the shareholders. He observed that the viability of the acquired entities should boost the company’s revenue and yield higher dividends. According to Mikail, with prudent approach to operating and campaign costs, the company stands on a sound pedestal. “It is an indication that better things are coming from Nigerian Breweries,” the shareholders association boss said in a telephone interview yesterday.
Meanwhile, Investors in the Nigerian equities market are already positioning for results of blue chip stocks on the NSE. Last week, investors smiled home as the market rallied for five straight days to close the week in the green. Specifically, the bullish run experienced last week on the Nigeria bourse was buoyed by investors’ drive to take position ahead of probable positive earnings release by listed companies, especially foremost stocks like NB Plc that have declared dividends for the 2015 financial year.