Guinness Nigeria Plc has grown its revenue by 14 per cent, rising to N142.98 billion in June 2018 from the N125.92 billion earnings grossed in June 2017.
In the results released to the Nigerian Stock Exchange (NSE) and obtained on Friday, the brewery giant also showed improved operating margin, as benefits from the company’s productivity program more than offset sustained cost pressures.
Guinness Nigeria is a known sponsor of footballing activities and tournaments and has always leveraged on the acceptance of foreign football leagues like the English Premiership, La Liga in Spain and other European football leagues which it assisted in beaming to Nigerian fans.
In addition, the build-up and the final of the just concluded FIFA World Cup 2018 In Russia also help in boosting Guinness revenue for the year
Commenting on the results, Managing Director/CEO, Guinness Nigeria Plc, Baker Magunda, said, “Over the year ending 2018, despite continued challenges in the operating environment, Guinness Nigeria delivered a strong performance.
“Revenue increased by 14per cent as both beer and mainstream spirits’ net sales grew double-digit. In beer, Guinness, our largest brand, saw strong growth as it benefitted from increased marketing activations around football. Mainstream spirits also delivered double-digit growth driven by innovation launches and new formats.”
“During the year, gross margin was down four per cent to 34per cent largely driven by inflationary pressure on our raw material costs. However, this was more than offset by reduced distribution and administration costs and resulted in operating margin improving 130bps. Marketing spend increased 18 percent , ahead of revenue growth, as we continue to invest behind our brands.
“Improved operating performance combined with lower finance charges have helped us deliver an overall PAT increase of 249 per cent during the year. The execution of our strategy is working as we delivered both top line growth and margin expansion while also increasing investment behind our brands.
“Looking forward, we will continue to focus on the three strategic pillars of productivity, expansion of our portfolio, as well as the execution of the commercial footprint initiatives to drive the business forward. Whilst we remain optimistic about the execution of our strategy, we note that the operating and competitive environment is likely to continue to be challenging in the 2019 financial year.”
The Chairman of the Board of Guinness Nigeria Plc, Babatunde Savage said, “Guinness Nigeria has confidence in the Nigerian economy and will remain a major player in the country by continually investing, developing capacity and growing a portfolio that most suit the consumers’ needs for celebration and relaxation.
“Our aim is to continue to add value to Nigeria not only through continued investments in local manufacturing and backward integration but also through various Sustainable Development projects, enabling job opportunities and economic inclusion.”
“As a Board, it is heartening to see the impact of the rights issue coming through in the profitability of the company. The Board is confident that we are making the right investments in the company to ensure our long-term competitiveness, and continues to support the management in its efforts to build a business that aims to consistently deliver growth for all stakeholders.”