NIGERIA Plc, for its half year results for the period ended 31st December 2017, has recorded 31 percent increase in gross profit.percent delivered revenue of N70.6 billion and gross profit of N24 billion, representing an increase of 19 percent and 31 percent respectively over the same period last year.
The results released to the Nigerian Stock Exchange (NSE), indicated topline growth driven by both spirits and beer reflecting the expansion of the company’s portfolio and improved operating margins with benefits from productivity initiatives despite sustained cost pressures.
Also, marketing spendings increase by 17 percent demonstrating sustained investment behind Guinness Nigeria’s brands. Administrative and distribution expenses declined, driven by the company’s continuing focus on productivity.
Speaking on the half-year results, Peter Ndegwa, Managing Director/CEO, Guinness Nigeria Plc noted that in a difficult operating environment, notwithstanding recent signs of economic recovery, the company delivered a strong performance with net sales growth of 19 percent for the half year with growth in spirits and benefits of an expanding portfolio and also against the backdrop of lapping inventory reduction from prior year.
“We believe in the continued execution of our strategy, allowing us to navigate a tough environment characterised by down trading of consumers as disposable income is subjected to additional pressure.We have made significant progress in driving productivity especially in the supply chain and the commercial function, even though cost pressures and inflation takes its toll, ” Ndegwa said.
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He added that during the period, the company had continued to innovate with increased marketing spend across our portfolio to drive the growth on core brands and to fund expanding portfolio and innovation pipeline.
On the successful completion of the rights issue exercise where Guinness Nigeria received approval from its shareholders to raise N40 billion from existing shareholders, Mr Ndegwa said the utilisation of the rights issue proceeds leading to significant reduction of the Diageo loan and other borrowings, has resulted into a 32 percent reduction in the net finance charges and improved our debt to equity ratio from 82 percent to two percent.