GUINNESS NIGERIA: RUNAWAY OVERHEADS

The main headache for Guinness Nigeria PLC in the financial year to June 2015 was that of runaway overhead costs.
Sure, the times are trying presently in Nigeria but Guinness Nigeria still managed to grow its turnover by 8.52 per cent to 11b.5 Billion Naira (N) from N109.2 Billion in 2014 financial year. It also successfully held down growth in cost of producing the goods for sale to 8.12 per cent to N62.6bn from N52.9bn.
The ache came from distribution and marketing costs which closed the year to June at N40.9bn up 13,9 per cent on 2014 level. That is well ahead of the growth recorded in turnover.
In addition, finance costs applied more pressure when it rose to N4.87bn; 9.68 per cent higher that year 2014's N4.44bn.
In the end, the company' profit margin (gain on each N100 sale recorded) dropped to 9.11 per cent compared to 2014's 10.7 per cent.
THUS:
* In the current financial year to June 2016, Guinness may have to find a way to cage these overheads to stay as profitable as it even ended 2015, not to talk of 2014.
* It could also try to achieve the same goal by gunning for more sales but it is hard to see how that can be done without more hard sell marketing in today's Nigeria with consumer spending in distress.

Comments

Post a Comment

Popular posts from this blog

2018: TWO BLOWS TO UNITED CAPITAL PLC.

When a child who in a previous examination scored 80%, comes home with a new report in which he now scores 67.2%, the parents have a right to sit him down and ask how come. So it must be between Nigeria's United Capital Plc and its discerning shareholders since the release of the company's 2018 audited figures. In 2018, all said and done, says the annual report, United Capital ended with 67.2 % profit margin compared to 80.2% in 2017. How come? What comes across from the figures was that the company received 2 blows to the jugular in 2018: Sharp drops in Investment income and fair value gain. Investment income dropped by 10.8% to N4422.8m from N4965.2m while fair value on financial assets plunged by 79.7% to N6.173m from 2017's N30.387m. In view of both drops, the group's gross earnings grew by only 33.9% to N9259.4m despite strong growths in net trading income, and net operating income leap to N757.5m from N143.5m  Other income streams ended with single digit increase....
Read more

KENYA AUCTIONS Ksh 13.84bn Treasury Bonds.

The Central Bank of Kenya (CBK) will from Tuesday December 18 to 27th 2018_ auction Ksh 13.84bn worth of fixed income Treasury Bonds with issue date December 17, 2018. According to official statement from the Director of Financial Markets Irene Njiru on Monday December 17, auction will continue throughout the stated period or close once the target money to be raised is reached, whichever comes first. Bid value will be paid for at most by 2pm December 31, 2018 while auction results will be made public on December 28, 2018 after the scheduled closing date. The bonds are being issued at 12.502% fixed interest at an adjusted average price of Ksh 100.468 for Ksh 100 bond. However, price payable after auction results publication will be average of successful bid prices based and allotment will be on first come first served basis. Meanwhile, the monetary operations and debt management department has released the interest payment schedule for 13 Treasury Bonds due January and February 2019. Th...
Read more

NAIROBI SE's HIGH PRICED EQUITIES.

In the wake of Nigeria's high priced quoted companies posted in this blog a while ago, Henates took a look to at Nairobi Securities Exchange June 23 official list to identify its high priced equities and the outcome was interesting too. Of the 66 companies quoted on the market by June 23, 15 or 22.7% were valued averagely at above 30 times nominal value. A word of caution though: There are two clear differences between the Nigerian stock market list and that of Nairobi: In the Nigerian one most listed companies have par or nominal value of N0.50 as is there is an implied agreement on this. On the other hand, at Nairobi most of the equities do not share common par value, they differ greatly. Then another thing, Nigerian equities are not valued below par, Nairobi ones can and many are so valued. Of the top 15 high priced equities at the Nairobi market, Safaricom topped with because by June 23, at 23.25 Ksh average price, it was valued 465 times its nominal value of just 0.0...
Read more