CHAMPION BREWERIES PLC: NOW LOOKING LIKE A CHAMPION.

The smiles are back on the faces of  stakeholders of Champion Breweries PLC not because it recorded fantastic increase in turnover for the nine months to September but because pressure from cost of operations has reduced considerably.
According to the figures released last week Champion Breweries turnover increased by 3.94% to N2270.2m. Even this was watered down further by a 63.1% dive in income from other sources forcing overall income growth to drop to 1.84%.
Beyond this, it is easy to see that Champion Breweries had begun to win battles. Its cost of sale decreased by 8,02% to N1731m from N1888.1m; finance charges went down 99.7% to N24.6m from N1064.5m; and distribution and administration costs capped it all with 18.5% drop to N527.2m.
Consequently, Champion Breweries pulled out if the loss league by September closing with N62.6m profit as against N1344.4m loss previously.
Champion Breweries ended up being more liquid too with just N585.4m working capital deficit compared to N2040m previously ( that is 71.3% better).
IN THE END:
* So long as its cost continues to behave, Champion Breweries should close the year with higher profit margin than the 2.73 clocked by September
* However it must continue to be mindful of it's working capital to ensure longer lasting relief from high finance charges

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