NIGERIAN BREWERIES BREWING ACHES.

If the financial year to December 2015 was rather tight for Nigerian Breweries PLC it is likely to be nothing when compared to what lies ahead, all things being equal.
That is, according to the figures for the year released this week to the stock exchange.
In the immediate horizon is finding money to pay N28544.8m recommended dividend for the year payable by May 12 once it is approved at annual general meeting by May 11 2016.
From the 2015 figures. this may prove an uphill task with only N5106.9m cash on hand by December and about N34614.6m current financial liabilities also due for payment this year.
Already Nigerian Breweries working capital was in the red by N86775.3m compared to N61832.8m deficit by 2014 year end.
But the brewing aches do not end there. In 2016 Nigerian Breweries will also tackle or learn to live with the high cost of operations especially since from 10.3% increase in core revenue, direct cost grew by 15.8%, distribution and administration expenses rose by 14.6% and of course, finance charges ended 42.9% up in line with growth in financial liabilities.
Core revenue had closed the year at N293905.8 as against N266372.5m previously with total income rising by lower 9.81% as income from other sources dropped by 71.8% to N483.9m from N1717.5m.
On the other side of the scale, direct cost increased to N151443.9m from N130788.3m and overhead came to N80716.7m compared to N70440.8m in 2014.
Consequently, with finance charges coming to N7714.2m from N5399.1m, profit before tax ended at N54514.8m down 11.3% on 2014's level.
Sure with this working out at N18.5 gain on each N100 income, Nigerian Breweries still has enough room to stay afloat in spite of the times but compared to 2014's N22.9, some concern emerges.
SO:
* Liquidity management remains a major priority in 2016 if only to find the money to pay recommended dividend and due current liabilities.
* In view of the company's tight money position it is tempting to say recommending the sharing of 75% of distributable income was too much but then, foreign shareholders have to be given reason to smile too.

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