7UP BOTTLING PLC: LOANS AND MORE LOANS

7UP Bottling PLC seems to have acquired some appetite for loans this financial year and guess what, it is hard to tell if this already causing any threats to the bottom line.

According to the interim figures for nine months to December released recently, 7up increased its total loans by N20234.3m within the period compared to N2513.8m increase in the whole of the previous financial year.

It did this while being conscious of servicing cost though, and so immediate impact on bottom line does not seem to be proportional yet.

It grew long term debt by 122.2% to N10,000m then topped short term borrowing by 118.8% to N28443.8m but reduced far more costly overdraft by 11% to N2701.6m.

Hence finance cost within the period rose by only 20.3% to N3098.2m but mind you, at 44% to N1295.3m, the growth recorded in the third quarter alone was higher thus hinting that full weight will only be visible by fourth quarter's end.

However, nine months into the year, says the figures, 7up was already in loss league by N4843.2m compared to N2884m profit at the same time in previous year.

This was less because of higher appetite for loans but more because cost of sale seemed to have developed wings in the third quarter rising by 79.4% compared to final 52.1% increase to N64086.2m for the full nine months.

This was as core revenue rose by only 26% to N75,899m.

Otherwise, the 9.65% decrease in administration cost to N3937.4 within the nine months and even 14.6% increase in selling and distribution cost to N9699.5m, did not pose a threat to boytom line given income growth recorded.

In the end, 7up ended the nine months losing N6.36 on each N100 income compared to N4.77 gain previously.

It did succeed though, in reducing its liquidity crisis that saw working capital decline to N4622.4m deficit by December after ending 2016 year at N9631.6 deficit which itself was up on N8067.7m deficit by december 2015.
7UP BOTTLING: Nm Nine months.
                        2016.             2015
Total income 76128.1.        60404.0
Core income. 75899.0.        42120.7
Other income    145.8.             158.9
Distribution.    9699.5.          8465.8
Administration 3937.4.        4358.0
Finance income   83.3.              19.0
Finance cost.     3014.9.         2556.6
Profit b4 tax.    (4843.2).        2884.0
Working capital (4622.4).    (8067.7)
Overdraft.              2701.6.      3033.9
Short term loans  28443.8.    13000.0
Long term loans   10,000.0.     4500.00


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