Guinness Nigeria Plc, said on Thursday that net profit for the full year ending on June 30 grew 249% to N6.7bn, from N1.9bn in the previous year.
The company best known for its popular Guinness Foreign Extra Stout among a roster of other brands, and in more recent years has broadened its offerings to include International Premium Sprits brands (IPS), said that profit growth was helped by a 14% growth in revenue to N143bn. The firm’s Operating Profit rose by 31.4% to N13.3bn, benefiting from productivity gains. The company noted that its marketing spend increased by 18% demonstrating a sustained investment behind its brands. The company saw a 28% reduction in administrative expenses, while net finance cost declined by 54% to N3.4bn, from N7.5bn, benefiting from the N40bn rights issue it launched last year.
Commenting on the results, the new Managing Director of Guinness Nigeria Plc, Mr Baker Magunda, said that “despite continued challenges in the operating environment, Guinness Nigeria delivered a strong performance. Revenue increased by 14% as both beer and mainstream spirits’ net sales grew double-digit. In beer, Guinness, our largest brand, saw strong growth as it benefitted from increased marketing activations around football. Mainstream spirits also delivered double-digit growth driven by innovation launches and new formats.”
“During the year, gross margin was down 4% to 34% largely driven by inflationary pressure on our raw material costs. However, this was more than offset by reduced distribution and administration costs and resulted in operating margin improving 130bps. Marketing spend increased 18%, ahead of revenue growth, as we continue to invest behind our brands.”
“Improved operating performance combined with lower finance charges has helped us deliver an overall PAT increase of 249% during the year”.
“The execution of our strategy is working as we delivered both top line growth and margin expansion while also increasing investment behind our brands. Looking forward, we will continue to focus on the three strategic pillars of productivity, expansion of our portfolio, as well as the execution of the commercial footprint initiatives to drive the business forward. Whilst we remain optimistic about the execution of our strategy, we note that the operating and competitive environment is likely to continue to be challenging in the 2019 financial year,” he said.