Keeping their shareholder happy
In the past financial year ended 30 June 2009, Guinness Nigeria, the country’s number two brewer, recorded a turnover of NGN 89 billion which represents an increase of 29 percent over the prior year and a trading profit of NGN 19.81 billion, an increase of 25 percent over the previous year. Earnings per share rose 14 percent to 918 Kobo. Profit before tax grew by 11 percent to NGN 19 billion up from NGN 17 billion.
Nigeria-based stockbrokers CSL rated Guinness Nigeria Plc, Guinness Ghana Breweries Ltd and Mauritius’s Phoenix Beverages Ltd “outperform”, arguing that African beer stocks are cheap compared with the prospects for economic growth and consumption.
The companies, CSL said in a recent research note, “trade at significant discounts both to their peers in other emerging markets and to the global majors themselves.”
GDP per capita in Nigeria, Africa’s most populous nation, will advance 2.1 percent this year and growth will accelerate to 8 percent in 2011, CSL wrote. Sales for the three beer companies should increase 13.5 percent in 2009, resulting in average net earnings growth of 15.4 percent, according to projections by CSL, part of the First City Group, the parent of Lagos-based First City Monument Bank Plc, a Nigerian lender.
