The Nation Newspaper

Tag: Guinness Nigeria

  • Shareholders approve Guinness Nigeria’s N40b rights issue

    Shareholders of Guinness Nigeria Plc yesterday in Lagos approved the plan by the board of directors of the company to raise some N40 billion new equity funds from existing shareholders.

    At the extraordinary general meeting in Lagos, shareholders passed resolutions authorizing the board of directors to proceed with the proposed rights issue, which will enable the company to raise up to N40 billion in new capital.

    Speaking at the meeting, chairman, Guinness Nigeria, Babatunde Savage, said the new equity funds would support the long-term performance of the company and help to position it in better stead to weather the challenges in the operating environment.

    “We believe this rights issue will positively impact on the financial performance of Guinness Nigeria and help mitigate the impact of increasing finance costs in what continues to be a challenging economic environment in Nigeria. I call on all my fellow shareholders to take this opportunity and support the company’s objectives,” Savage said.

    In his remarks, managing director, Guinness Nigeria, Peter Ndegwa, said that the company has good fundamentals and potential for the future.

    According to him, Guinness Nigeria is a company with excellent fundamentals and it has the right strategy and the right people to grow its business for the future.

    “This rights issue in combination with our productivity and cost optimization drive will help provide the fuel to continue to build this business for Nigeria and Nigerians,” Ndegwa said.

    While the details of the capital raising are still sketchy, the supplementary capital raising will be exclusively for predetermined subsisting shareholders of the company. The new shares on offer will be proportionately allotted to the existing shareholders based on their shareholdings as at a particular date. However, shareholders may decide to trade their renounced allotment on the Nigerian Stock Exchange (NSE).

    Guinness Nigeria closed yesterday at the NSE at N71. It has traded between a high of N122.59 and a low of N62.10 in the past 12 months.

    The new capital raising is however still subject to approval of the Securities and Exchange Commission (SEC) and NSE.

    The proposed capital issue will provide another window for Diageo Plc, the parent company and majority shareholder of Guinness Nigeria Plc, to inject capital into the Nigerian subsidiary after the multinational backed down from its earlier proposal to acquire additional equity shares in Guinness Nigeria.

    Diageo had recently withdrawn from its plan to acquire additional shares of up to 15.7 per cent in Guinness Nigeria citing the challenging market conditions in Nigeria. Diageo had in September 2015 announced that it was considering acquiring 15.7 per cent equity stake in Guinness Nigeria through its wholly owned subsidiary, Guinness Overseas Limited.

    Guinness Nigeria had recorded net loss of N2 billion in the immediate past year as the brewing multinational struggled with declining sales amidst dwindling consumer spending and tough macroeconomic situation.

    Key extracts of the audited report and accounts of Guinness Nigeria for the year ended June 30, 2016 released yesterday showed that turnover dropped by 14 per cent from N118.5 billion in 2015 to N101.97 billion in 2016. Operating profit declined by 72 per cent from N15.67 billion to N4.42 billion. The company recorded a pre-tax loss of N2.35 billion in 2016 as against profit before tax of N10.8 billion in 2015. After taxes, net loss stood at N2.02 billion in 2016 compared with net profit of N7.790 billion in 2015.

    The company is expected to release its first-half results for the six-month period ended December 31, 2016 within the next two days.

  • Guinness Nigeria eyes N40b new equity funds in rights issue

    Guinness Nigeria PLC plans to raise about N40 billion from its shareholders as part of strategic plan to deepen its balance sheet and provide long-term financial support for its business.

    A notification issued by the company indicates that the Board of Directors of Guinness Nigeria has fixed an Extraordinary General Meeting (EGM) for January 24, next year to place the new capital raising plan before the shareholders and secure the shareholders’ resolutions to proceed with the fund raising.

    While the details of the capital raising are still sketchy, Guinness Nigeria plans to undertake a rights issue to raise up to N40 billion, limiting the new capital issue to predetermined subsisting shareholders of the company. The new shares on offer will be proportionately allotted to the existing shareholders based on their shareholdings as at a particular date.

    According to Guinness Nigeria, the rights issue will allow the company to optimise its balance sheet while improving its financial and operational flexibility.

    Guinness Nigeria closed the last trading session at the Nigerian Stock Exchange (NSE) at N88.73. It has traded between a high of N126.99 and a low of N71.82 in the past 12 months.

    The new capital raising is, however, still subject to approval of the Securities and Exchange Commission (SEC) and NSE.

    The proposed capital issue will provide another window for Diageo PLC, the parent company and majority shareholder of Guinness Nigeria PLC, to inject capital into the Nigerian subsidiary after the multinational backed down from its earlier proposal to acquire additional equity shares in Guinness Nigeria.

    Diageo recently withdrew its plan to acquire more shares of up to 15.7 per cent in Guinness Nigeria, citing the challenging market conditions in Nigeria. It had in September, last year announced that it was considering acquiring 15.7 per cent equity stake in Guinness Nigeria through its wholly owned subsidiary, Guinness Overseas Limited.

    Guinness Nigeria had recorded net loss of N2 billion in the immediate past year as the brewing multinational struggled with declining sales amidst dwindling consumer spending and tough macroeconomic situation.

    Key extracts of the audited report and accounts of Guinness Nigeria for the year ended June 30, 2016 released yesterday showed that turnover dropped by 14 per cent from N118.5 billion last year to N101.97 billion in 2016.

    Operating profit declined by 72 per cent from N15.67 billion to N4.42 billion. The company recorded a pre-tax loss of N2.35 billion in 2016 as against profit before tax of N10.8 billion in 2015. After taxes, net loss stood at N2.02 billion in 2016 compared with net profit of N7.790 billion in 2015.

  • Guinness Nigeria optimistic despite N2.2b loss in Q1

    Guinness Nigeria PLC has expressed optimism that growths in sales across its diverse brands will provide long-term cushion for its overall performance after the breweries giant recorded net loss of N2.2 billion in its first quarter.

    The three-month report for the first quarter ended September 30, 2016 showed that turnover grew by six per cent, but the company had a loss after tax of N2.2 billion in the period.

    Managing Director, Guinness Nigeria, Peter Ndegwa, said the revenue growth was in spite of continuing challenges in the operating environment.

    According to him, the environment remains tough, but the company has seen contributions from its mainstream and international premium spirits brands as well as continuing growth of its value brands, which were the key drivers of the six per cent revenue growth recorded for the quarter.

    “Our cost of sales was impacted by the high inflationary environment and continuing currency devaluation leading to a reduction in operating profit. The higher finance cost in the quarter is due to the impact of unrealised foreign exchange losses as a result of the currency devaluation,” Ndegwa said.

    He outlined that going forward, innovation would continue to be a big part of the company’s strategy as it looks to deepen its participation in the mainstream and value segments.

    “We will also continue to invest behind our brands with a key focus on building the right portfolio for future growth and re-shaping our organisation to take advantage of what is likely to continue to be a challenging market in the short to medium term,” Ndegwa added.

    Citing long-term commitment to the Nigerian market as a key driver, Guinness Nigeria recently announced further 12 million pounds investments into Nigeria as it plans to commission a new spirits manufacturing line in its Benin plant in the coming weeks. This investment is expected to give a big boost to the company’s ambition to source 75 per cent of its production raw materials locally in the next two years.

     

  • Guinness Nigeria loses N2b as consumer spending declines

    Guinness Nigeria Plc recorded a net loss of N2 billion in the immediate past year as the brewing multinational struggled with declining sales amidst dwindling consumer spending and tough macroeconomic situation.

    Key extracts of the audited report and accounts of Guinness Nigeria for the year ended June 30, 2016 released yesterday showed that turnover dropped by 14 per cent from N118.5 billion in 2015 to N101.97 billion in 2016. Operating profit declined by 72 per cent from N15.67 billion to N4.42 billion. The company recorded a pre-tax loss of N2.35 billion in 2016 as against profit before tax of N10.8 billion in 2015. After taxes, net loss stood at N2.02 billion in 2016 compared with net profit of N7.790 billion in 2015.

    The board of directors of the company meanwhile has decided to dip into the reserves of the company to pay a dividend per share of 50 kobo for the 2016 business year, 84 per cent below N3.20 paid for the 2015 business year. The company will distribute N752.94 million as gross dividend for 2016 compared with N4.82 billion distributed in 2015.

    With its first loss in three decades, the company blamed the decline on the tough macroeconomic situation and the spiral effects of the devaluation of the Naira.

    Managing Director, Guinness Nigeria Plc, Peter Ndegwa said the company was constrained by the combination of a tough economic environment and challenges with naira devaluation.

    Our performance this year was impacted by two major factors, one being the very tough economic challenges around consumer spending, driving consumer preferences towards value brands across the sector, the other, and more significant factor being the effect of foreign exchange policy and the devaluation of the Naira. When you take out the impact of the latter, our underlying performance for the year was broadly in line with the prior year in spite of the pressure on the top line,” Ndegwa.

    Chairman, Guinness Nigeria Plc, Mr Babatunde Savage, however noted that in spite of the continuing deterioration in the operating environment, the company’s core brands of Guinness Stout and Malta Guinness are in growth.

    He added that the company also has a strong participation in the growing value segment of the market through Satzenbrau and Dubic.

    “We have also started to see early signs that our decisions to acquire the distribution rights in Nigeria to the International Premium Spirits brands of Diageo and to invest in local capacity for spirits manufacturing are the right ones for the business,” Savage said.

  • Marketing Edge holds summit, awards in style

    Marketers need to adopt a multimedia strategy to ensure effective and impactful consumer engagement, the former Chief Executive Officer and Managing Director, Guinness Nigeria, Seni Adetu has advised marketing professionals in Africa.

    Mr Adetu gave this advice on Friday at the 2016 Marketing Edge Awards and annual summit held at the Civic Centre, Lekki, observing that consumers within the planet are becoming more discerning than ever before.

    Speaking on the theme: ‘Brand Positioning in a Digital Age; Challenges in a a Developing Market’, the marketing guru, noted that there is a real transformation happening in the digital space, which marketers need to take advantage of.

    He advised marketers not to consider Nigeria has one country when drawing marketing strategies, identifying differences around lifestyle, language, location and other societal values as factors that could influence consumers’ decision.

    The summit, which brought giants of the marketing profession together, also had discussants like Mrs. Chizor Malie, Mr. Chude Jideonwo and Mrs. Bukola Akingbade.

    Also speaking at the summit, Mr. Chude Jideonwo, co-founder and Managing Partner of Red Media Africa, noted that more and more brands are beginning to listen to ‘the streets’.

    “If nothing has changed between traditional ways of exchanging information and the digital media, the sensitivity has changed. What has changed is the way people engage with information” Mr. Jideonwo said.

    Further speaking about the migration from traditional to digital space, Jideonwo referred to the contemporary consumers as stubborn owners, who you either strategise to satisfy or loss to competitors.

    Speaking on the important roles marketers play, Mr John Ajayi, Publisher and Chief Executive Officer, Marketing Edge Magazine, commended the marketing professionals present at the summit/award night saying: “It is a night of honour and awards for those, who have made this industry what it is.”

    Present at the event include Sir Steve Omojafor, Chairman of McCann Group of companies; Mr. George Thorpe, Managing Partner, Market Space; Mr Gbenga Adefaye, Managing Director, Vanguard Newspaper; Mr. Niran Malaolu, Managaing Director, RockcityFM, among others.

  • Courteville, iSON, Guinness Nigeria, others win Great Place to Work Awards

    Ten companies emerged winners of the ‘Great Place To Work (GPTW) Nigeria awards, over the weekend. These awards include: the Bright Spots award, a new category of awards which was introduced to recognise those organisations that are engaging with their employees, customers and communities in deep and authentic ways. Three organisations were recognised for this award; Courteville Business Solutions, SANOFI Healthcare and iSON BPO.

    Eight organisations made it to the list of Best Companies to Work for in Nigeria 2016. The organisations include: EMC Information System Nigeria Limited, which came tops, Courteville Business Solutions, which also won in the Bright Spots Award category, came second in the Best Companies to Work for in Nigeria. Other companies thst made the list include: Guinness Nigeria which emerged in the third place position, SC Johnson took the fourth position;  Microsoft Nigeria, Poise Nigeria; Konga.com,  and Chemical and Allied Products, in that order.

    This year’s edition, the fourth in the series, also had the “Best Practices Awards”. These are companies that delivered excellence in Corporate Social Responsibility (CSR), People Leadership, Employee Wellness, and introducing a new category under this, the organisation that caters to the needs of Millennials.

    iSON Group, one of the winners in the Bright Sport Awards category, also won the award for excellence in CSR, Konga.com, which came seventh in the Best Companies to Work for in Nigeria, smiled home with the Best Company to work for Millennials. Again, Courteville Business Solutions got the award for excellence in People Leadership while Guinness Nigeria Plc won the award for delivering excellence in Employees’ Wellness.

    The Minister for Industry, Trade and Investment, Dr. Okechukwu Enelamah, who was the Keynote Speaker at the event, described the award as “a welcome initiative and an avenue for inspiring greatness,” and challenged organisations to” rise beyond the ordinary to pursue excellence.”

    While commending Great Place To Work Nigeria for the initiative,  Enelamah congratulated all the winners and awardees, pointing out that it was his desire that the awardees will see the awards, not as an excuse to bask in their accomplishment, but as a challenge to do more and even better and to be role models for others.

    “Individuals, brands and even governments rise and fall on the strength of the trust that people repose in them. The world’s most valuable companies hold much of that value to what experts call brand equity, which in lay man’s term is simply a reflection of the quality of trust they engender in their stakeholders,” Enelamah said.

    He said the Federal Government has prioritised job creation and enhanced productivity, including the provision of an enabling environment for the private sector to thrive in form of

    consistent policies and infrastructure. He also said his ministry was working to provide the support Micro, Small and Medium Enterprises (MSMEs) need to thrive, especially

    since they constitute over 60 per cent of the Gross Domestic Product (GDP). The support, he said, will entail training, capacity building and ultimately financing. “Finally we will also seek to proactively attract investment both local and international,” he added.

    The Chairman of Great Place To Work, Nigeria, Ghandi Olaoye, said: “A Great Place To Work is one where employees trust those they work for, take pride in the work they do, enjoy credibility of management, respect each other and take pride in the organisation they work for”.

    Olaoye, who was represented by a Board member, Kunle Malomo, pointed out that the companies that were recognised were those that have gone over and above, not just the rating by the Nigerian standard, but by the global ratings of Great Place To Work, based in San Francisco, in the US. He said the companies that were rated by their employees through a Trust Index and Culture Audit developed by the organisation, met the minimum requirements of being rated as best workplaces in the country

  • Guinness Nigeria clears air on N1b NAFDAC fine

    Guinness Nigeria clears air on N1b NAFDAC fine

    Guinness Nigeria Plc, the nation’s leading alcoholic beverage manufacturer and a subsidiary of Diageo Plc, has opened up on the controversial N1billion fine imposed by the National Agency for Food and Drug Administration and Control (NAFDAC), saying the company was doing everything to ensure the issues are resolved amicably.

    Giving this insight on Monday was the Chairman of the brewery giant, Chief Babatunde Savage. He spoke at a pre-Annual General Meeting in Lagos.

    It would be recalled that NAFDAC had few weeks ago accused Guinness of allegedly revalidating expired products without authorisation supervision as well as exposing its raw materials to rodents and thus imposed a N1billion fine to be paid within two weeks.

    Savage, who was accompanied by the company’s Managing Director/Chief Executive Officer, Mr. Peter Ndegwa and Director of Corporate Relations and Company Secretary, Sesan Sobowale, said while the circumstances that led to the imposition of the fine was regrettable, it was not a deliberate effort on the part of the company to flout extant rules and guidelines for quality control.

    “As a global company we set store for the ideals of quality, which has earned us accolades from around the globe and even locally from our regulators, including NAFDAC. The material was not even found inside our factory. It was from one our hired warehouses. The raw materials had not even gone through our brewery process. This is just a one-off thing that would be resolved amicably,” he stressed.

    The company, Savage recalled has enjoyed a very cordial relationship with the regulator overtime and was desirous of maintaining that in the future ahead.

    “As a law abiding corporate citizen we’re convinced this matter will be resolved and further strengthen our bond with the regulator,” he emphasised.

    Echoing similar sentiments, Ndegwa, who resumed as the CEO last September, assured that as a global company, it will continue to do everything humanly possible to adhere to highest quality standards.

     

     

  • Guinness Nigeria targets 75% local content, assures on future outlook

    Guinness Nigeria targets 75% local content, assures on future outlook

    By 2018, three-quarters of materials and products from Guinness Nigeria Plc would be developed from Nigerian sources as the Nigerian subsidiary of Diageo Plc moves to deepen its Nigerian root and drive growths with Nigeria-based innovations and resources.

    Guinness Nigeria was established in 1962 with Nigeria being the first country to have a Guinness brewery built outside of the British Isles. It remains one of the earliest listed companies on the Nigerian Stock Exchange (NSE).

    At a pre-annual general meeting media briefing in Lagos, managing director, Guinness Nigeria Plc, Mr. Peter Ndegwa, said one of the priorities of the company is to increase its local content from the current 43 per cent to 75 per cent in the next three years. This will have multiplier effect of increased jobs and opportunities for Nigerian small and medium enterprises and suppliers.

    He outlined that Guinness Nigeria was poised to strengthen and accelerate its premium core brand, support innovation as well as build and constantly extend route to consumers at the right price and right quality.

    Ndegwa, who resumed as the chief executive last September, assured that as a global company, Guinness Nigerian will continue to do everything humanly possible to adhere to highest quality standards.

    It would be recalled that National Agency for Food and Drug Administration and Control (NAFDAC) had few weeks ago slammed a N1 billion fine on Guinness Nigeria as “administrative charge” for alleged non-compliance with certain guidelines on raw materials revalidation and disposal.

    Chairman, Guinness Nigeria, Chief Babatunde Savage, said the company was doing everything to ensure the issues with NAFDAC are resolved amicably.

    He said while the circumstances that led to the imposition of the fine was regrettable, it was not a deliberate effort on the part of the company to flout extant rules and guidelines for quality control.

    “As a global company we set store for the ideals of quality, which has earned us accolades from around the globe and even locally from our regulators, including NAFDAC. The material was not even found inside our factory. It was from one our hired warehouses. The raw materials had not even gone through our brewery process. This is just a one-off thing that would be resolved amicably,” Savage said.

    He noted that the company has enjoyed a very cordial relationship with the regulator overtime and was desirous of maintaining that in the future ahead.

    “As a law abiding corporate citizen we’re convinced this matter will be resolved and further strengthen our bond with the regulator,” Savage said.

    He said board of directors has approved N3.50 dividend per share, totaling N4.82 billion, which represents 62 per cent of distributable profit for the year, adding that the dividend would be paid as soon as it is ratified by the shareholders at the annual general meeting scheduled for Abuja tomorrow.

    While giving performance highlight of the company, Ndegwa said in the period under review, sales continued to grow despite a challenging trading environment, being three per cent ahead of the same quarter last year.

    He noted that despite the sales growth, gross profit declined by 12 per cent due to the impact of exchange rate devaluation, inflation, an increased share of value brands, together with the phasing of costs.

    “Marketing, distribution, administrative and other expenses at N8 billion were two per cent ahead of the prior year. Reported operating profit at N1.4 billion is 50 per cent below the previous year but is significantly impacted by the phasing of costs which is expected to reverse during the rest of the year,” Ndegwa said.

     

  • Guinness Nigeria rallies on N4.8b dividend, Diageo’s acquisition

    Guinness Nigeria Plc, one of the oldest listed companies in Nigeria, recorded the second highest gain at the Nigerian stock market last week as investors reacted positively to the proposed distribution of N4.8 billion to shareholders as cash dividends and announcement of a N41 billion bid by Diageo Plc to acquire additional shares in Guinness Nigeria.

    Shareholders would receive a dividend per share of N3.20 for the immediate past business year ended June 30, 2015.

    Diageo Plc, the parent company of Guinness Nigeria Plc, last week said it has launched preliminary discussions on a bid to acquire additional equity stake to increase its majority controlling stake in the Nigerian subsidiary to 70 per cent.

    In a regulatory filing at the Nigerian Stock Exchange (NSE), directors of Guinness Nigeria said Diageo has approached the board with an intention to make an offer to increase its equity stake in Guinness Nigeria from 54.3 per cent to a maximum of 70 per cent. Diageo will maintain Guinness Nigeria’s listing on the NSE. Guinness Nigeria has notified the NSE of Diageo’s approach.

    In a deal estimated at about N41 billion, Diageo, through its wholly-owned subsidiary-Guinness Overseas Limited; plans to purchase up to 236.18 million ordinary shares of 50 kobo each in Guinness Nigeria at a maximum price of N175.

    With the announcement of the dividend recommendation and the Diageo’s proposed bid, Guinness Nigeria’s share price rose by 18.9 per cent or N24.19 to close the week at N152.19 per share. Guinness Nigeria’s performance is significantly above average week-on-week return of 0.60 per cent recorded by the benchmark index for the stock market.

    The audited report and accounts for the 12-month period ended June 30, 2015 showed that the brewer of Malta Guinness recorded nine per cent increase in sales, although cost headwinds impinged on the net earnings.

    Managing Director, Guinness Nigeria Plc, Mr. Peter Ndegwa, said the results reflected strong volume growth on the back of year-on-year impressive performance of the company’s innovation and value brands.

    “We delivered a nine per cent increase in net sales during the year in a tough trading environment largely driven by the growth in our RTD category and value beer segment. Our gross profit also grew by nine per cent,” Ndegwa noted.

    Turnover rose from N109.2 billion in 2014 to N118.5 billion in 2015. Profit before tax stood at N10.8 billion in 2015 as against N11.7 billion in 2014. Profit after tax also closed June 2015 at N7.79 billion compared with N9.57 billion in 2014. Earnings per share thus stood at N5.18 and N6.36 in 2014 and 2015 respectively.

    Ndegwa attributed the depressed bottom-line to recent significant investments in the company’s products and marketing framework.

    “During the year, we continued to invest significantly behind our brands and our route to consumer expansion and these, together with the high interest environment, have driven a profit before tax decline of nine per cent,” Ndegwa said.

    Chairman, Guinness Nigeria Plc, Mr. Babatunde Savage said the company has been well-positioned to take advantage of improvement in the Nigerian economy.

    “The current economic environment is challenging for all companies but we look forward to an improvement in the operating environment and are positioned to take advantage of improving consumer confidence that may occur as a result,” Savage said.

    Guinness Nigeria doubles as one of the oldest companies in Nigeria and one of the oldest listed companies on the Nigerian Stock Exchange (NSE). Guinness Nigeria built its first brewery in Ikeja in 1962, and currently has facilities in Ogba, Benin City and Aba. It was listed on the NSE in 1965. Guinness Nigeria is a member of Diageo Plc; which is listed on both the London Stock Exchange (LSE) and the New York Stock Exchange (NYSE).

     

  • Guinness Nigeria establishes N10b commercial paper programme

    Guinness Nigeria establishes N10b commercial paper programme

    Guinness Nigeria Plc, the nation’s leading brewer, has said it will be establishing a N10billion Commercial Paper (CP) programme today, with a view to launching its inaugural CP issue under the programme within the first and second week of this month.

    Speaking at the signing ceremony of the initiative at its Ikeja, Lagos headquarters, its Managing Director, Mr. John O’Keeffe, said: “We are very pleased with the successful launch of this Commercial Paper programme for Guinness Nigeria Plc and the support received from our advisors to get us to this point. “This will be the first corporate CP programme to be established in recent times, following the new CBN guidelines coming into effect, and we are pleased to be the first company to take advantage of this opportunity. We look forward to a robust uptake of this inaugural issuance imminently, whilst retaining the flexibility offered by the programme to tap into the CP market again in the nearest future.”

    Speaking at the occasion, Head, Debt Capital Markets, Stanbic IBTC Capital, Kobby Bentsi-Enchill, said Guinness Nigeria has shown industry leadership in taking up the CP.

    He said: “This transaction is a unique milestone event, and represents the first CP Programme to be established by a non-financial institution corporate issuer following the new guidelines on commercial paper from the Central Bank of Nigeria, published in 2009.

    “In that regard, Guinness Nigeria has again clearly demonstrated its innovative approach towards executing the company’s financing strategy, in an increasingly competitive market environment. We at Stanbic IBTC are also proud to have partnered with Guinness on this landmark achievement.”

    Representatives of the transaction advisors which include Stanbic-IBTC Capital Limited and Standard Chartered Securities Nigeria Limited as Joint Arrangers, Aluko & Oyebode as Legal Counsel, KPMG as Auditors to the Issuer, and Standard Chartered Bank Nigeria Limited as Issuing Calculation and Paying Agent, also attended the occasion.