Champion Breweries grows FY 2016 profit by 587%

…. As shareholders sustain agitation for value creation

Champion Breweries Plc has demonstrated future growth and earning potentials with release of its shareholders with 2016 audited financial result which reflected growth in key measuring indices.

This was coming as cross section of shareholders of the company continue to demand for value from their investment , as the brewing company has maintained non dividend policy even after conceding majority shares to Heineken .
The result for the period ended 31st December 2016 released by the Nigerian Stock Exchange (NSE) on Monday showed that the brewing company’s profit grew by 588 percent to N530.4 million from N77.1 million recorded in 2015.

Champion Breweries was incorporated in Nigeria as a limited liability company on 31 July 1974 and was later converted to a public limited liability company on 1 September 1992.

The Company’s principal activities continue to be brewing and packaging of Champion Lager Beer and Champ Malta as well as provision of contract brewing services to Nigerian Breweries Plc, a related party within the Heineken group.

Heineken, through its wholly-owned subsidiary, Raysun Nigeria Limited, holds 60.7 per cent majority equity stake in Champion Breweries. Akwa Ibom State holds 10 per cent equity stake while other Nigerian shareholders hold 29.3 per cent

The company’s shares currently listed on the consumer goods sector of the NSE consequently fell 5 percent on Monday to close at N2.28 per share.

In 2016, the brewing and marketing company, made a total revenue of N3.9 billion, which increased 10 percent from N3.5 billion posted for 2015. Champion Breweries almost doubled sales of goods which stood at N2 billion as against N1.2 billion in 2015, however, contract brewing and packaging, the second arm responsible for the total revenue of the company dropped to N1.9 billion from N2.3 billion recorded in 2015.

The Company provides contract brewing and packaging services to Nigerian Breweries Plc, a related party within the Heineken group asides from its primary involvement in the brewing and marketing of Champion Lager Beer and Champ Malta.

Further highlights of the brewers operating results shows that Operating profit increased to N617.6 million from N206.8 million, while profit before tax appreciated 203.2 percent to N637.3 million from N210.2 million.

Total Assets for the company declined 4 percent to N9.961 billion from N10.3 billion in 2015, Shareholders fund grew to N7.7 billion from N7.1 billion. Liabilities of the company were also moderated to settle at 2.3 billion from N3.2 billion, while earnings per share increase to 7 kobo from 1 kobo
The company has also obtained the NSE’s approval to undergo restructuring following its free float deficiency of 17.30 percent as against the requirement of 20 percent.

“In other to comply with the free float requirement of the Nigerian Stock Exchange, the Board of Directors have initiated necessary steps to ensure that a minimum of 20 percent of the Company’s issued shares are held by public investors” the company’s directors report read

As at reporting date, The Raysun Nigeria Limited holds the highest percent of the company’s ordinary shares at 61 percent. Asset management Nominee holds 12 percent, Akwa Ibom State Government 10 percent while other shareholders holds 17 percent of the company’s ordinary shares.

The result further showed that Profit before minimum tax stood at N681.28 million, from N248.44 m in the previous year. Champion Breweries in 2016 paid minimum tax of N43.98 million, from N38.26 mi in 2015, while Profit before tax stood at N637.30 million from N210.18 million in 2015.

Income tax expense of N106.91 million was paid by the company against N133.04 million in 2015. Champion Breweries recorded N530.39 million profit, from N77.14 m posted in 2015.

Daily Times recalls that shareholders of Champion Breweries in 2016 during its Annual General Meeting, demanded for value on their investment by urging Heineken, the majority core investor in the Akwa Ibom State-based breweries, to merge the company with Nigerian Breweries to create synergies to deliver greater value for their investments.