The gap between Nigerian Breweries Plc, the biggest company quoted on the nation’s stock exchange (measured by market capitalisation) rose further on Friday, as it share price closed at N72.38 each, after chalking 238 kobo at the end of the day’s trading session. Friday’s gain, while bringing the price of NB, Nigeria’s oldest and biggest brewer of alcohol and non-alcoholic beverages (by turnover) closer to its year-high of N76 per share
Following Friday’s gain, the market value of NB surged to N547.378 billion or 9.21 per cent of the day’s total market capitalisation of N5.94 trillion, up from N526.354 billion at the end of August. At last weekend’s value, NB accounted for the bulk or 67.81 per cent of the value of the breweries sub-sector (N807.22 billion), and 2.27 times the worth of arch-rival, Guinness Nigeria (N240.56 billion). NB’s value also made it bigger than the Nigerian Stock Exchange’s sub-sectors such as insurance (with a cumulative value of N158.737 billion); petroleum products marketing (N349.335 billion); conglomerates (N293.758 billion); and building materials (N436.873 billion); among others.
At the end of last weekend, First Bank retained the number two position on the list of 10 biggest company of the Nigerian bourse with a value of N407.574 billion, down from N420.953 billion at the end of August; Zenith Bank closed with a market worth of N392.456 billion, slightly lower also than the N394.653 billion value at the end of last month, and from July’s N446.144 billion. Guaranty Trust Bank was next on the table with N361.183 billion, which was better than the August-end level of N359.084 billion, and down from N391.728 billion.
Analysts link the steady price growth to the company’s latest un-audited result for the half year ended June 30, 2010, when turnover managed to rise by to N88.44 billion, compared with N82.69 billion in the preceding period of 2009.
A report by analysts at FSDH linked the sluggish climb to “the difficult operating environment with increasing cost of operation and higher input cost (which) led to the deterioration in the company’s profitability. However, in (first quarter) 2010, the company became a net-placer of funds in the money market resulting in net financing income of N33.46 million in (first quarter) 2010 from a net financing expense of N74.47 million in (half year) 2009.”
Profit Before Tax fell by 5.5 per cent to N23.28 billion in 2010, from N24.63 billion in 2009, while after tax profit dropped to N15.88bn in Q2 2010 from N16.86bn in 2009.
Reviewing the operating environment, the report noted the strong demand, “for brewery products remain strong in spite of economic downturn and decline in consumer purchasing power,” with a 25 per cent growth in the industry in 2009, according to available data. The impact of this was eroded by the high production cost- rising energy, power and packaging costs.
Commenting on the capitalisation of NB on the NSE, Yusuf Ageni, Public Relations Adviser of the company, noted the premium value placed on it by the investing public.
Fielding questions at the flag off of the third edition of NB’s Golden Pen Award for 2010, Ageni recalled: “We have been declaring interim and final dividend (annually over the past several years),” noting that investment in NB is the best way to store value on the NSE today for those saving for their retirement. At a time when many stocks have lost a huge chunk of their value since the onset of the market meltdown, the share price of NB has grown from N48 each on December 21, 2007, to N30.04 per share, a year later; and closing at N69.60 each, at the end of August, 2010. By September 3, according to data provided by FSDH Securities Limited, NB recorded a year-to-date return of 36.51 per cent, outperforming the NSE’s 16.40 per cent, as well as many on the top 20 table of most capitalised stocks. It however trailed behind other stocks like Sterling Bank’s 54.47 per cent; Benue Cement Company, 51.13 per cent; Ashaka Cement, 90.91 per cent; Julius Berger, 104.46 per cent; and Cadbury, 152.62 per cent; among others.
Ageni linked the sustained confidence in NB to its staying power since berthing in Nigeria in 1946, following which it has continued to wax stronger, besides the fresh capital injection by its parent company- Heineken BV of the Netherlands resulting new investments like the ultra-modern Ama Brewery in Enugu, which is one of the largest in the world; just as there has been reinvestments in the Ibadan, Kaduna and Aba, and Lagos plants.
“Although, the recession has impacted on the purchasing power of Nigerian consumers, we are surviving. NB is a stock you can invest in and be comfortable... and go to sleep with your two eyes closed,
No comments:
Post a Comment