CHAMPION BREWERIES: Operational Efficiency boost Growth

INVESTMENT HIGHLIGHT

Champions Breweries Plc (“The Company” or “CB”) released its Q3 2015 unaudited statement of comprehensive income for the nine months ended September 30 2015 on October 23 2015.  The Company recorded a 387% hike in turnover YoY. The result was impressive given the toughened macro-economic environment and weak consumer discretionary spend during the quarter under review. CB has continued to benefit from its 2014 capital injection through the issuance of 6.3bn units of ordinary shares of N11bn ($55ml) through rights issue. The success of this issue enabled CB eradicate finance cost charges which consequentially eroded profitability in the same period of the prior year.

A YoY analysis of the Company’s Q3 result highlights a 3.94% growth in turnover from N2.18bn ($0.01ml) to N2.27bn ($0.011ml) PBT was up by 104.66% to N62.59ml ($0.31ml) in Q3 2015 from a loss position of N1.344bn ($0.0067ml) recorded in Q3 2014. Similarly, PAT YoY skyrocketed by 103.26% to N43.81ml ($0.22ml) from a loss position of N1.344bn ($0.0067). The YoY substantial growth experienced is on the back of The Company’s operational efficiencies which enabled the eradication of finance cost which trapped the company in a loss position over the last five years.  

Furthermore, Q3 2015 shareholders’ equity grew by 20.58% from N5.87bn ($0.029ml) to N7.08bn ($0.035ml) YoY, while EPS widened by 100.37% from a loss position of N149.38 ($0.74) to N0.56 ($0.0028). The company’s share price has shed 58% which equates to N4.17 ($0.021) in Q3 2015 compared to the N9.94 ($0.05) recorded in the same period in the prior year.

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