Guinness shares hit all-time low after revenue warning

Guinness Nigeria

Shares of Guinness Nigeria traded at N13.95 on Thursday, an all-time low as investors dump shares of the beer maker after it released a profit warning ahead of its full year financial result release.


Diageo-owned Guinness Nigeria plc on issued a revenue warning ahead of the release of its full year audited financial result for the period ended 30th June.


According to the brewer, the adverse impact of the sharp contraction in economic activities and the knock-on effect of the COVID-19 lockdown took a toll on the on-trade segment of its business across all markets with production and revenues been negatively affected.


The brewers of Origin drink said it carried out a comprehensive review of its asset base and made a strategic decision to impair a certain category of assets, which were generating suboptimal returns, in line with the company’s long-term strategy of delivering value to shareholders.


“Due to a combination of the impact of COVID-19 and the asset impairment, we expect the profitability of the Company for the Financial Year to 30th June 2020 to be impacted. The Company’s balance sheet however remains strong, and this gives the Board the confidence that the Company has the right resources to continue to deliver the strategy,” the statement said.


The audited financial results for the Year as approved by the Board will be published in accordance with extant rules and guidelines after the completion of the year end audit in the month of August 2020.


Guinness reported revenue of N96.08 billion for the nine months that ended March 31, 2020, showing a fall of 5.3% compared with N101.40 billion recorded in the corresponding year of 2019.

In addition, financing cost rose by 97% to N3.582 billion compared to N1.817 billion recorded in 2019. Guinness Nigeria PLC ended the period with a profit after tax of N1.672 billion, plunging by 60% from N4.252 billion recorded in 2019.

On Thursday, the company’s market capitalization was N30.6billion, its price to book ratio, which is valued at 0.3571 and a dividend yield valued of 10.86percent showed the stock was highly undervalued with great potential in the long term.

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