Guinness Nigeria declares double-digit revenue growth, 110% increase in profit

Guinness Nigeria Plc, a subsidiary of Diageo Plc, has declared a 110 percent increase in profit after tax for its fiscal year 2021.

In a statement on Friday, the company said the figure is in its audited results released to the Nigerian Exchange Group (NGX) at the financial year-end. 

It also announced a double-digit revenue growth across all key categories in the period ended June 30, 2021.

Guinness said its revenue increased 54 percent to N160 billion when compared to the corresponding period in 2020.

It said the development is despite the impact of COVID-19 restrictions and ongoing economic challenges.

Speaking on the announcement, Baker Magunda, managing director/chief executive officer, Guinness Nigeria Plc, said the performance of fiscal 2021 showed that the business delivered growth despite the challenging external environment characterized by COVID-19 restrictions and high inflation.

“Revenues grew double-digit across all key categories, particularly our strategic focus brands Guinness, Malta Guinness as well as our local and imported spirits,” he said.

“This was supported by improved product mix and headline price increases in key brands. Gross margins declined by 3% driven by inflationary pressure, a shift towards more expensive can products given at-home consumption trends, and forex devaluation impacting some materials.”

The company disclosed that its operating profit increased by 177 percent benefitting from lapping significant impairments in the prior year and reduced administrative expenses arising from productivity savings.

It also revealed that its net finance costs remained on similar level as last year despite the lower debt position, due to the devaluation of Naira impacting the foreign currency-denominated trading balances.

“Tax was impacted by a one-off historic charge. Profit before tax increased to N5.8 billion, a 134% growth versus same period last year; and distribution expenses increased by 22% versus last year behind volume growth due to efficiency improvements across distribution channels,” Magunda said.

“Going into the new fiscal year, we are conscious of the continued challenging operating environment with double-digit inflation and pressured consumer income spending.

“However, we will continue to focus on our strategy – optimising our route to consumer, innovating at scale to satisfy our consumers and improving cost control – as we continue to emerge stronger from the current crisis. We remain confident about the execution and resilience of our Total Beverage Alcohol strategy as a key driver of sustainable growth in the market.”

Reacting to the development, Omobola Johnson, chair of the board of Guinness Nigeria Plc, assured that the board will continue to support the company’s management in its efforts to sustain global best practices aimed at consistently delivering business growth for stakeholders.

“We remain confident that the strategy is comprehensive and robust and that we are making the right investments in the company to ensure our long-term competitiveness,” she said.