Guinness Nigeria (‘Guinness’ or ‘the Company’) delivered a stellar performance in FY 2022. The Company recorded a 29% year-on-year revenue growth to N206.82bn. Gross profit grew by 59% YoY to N72.66bn while operating profit grew by 135% YoY to N24.35bn. 

Supported by lower finance costs (-54% YoY to N2.13bn), Guinness’ profit after tax grew by 12x to N15.65bn or N7.15 earnings per share. Given the strong profitability, the Company declared a N7.14 dividend for FY 2022 (FY 2021: N0.46), which translates to a 100% payout.  The dividend qualification date is on September 26, 2022, while the dividend payment date is on October 26, 2022.

Marginal Volume Growth, But Higher Prices Spur Topline Growth

Our estimates revealed that the Company’s volume sales grew by 1% in FY 2022, with the pressure coming from the beer category which declined by 7% YoY. We note that the beer category accounted for 22% of total volume sales for the fiscal year. Volume from the Malts category was flat while volume from the Spirits category grew by 3%.


We expect the Company to continue experiencing challenges with volume growth due to the weak state of the economy, specifically relating to dwindling household purchasing power. Based on our assessment, we classify the products in the brewery industry as elastic. Hence, we expect consumers to react negatively to higher prices. However, we continue to see higher prices offsetting weak volume growth in the near term. In the medium term, we see significant headwinds to topline growth unless the macroeconomic situation improves.

The key triggers of earnings growth in the near term include i) sustained competitive advantage and near monopoly in the high-margin Spirits category ii) higher product pricing to protect margin erosion iii) results from prior investments in route-to-market iv) higher volume sales in the Malts category due to capacity expansion and growing market.

We forecast a 16% revenue growth in FY 2023 to N239.01bn, while we expect a flat net margin due to the impact of inflationary pressures and higher raw materials costs. Our fair value estimate for the stock is N119.20. Based on our estimates, we estimate a 47% total return for the stock (inclusive of an 8% dividend yield). We recommend a BUY for the stock at current market prices.

Please follow the link “Guinness Nigeria Plc FY 2022 – Effective Pricing Initiatives Drive Sales in FY 2022”  to view the whole report.

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