Guinness Nigeria Perfects strategy for improved performance
The management of Guinness Nigeria is confident that the brewery company will improve on its performance in the current financial year following the approval by its shareholders for a proposed Rights Issue.
This was agreed upon at the company’s Extra-Ordinary General Meeting (EGM) on Tuesday, 24th January 2017 in Lagos, which was attended by local shareholders and representatives of international shareholders. In addition to the Rights Issue, all other company resolutions were passed at the event.
Speaking on the meeting outcome of the meeting, Babatunde Savage, Chairman, Guinness Nigeria Plc, said: “We believe this Rights Issue will positively impact on the financial performance of Guinness Nigeria and help mitigate the impact of increasing finance costs in what continues to be a challenging economic environment in Nigeria.”
Guinness Nigeria Plc which is a subsidiary of Diageo plc, had announced at the end of 2016, its intention to offer a Rights Issue as part of plans to optimise its balance sheet and improve its financial flexibility. With the approval of its shareholders, the company is now in a position to raise up to N40bn as fresh cash injection into the business operations.
This piece of goodness comes as a respite to Guinness Nigeria, following last year’s decision by Diageo International to pull out of a deal to increase its equity stake in the Nigerian company. The deal was planned to inject more capital into Guinness in order to stimulate growth. Diageo cited the challenging market condition in Nigeria for its last minute withdrawal.
Also speaking at the EGM, Peter Ndegwa, Managing Director/CEO, Guinness Nigeria Plc said that the company has good fundamentals and potentials for the future. “Guinness Nigeria is a company with excellent fundamentals and we have the right strategy and the right people to grow our business for the future. This Rights Issue in combination with our productivity and cost optimization drive will help provide the fuel to continue to build this business for Nigeria and Nigerians.”
In September 2016, Guinness declared a net loss of N2bn in its 2015/2016 full-year results which ended in June 2016, blaming it on a weak economic environment and foreign exchange headwinds.
Guinness Nigeria Plc last year became the first total beverage company in Nigeria when it acquired rights to distribute international premium spirits like Johnnie Walker and Baileys in Nigeria in January 2016 and later commissioned a spirits line for locally manufactured spirits at its Benin plant in November. This week, the company is also expected to release its first half results for the 6-month period ended 31st December 2016.
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