GlaxoSmithKline Consumer Nigeria Plc (GSK Nigeria) on Wednesday June 01, 2016 announced that it had accepted and is recommending for approval to its shareholders, a binding offer from Suntory Beverage & Food Nigeria Limited for the sale of its beverage unit.
The sale will include the manufacturing, bottling, marketing, distribution and selling of Ribena, Lucozade and all assets deployed in connection with the business. Suntory Beverage & Food Nigeria Limited is a subsidiary of Suntory Beverage and Food Limited (“SBF”) of Japan. GSK Nigeria further indicated that the principal terms of the offer will be set out in a circular to shareholders.
If the shareholders were to approve the sale, what remains of GSK Nigeria would be its Wellness, Oral healthcare, Nutrition and Pharmaceutical/Vaccines businesses. The company said it would remain listed on The Nigerian Stock Exchange.
GSK Nigeria has indicated that subject to the completion of the disposal and receipt of the purchase price the company will pay a special dividend. A special dividend of N716mn to shareholders of the company, representing N0.60 (60kobo) per share will be recommended for approval.
“Going by our estimate, the contribution of the drinks business to the total revenue of the company is not less than 35%. There are no clear strategies from the company on how to replace the lost revenue, “said analysts at FSDH Merchant Bank Limited in a June 2016 Equity Research Report.
Financial Performance
The unaudited Q1 2016 result for the period ended March 2016 shows that Turnover (T/O) increased marginally by 2.52% to N7.64bn, compared with N7.46bn in 2015. This increase was mostly as a result of the increased revenue recorded from the pharmaceutical segment.
Revenue from the pharmaceutical segment grew by 28.84% to N2.82bn in Q1 2016. The consumer healthcare segment remains the major contributor to T/O accounting for 63.09% of T/O in Q1 2016. This segment has however been negatively impacted by stiff competition and weak consumers’ purchasing power leading to a reduction in revenue from this segment.
The cost of sales increased by 15.06% to N5.22bn from N4.53bn in Q1 2015. This can be linked to the increase in the prices of raw materials. The cost of sales as a percentage of T/O increased to 68.23% from 60.79% as at Q1 2015.
Selling and distribution expenses fell by 7.80% to N1.47bn in Q1 2016 while administrative expenses rose by 44.50% to N834.03mn. These operating expenses as a percentage of turnovers increased marginally to 30.14% in Q1 2016 from 29.12% in Q1 2015.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
