When shareholders meet at Champion Breweries Plc’s 44th Annual General Meeting on Friday July 3, 2020 in Uyo, Akwa Ibom State, one of the things they will laud the board and management for include the improved results for the year ended December 31, 2019.
Champion Breweries Plc is involved in the brewing and marketing of Champion Lager Beer and Champ Malta. It also provides contract brewing and packaging services to Nigerian Breweries Plc, a related party within the Heineken group.
The company’s results were positively impacted in the financial year ended December 31, 2019 as shown in its top-to-bottom line figures. Revenue grew from N4.8billion to N6.9billion. Operating profit changed its narrative from a negative position of N223million in 2018 to a positive position of N241million in 2019.
Profit Before Tax (PBT) printed at N206.7million in 2019 as against Loss Before Tax (LBT) of N255.4million in 2018. Profit after income tax (PAT) increased to N168.5million as against loss after tax (LAT) of N263.8million in 2018. The Directors did not recommend any dividend during the review year.
“Our performance in 2019 reflects the successful execution of our strategy, as well as the relevance of our unique diversified footprint and premium brand portfolio, led by Champion Beer”, the company said in its report at the Nigerian Stock Exchange (NSE).
“We will not share away from the fact that increased stiff competition and huge cost in production and operations have remained a major challenge in the attainment of our sustainable goal”, said Elijah Akpan, chairman, Champion Breweries Plc.
He said, “Our investment in power generation by way of utilization of gas has begun to pay off as significant savings have resulted as well as improved efficiency in our model of operation in recent times.”
“The board remained resolute in working with management on strategies to grow the business and would lean on the shareholders continuous support towards the capitalisation of the company,” Akpan said.
In 2018, the company embarked on a capital re-structuring scheme. The shareholders through a special resolution approved for the balance of N8.574billion in the Company’s Accumulated Loss account as at December 31, 2017 to be transferred to the Company’s Capital Reduction Account (CRA). Consequently, the share premium account was reduced by the N8.574billion in the CRA by writing off the losses of the Company in the CRA.
Subsequently, the Company obtained court approval on October 23, 2018, Corporate Affairs Commission (CAC) approval on December 6, 2018, and a letter of no objection from the Financial Reporting Council of Nigeria (FRCN) on December 19, 2018.
The Securities and Exchange Commission (SEC) was also duly notified of the capital restructuring scheme. Upon approval, the Company reduced its accumulated loss and share premium account by N8.574billion.
The Company currently has an authorised share capital of N4.5billion comprising 9billion ordinary shares of 50 kobo each, and an issued and fully paid shares amounts to N3.914billion comprising 7.829billion ordinary shares of 50 kobo each.
At 88kobo per share which its shares closed last week on the NSE, its market capitalisation on 7.829billion share outstanding is valued at N6.889billion. During the review year, the Nigerian Stock Exchange (NSE) granted the Company additional two (2) years grace period to comply with the 20percent free float requirements of the Exchange.
This extension was subject to the Company holding a “facts behind the figures” session to brief the market of its plans to cure its free float deficiency; and submitting quarterly compliance reports to the Exchange.
In order to comply with these conditions, the Board of Directors initiated necessary steps as at reporting date to ensure that these conditions are met, and more importantly, that the free float deficiency is cured.
As at year end, the Company was not able to increase its free float (2018: increase from 17.2percent to 17.3percent).
Analysis of the company’s shareholding as at December 31, 2019 shows Raysun holds 4.729billion units representing 60.4percent equity stake in Champion Breweries Plc. Assets Management Nominee holds 961.863million units, representing 12.3percent equity stake; Akwa Ibom Investment Corporation (10percent or 786.225million units); while other shareholders account for 17.3percent or 1.351billion units.
Raysun was incorporated in February 2010 as a holding company for Heineken’s Nigerian entities. Champion Breweries Plc said Raysun Nigeria Limited has accepted to sell some of its shares in the Company to minority shareholders through the Nigerian Stock Exchange (NSE) to gradually comply with the 20percent free float requirement of the NSE.
