Mad Returns: Nigerian Breweries gain over 40% in April

Nigerian Breweries Plc is the largest brewing company in Nigeria that serves the Nigerian market and West Africa as a whole. Its share price gained 41.16% in the month of April despite inflationary and disposable income concerns plaguing the Nigerian economy.

The rally seen in April helped push the stock price into the green zone as its Year-to-Date (YtD) performance is now bullish by a little over 14%. The stock price traded in the red in the first quarter of 2022 as it was down 19.10%. In fact, it recorded the first gain in its YtD performance on the 25th of April, when the share price gained over 9%.

The YtD performance of NB Plc ranks the company the 40th on the NGX in terms of year-to-date performance. It is also the seventh best performing stock on the NGX in the last four weeks.

What you should know

  • The company recorded a landmark when the first bottle of STAR lager beer rolled out of its Lagos Brewery bottling lines in June 1949. Since the introduction of Star, the company has expanded its portfolio by introducing a wide range of Non-Alcoholic, Stout and Spirit Drinks. The company currently produces over 20 brands of drinks which are enjoyed locally and globally.
  • A significant jump in the price came after its unaudited first quarter 2022 financial statement was released. The report revealed a stellar performance from the company as it was able to grow its revenue by 30.37% from N105.7 billion in 2020 to N137.8 billion, as the demand for brewery products increased compared to the previous quarter.
  • Although the company significantly increased its marketing and distribution expenses by 62.28%, it was still able to record a 63.72% growth in operating income from N14.50 billion in 2020 to N23.7 billion in 2021. Ultimately, the company recorded a PAT increase of 77.73%, from N7.66 billion to N13.6 billion.
  • For the month of April, the company’s share price grew by 41.16%, from N40.45 at the beginning of the month to N57.1 at the end of the month. The company is trading near its 52-week high of N60 which it recorded in July 2021.
  • NB is the 18th most traded stock on the Nigerian Stock Exchange over the past three months, with a total volume of 251 million shares, in 5,780 deals, valued at N11.9 billion over the period, with an average of 3.99 million traded shares per session.
  • A volume high of 21.4 million was achieved on February 18th, and a low of 41,846 on March 29th, for the same period.
  • Although NB led the gainers for the consumer goods sector for the month of April and also came out as the third best performing stock in the same month, there are others in its sector that have done better in terms of YtD performances.
  • Guinness has gained over 130% in terms of YtD performance. The stock price also came in second best in April for the consumer goods sector and fifth when comparing the performance of the entire NGX in same month.
  • Others include; PZ, up 67.2%, PRESCO, up 63.3%, COURTVILLE, up 42.1%, BUAFOODS, up 35.2%.
  • The company held its AGM and the board approved a total dividend payout of N12.9 billion which comprises of an interim dividend of N3.2 billion earlier paid and the payment of the final dividend of N9.7 billion.
  • At the AGM, the board also approved a proposal that shareholders who are entitled to receive cash dividend for the final dividend payment are offered a right of election to receive ordinary shares in the company, in which if exercised, shall rank Pari Passau in respect with the company’s existing ordinary shares.

The company has shares outstanding of 8,075,831,900.00 units which puts its total market capitalization at N461,130,001,490.00, using its current market price as of Friday’s close.

According to Bloomberg, NB’s P/E Ratio currently stands at 24.59, its Price to Book Ratio (PBR) at 2.4709, its Earnings Per Share (EPS) at 2.32 and its dividend yield at 2.81%

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