N38bn dividend: NB’s shareholders to reap highest returns in 70 yrs

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Shareholders of Nigeria Breweries, NB Plc will smile home as the Board of Directors of the company has concluded arrangement to declare the highest dividend since its existence in Nigeria.

Nigerian Breweries has consistently added value to shareholders’ investments with its dividend payouts. It would be recalled that for the 2013 financial year, the company’s board had recommended the payment of a total dividend of N34, 032, 169, 944 (thirty four billion, thirty two million, one hundred and sixty nine thousand and nine hundred and forty four naira only), that is, N4.50 (four naira fifty kobo) per ordinary share of fifty kobo each.

At the company’s 69th Annual General Meeting held last year in Lagos, the shareholders of the company were full of praise for the company’s management, especially for the recommendation of a total dividend of N37.205billion.The amount represents a payout of N4.75 per ordinary share of fifty kobo each.

According the shareholders, the company’s performance in spite of the challenging operating environment stood out as a shining example for other manufacturers to emulate.

Addressing the Shareholders at the Annual General Meeting, Chief Kola

, Chairman Board of Directors, said the board had earlier paid an interim dividend of N9.453billion, representing N1.25 per ordinary share of fifty kobo each in October 2014.

Nigerian Breweries has continued to excite both its shareholders and stakeholders with its results. For the half year ended June 30, 2015, the company reported revenue of N151.7 billion. This shows an increase of 7.2 per cent above the N141.5 billion recorded in the corresponding period of 2014. The company ended the period with a gross profit of N30.99 billion and the profit after tax stood at N21.5 billion.

According to the company, the results reflect the prevailing operating environment in the country, saying it looks to an improved operating environment in the remaining half of and expressed confidence that it is in a position to take advantage of any upswing in the market.

Currently, Nigerian Breweries is the second most capitalised company on the Nigerian Stock Exchange (NSE). The company paid out a total dividend of N37 billion (N4.75 kobo per ordinary share of 50 kobo each) for the financial year ended December 31, 2014.

Also last week, Investors in the Nigerian stock market smiled home as the market rallied for five straight days to close the week in the green.

Specifically, the bullish run experienced last week on the Nigerian Stock Exchange, NSE was buoyed by investors’ drive to take position ahead of probable positive earnings release by listed companies. Already, two companies, Forte Oil Plc and Nigerian Breweries Plc, NB Plc have declared dividends for the 2015 financial year, while more are being expected to announce their performance in the days ahead.

The Board of Directors of  NB Plc specifically announced a 10.3 per cent increase in revenue from N266 billion recorded in 2014 to N293 billion in the 2015 financial year.

The 2015 audited results filed with the NSE show that the company’s shareholders would enjoy a total dividend of N4.80 (Four Naira Eighty Kobo) per ordinary share of fifty kobo each for the 2015 financial year. If approved by shareholders at the upcoming Annual General Meeting, AGM. The amount would be the highest dividend ever paid by the company in its 70 year history.

The company had earlier paid an interim dividend of N9.5 billion that is, N1.20 (one naira twenty kobo). Thus, the final dividend will be N28.5 billion that is, N3.60 per share (three naira sixty kobo). According to the statement, the proposed final dividend will be subject to deduction of withholding tax at the appropriate rate and will be payable on the 12th of May, 2016, to all shareholders whose names appear on the Company’s Register of Members at the close of business on the 2nd of March, 2016.

A look at the audited results show that Results from Operating Activities closed at N62 billion in 2015 while Profit before Tax stood at N54 billion in the same period. Profit after tax was N38 billion

The statement signed by Mr. Uaboi Agbebaku, Company Secretary and Legal Adviser, says that the Company was able to achieve strong results and deliver good return on investment to shareholders due to its twin agenda of Cost Leadership and Market Leadership supported by Innovation. The statement adds that 2016 will see a continuation of the tough operating environment of 2015, but barring any unforeseen circumstance, the Board remains confident that with the company’s strong portfolio and its Cost Leadership agenda, it should be able to take advantage of any upswing in the market.

The issued and fully paid-up Share Capital of the Company as at 31st December, 2014 was 7,562,704,432 Ordinary Shares of 50 kobo each. The Register of Members shows that three companies: Heineken Brouwerijen B.V. holding 37.73%, Distilled Trading International B.V. holding 16.36% and Stanbic Nominees Nigeria Limited holding 16.27% held more than 10% of the Company’s issued share capital as at the said date.

According to the 2015 corporate rating report by Augsto and Co.,  the company possesses very strong financial condition and very strong capacity to meet local currency obligations as and when they fall due. The rating Augosto maintained,  is underlined by the company’s dominant position in the Industry; highly experienced and stable Board of Directors; and competent management team. The rating is also supported by NB’s strong financial condition which is validated by good profitability, low leverage, good cash flow and adequate working capital.

“As at the end of 2014, NB’s turnover decreased slightly by one per cent  to ¦ 266 billion but its profit before tax margin remained strong, while its three-year weighted average return on equity of 46 per cent and three-year average profit before tax as a percentage of sales ratio of 23 per cent are well above our benchmarks. In the same vein, cash flow indicators such as operating cash flow as a percentage of sales (35 per cent) and operating profit margin (25 per cent) surpass our expectations. Leverage remains low, with 86 per cent of liabilities as non-interest bearing. The company’s interest cover is also very good at 17 times,” the rating agency said.

The shares of NB Plc were admitted to trading on the floor of NSE  on 5th September, 1973. Currently, NB Plc is the second most capitalised company on the Nigerian Stock Exchange.

With about 114,566 shareholders as at 30th September, 2015, the authorised share capital of NB Plc is N4billion, divided into 8 billion shares of 50kobo each.

The issued share capital as at 30th September,2015 stood at N3,964,550,444 divided into 7,929,100,888 ordinary shares of 50 kobo each. Heineken N.V has a majority shareholding of approximately 54.29% while 45.71% is held by Nigerian and foreign individuals and associations.

The company paid out a total dividend of N37,205,233,648(that is, N4.75kobo per ordinary share of 50 kobo each) for the financial year ended 31st December, 2014.

Nigerian Breweries Plc is a subsidiary of the internationally established Heineken N.V. of the Netherlands, having 54.10 per cent stake in the equity of Nigerian Breweries and is the largest brewing company in Nigeria.

It was originally incorporated, as ‘Nigerian Brewery Limited’, on November 16 1946. Three years later; it recorded a milestone, producing its first bottle of STAR Lager from its Lagos Brewery. In 1973, Nigerian Breweries became a public company and was officially listed on the floors of The Nigerian Stock Exchange (NSE) on September 5, 1973.

In October 2011, the company acquired majority equity interests in two companies, Sona Systems Associates Business Management Limited (Sona Systems), with two breweries in Ota and Kaduna, and Life Breweries Company Limited (Life Breweries) with a brewery in Onitsha. Sona Systems and Life Breweries were merged with the Company in the middle of 2012.



 

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