AN ANALYTICAL REVIEW OF THE FINANCIAL POSITION AND REPORTING

OF
GUINNESS NIGERIA PLC

Introduction

This report aims to take an analytical review of the financial position of Guinness Nigeria
PLC. The published financial reports for GN Plc. used are as at 30 th June, 2013, 2012
and 2011, as this is the year end for GN Plc. Nigerian Breweries financial reports for
reporting years 2011-2013 was also used for comparative purposes.

Guinness Nigeria Plc.

Guinness Nigeria is a subsidiary of Diageo (the world's leading premium drinks
business with an outstanding collection of beverage alcohol brands across spirits, beer
and wine) and was established in 1950.
It became listed on the Nigerian Stock Exchange NSE) in 1965. After its first brewery in
Ikeja, Lagos, and Guinness had to build three more major breweries in Nigeria during
the next 30 years following the steady growth in markets for Guinness Stout and Harp
lager.
The company built a second brewery in Benin, Edo State in 1974, where it produced
Harp lager beer. In 1982, a fourth Guinness brewery was built in Lagos to brew Harp
Premium Lager beer. In 2004, Guinness Nigeria inaugurated a new brewery at Aba,
Abia State. (Thisdaylive, 2013).

Financial Ratio Analysis

Profitability Ratios
Figure 1a and 1b reflect the Profitability ratios for GN Plc. And NB Plc.

Figure1a. GN Plc. Profitability Ratios 2011 2013

Figure1b. NB Plc. Profitability Ratios 2011-2013

Efficiency/Activity Ratios

Figures 2a, 2b, 2c and 2d

Figure 2a NB Plc. Efficiency/Activity Ratios I

Figure 2b GN Plc. Efficiency/Activity Ratios - I

Efficiency/Activity Ratios continued

Figure 2c GN Plc. Efficiency/Activity Ratio II

Figure 2d NB Plc. Efficiency/Activity Ratio II

Liquidity Ratios
Figure 3a and 3b

Figure 3a GN Plc. Liquidity Ratios

Figure 3b NB Plc. Liquidity Ratios

Stability Ratios
Figure 4a and 4b

Figure 4a GN Plc. Stability Ratios

Figure 4b NB Plc. Stability Ratios

Investor Ratios
Figure 5a, 5b, 5c and 5d

Figure 5a NB Plc. Investor Ratios I

Figure 5b GN Plc. Investor Ratios II

Investor Ratios continued

Figure5c. GN Plc. Investor Ratios II

Figure 5d NB Plc. Investor Ratios - II

Figure 7 shows 1YR month trend of the share price for NB plc.

Figure 7: NB Plc. 1YR month share trend

Source: http://www.bloomberg.com/quote/NB:NL

APPENDIX
Ratios Calculation
Table 1: Guinness Nigeria Plc. Ratios
Guinness Nigeria

2011

2012

2013

49.66%

36.01%

29.54%

44.51%

47.38%

45.79%

21.46%

18.80%

16.83%

Utilization
-Current Liability)
Non-Current Asset Revenue/Non-current

231.41%

191.52%

175.49%

Utilization

207.24%

150.80%

137.88%

Plc.
Profitability or
Operating
Performance
ROCE/ROI
Gross Margin %
Return on sales/
Operating Profit

Operating Profit/ (Total

Assets Current Liability)
Gross Profit/ Revenue
Operating Profit/Revenue

Margin
Efficiency/Activity
Total Asset

Inventory turnover
Receivables
collect perioddays
Payables Payment
Period - days

Revenue/(Total Assets

assets
Cost of sales/Average
Inventories

4.09

5.57

5.19

44.60

487.22

511.61

145.55

220.56

218.12

0.85

0.64

0.63

Average Trade
Debtors/Revenue * 365
Average Trade
Creditors/Cost of sales *
365

Liquidity
Current Ratio

current assets/current
liabilities

(current assets-StockQuick Ratio

Prepayments)/Current
Liabilities

Total Working

Current Assets - Current

Capital

Liabilities

0.61

0.32

0.36
1903647

-6233119

-16421354

Stability
Gearing
Interest Cover

Long Term Debt/(Long

Term Debt +Equity)
Operating Profit/Interest

(Finance cost)

46.98

14.48

5.72

Investor's Ratios
Earnings Attributable to
EPS (kobo)

P/E Ratio
Dividend Yield
Dividend cover

Ordinary Shareholders
-Given
Market Price Per

1216

Share/EPS
DPS/MPS
EATOS/Dividend

20.15

Declared -Given

1.47

964
26.04

3.37%

793

28.50
3.98%
3.54%

0.01

0.00

Return on
Shareholder's

EATOS/(Ordinary Share

Equity
Market Price (Kb)
Nigerian

Capital + Reserves)

Breweries Plc
Profitability or

46.12%
24500

36.81%
25107

25.77%
22600

2011

2012

2013

Operating
Performance
Operating Profit/
ROCE/ROI

(Total Assets

39.01%

38.74%

45.37%

Gross Margin %
Return on sales/

Current Liability)
Gross Profit/ Revenue
Operating

52.00%
26.72%

49.65%
25.57%

50.81%
25.75%

Operating Profit
Margin

Profit/Revenue

Efficiency/Activit
y
Total Asset
Utilization

Revenue/(Total
Assets -Current
Liability)
Revenue/Non-current

145.98%

151.48%

176.18%

Non-Current
Asset Utilization
Inventory

assets
Cost of sales/Average

118.66%

128.41%

129.47%

turnover
Receivables

Inventories
Average Trade

5.17

5.44

5.83

collect period-

Debtors/Revenue *

days
Payables

365
Average Trade

8.97

19.37

23.20

Payment Period -

Creditors/Cost of

days

sales * 365

134.86

152.63

181.66

0.63

0.65

0.45

Liquidity
Current Ratio

current assets/current
liabilities
(current assets-Stock-

Quick Ratio

Prepayments)/Current

Total Working

Liabilities
Current Assets -

Capital

Current Liabilities

0.38
-33294940

0.36
-29967841

0.24
-55010246

Stability
Long Term Debt/
Gearing

(Long Term Debt

+Equity)
Operating

Interest Cover

32.50%

7.42%

35.16

6.77

9.24

Profit/Interest
(Finance cost)

Investor's Ratios

32.82%

Earnings Attributable
EPS (kobo)

to Ordinary
503

503

570

Share/EPS
DPS/MPS
EATOS/Dividend

18.77
1.32%

29.22
2.04%

26.84
2.68%

Declared -Given
EATOS/(Ordinary

4.06

1.68

1.90

Return on
Shareholder's

Share Capital +

Equity
Market Price

Reserves)

49%

41%

38%

9442

14700

16790

P/E Ratio
Dividend Yield
Dividend cover

(Kobo)

Shareholders -Given
Market Price Per

Glossary
COS
DPS
EATOS

Cost of Sales
Dividend per Share
Earnings Attributable to Ordinary

EPS
GN PLC
MPS
NB PLC
P/E RATIO
ROCE
ROI

Shareholders
Earnings per Share
Guinness Nigeria Plc.
Market Price per Share
Nigerian Breweries Plc.
Price Earnings Ratio
Return on Capital Employed
Return on Investment