GUINNESS is a subsidiary of
Diageo Plc, a famed brewer of long-running brands with strong presence in 180
markets across the world. It boasts of
leading brands such as Guinness Foreign Extra Stout, Malta Guinness, Harp Lager
Beer, McDowell's, Smirnoff Ice and Origin Spirit Mixed Drink. Diageo Plc
controls 58% of the company.
Product
relaunches and quality improvement assisted by Diageo Group have helped it
carve a niche for itself in the Nigerian market. Besides, management has been
unrelenting, continuously innovating and creating brand awareness through
robust promotional campaign and strong community presence.
Investment
Thesis
GUINNESS acquired the right to
market the brands of its parent company (Diageo Plc) such as Baileys, Gordons,
Captain Morgan and Johnnie Walker in Nigeria. This has broadened its product
portfolio and is expected to improve its earnings going forward.
Earnings
growth has been unstable over the past seven years. Turnover appreciated by 6.5%
while Profit After Tax (PAT) depreciated by 4.8% on a 3-Year CAGR basis. Marketing
and distribution expenses jumped from NGN25.3 billion to NGN26 billion,
representing a 2.9% hike.
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