Champion Breweries FBF&9M 2024
Champion Breweries held a facts behind the figure session on the NGX and released its results for the nine months ended September 2024.
About the company
Champion Breweries Plc ,was incorporated in Nigeria as a limited liability Company on 31 July 1974. On 1 September 1992, it was converted to a public company.
The Company is involved in the brewing and marketing of Champion lager beer, Champion Ginger beer, Champ Malta & Champ Malt with Butter Cookies and Champ Malt with Tigernut.
The company also provides contract brewing and packaging services to Nigerian Breweries Plc, a related party within the Heineken group.
Results
In Q3 2024 (July to September), it made ₦4.4 billion in revenue and ₦408 million in profit after tax.
In 9M 2024, it made ₦14 billion in revenue and ₦21 million in profit after tax.
The goal
The firm intends to issue new shares to the public in order to achieve a free float of 20% by Q1 2025. Free float means the proportion of shares a company has that can easily be traded. At the moment, Enjoycorp and the Akwa Ibom government are the majority shareholders
Enjoycorp bought Heineken’s stake in June and holds an 86.1% stake making it the core shareholder. Akwa Ibom state government
Unmet demand
Management says there's demand in the market that it is unable to meet. The capital raise will help with that. This is a problem the firm has struggled with for a couple of years, more so being a regional player.
What's in it for shareholders?
Enjoycorp the majority shareholder has committed to paying a dividend every year. Shareholders got a bonus in the current financial year.
My thoughts
Q3 2024 earnings per share was 4.56 kobo.
9M 2024 earnings per share was 24 kobo.
If you are using annualized earnings for FY 2024, full year earnings should come to at least 28 kobo. It very likely will be more. Last quarter of the year is typically bumper for brewers. Lots of festive activities mean more drinking.
At 28 kobo earnings, the stock is trading at 12 times earnings. That's way lower than the average PE of 22 times earnings on the NGX.
For 9M 2024 ( nine months from January to September 2024), the firm had ₦945 million in fx losses. Every player in that space dealt with this. A stable (or “stabler” exchange rate means profit should go up much higher.
In some ways the firm has an advantage compared to the big 3 players in the space (International Breweries, Nigerian Breweries and Guinness Nigeria. Clean balance sheet. Regional player so it is small and nimble.
There should be a bit more colour in the coming months as to how many shares w
ill be issued and forecasts of a sort.