Investors React Negatively To Cadbury Nigeria’s Return To Profti, N0.16 Dividend

The share price of Cadbury Nigeria Plc fell 9.6% down Monday, just when the board released its December 31, 2017 audited result showing a return from loss in the prior year on the back of a lean growth in sales revenue, which was a far cry from that of its closest rival- Nestle Nigeria for the same period.

That notwithstanding, the result showed improved management of the company, given that profit grew by 201.2%, significantly faster than the 10.34% of sales revenue, based on which the directors are recommending a dividend per share of 16 kobo, representing all of the Earnings Per Share for the period. This is however subject to shareholders’ approval at the next annual general meeting.

Turnover grew from N29.979bn to N33.079bn, the bulk of which was the N29.386bn from domestic sales from N27.365bn, while export sales was N3.693bn from N2.613bn; cost of sales climbed to N25.644bn from N23.119bn; leaving gross profit at N7.435bn, compared with N6.86bn.
Other income stood at N99.337m, helped by gains on disposal of property, plant and equipment fetching N76.793m, with sales of by-products earning N22.544m from N61.301m, as against N15.133m in prior year; as against N76.434m previously; selling and distribution expenses dropped slightly to N5.228bn from N5.595bn; administrative expenses fell to N1.594bn from N2.073bn’ resulting in operating profit of N711.365m from N732.853m.

Finance income, being interest income on bank deposits was flat at N186.915m, compared to N187.78m, just as finance cost, or interest expense jumped significantly to N547.963m, up from N17.798m; resulting in net finance cost of N361.048m, up from N169.982m.
Profit before tax therefore stood at N350.317m, which was a 162.24% improvement over the N562.871m loss in the corresponding full year of 2016; just as income tax expense was N50.319m from a tax credit of N266.468m; following which profit after tax came to N299.998m, from a loss of N296.403m. Total comprehensive income for the year therefore rose to N439.419m, translating to 16 kobo Earnings Per Share, from a N20.101m loss, with the board offering to distribute all of N301.512m.

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