Nigerian Breweries ₦50 Billion Bill
4 Customs Street: 21 Nov 2022
Good Morning 😃
How are you doing?
Welcome to this week’s edition of 4 Customs Street, our weekly newsletter on the stock market.
The newsletter is divided into two:
Green White Green—focused on the Nigerian stock market.
Star-Spangled Banner—focused on the US stock market.
Green White Green Last Week
Earlier in the week, the company also held an analyst call where management discussed a variety of issues.
As a team, we like to jump on calls like this because it provides an opportunity to gain insight into what’s happening in the real economy. (If you are corporate comms or investor relations, do give us a heads up. Call details are sometimes hard to obtain).
There were a couple of interesting insights from the call.
Following the expansion of its Ama brewery (located in Enugu State) which cost a bit over ₦50 billion. It is now the biggest brewery in Nigeria with a capacity of 4.8 million hectolitres.
Production officially started at the extension six weeks ago (as of last week). It will help dial up premium brands like Heineken and Desperado which have had robust demand. Premium alcohol brands tend to be more expensive (and thus more profitable for brewers).
The move into the energy drink space was taken following consumer demand. Management also stated that in the last five years, the emergence of energy drinks had put sales of soft drinks under pressure.
The goal of the firm is to transform into a commercial beverage company (not just alcohol).
Fun fact: Maltina is the biggest brand by volume for the company.
NB’s bonus
Nigerian Breweries was in the news last week following its analyst call and a proposed bonus of 1 new share for every 4 shares held. Qualification date for the bonus is Tuesday, December 6, 2022. Shareholders are expected to give approval to this at a meeting scheduled for December 8, 2022.
The company opted for the bonus in order to comply with a directive by the Corporate Affairs Commission (CAC) requiring all companies to close the gap on any unissued share in their share capital by December 31, 2022. Had it not gone for a bonus, it would have had to cancel the unissued shares.
Green White Green This Week
Will Federal Palace Hotel have a new owner?
If you are a fairly social person in the city of Lagos, chances are you would have at one time or the other been to the Federal Palace Hotel. Federal Palace (as it is commonly known) is owned by a company called Tourist Company of Nigeria (TCN).
In a few hours from now, the firm will be holding a board meeting to consider an offer to purchase some of its assets.
Star-Spangled Banner Last Week
Elon has a change of heart
After going in gun blazing into Twitter by firing half of its workforce, Elon Musk, Twitter’s new owner, appears to have softened his approach.
Staff can now work remotely if their line manager ensures they are making an excellent contribution. Staff are also expected to have in-person meetings with their colleagues at least once per month.
Since taking over the company, he has had to deal with a rash of resignations. A buoyant labour market at the moment means many staff may opt to leave, rather than work in extreme conditions that Elon is famous for.
https://fortune.com/2022/11/17/elon-musk-remote-work-mandate-twitter-employees-hardcore-office/
Target’s $400 million problem
If you run a retail business, one of the problems you will face is stealing. Stealing by customers and staff.
Target, a retail giant in the US, has a big shrinkage problem. Shrinkage in retail parlance is a term used to describe stealing of merchandise.
So far this year, shrinkage has reduced Target’s gross profit margin by $400 million. Gross profit margin is how much revenue you have left after subtracting the cost of your goods.
Star-Spangled Banner This Week
How Black will Friday be?
This week Friday (November 25) is known as Black Friday. On that day, companies (e-commerce firms in particular) tend to give discounts on goods and services.
How well will they do in terms of sales? Better than last year? Or worse?
Mr Iger is back
As we were rounding up the newsletter, news broke that Bob Iger is back as CEO of Disney following the stepping down of his successor Bob Chapek.
Chapek had signed a three-year contract in June this year, which was to end in 2025. He, however, had a few missteps with the handling of the conflict with Scarlet Johansson’s pay for Black Widow and the "Don't Say Gay" law in Florida.
Iger was the company’s CEO between 2005 and 2020, and is a popular figure at the company. After stepping down as CEO, Iger served as Executive Chairman of the company for eleven months and then resigned, following what some reports termed "a fallout with Chapek."
Iger in his second coming will serve as CEO for two years and work with the company on picking a successor.
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