International Breweries rose to its highest level in five years this week, as investors bet the brewer’s growth prospects remains steady.
The shares have surged 60.43 percent in the New Year to January 28, compared with a 12.48 percent rise in the Nigerian Stock Exchange All-Share Index, and a 5.44 percent and 5.45 percent increase in the share price of competitors, Nigerian Breweries (NB) and Guinness respectively.
The management of International Breweries recently consummated an alliance with South Africa’s number one brewer, SAB Miller.
According to analysts with the alliance with SAB Miller, International Breweries now has more products in its folds (both alcoholic and non alcoholic) to appeal to a wider customer base.
“The products redesign and promotions advanced by SAB Miller in 2012 had notable positive impacts on International Breweries’ sales, leading to a considerable growth in revenue,” BGL research analysts, said in a note released on January 22, 2013.
Profit for International Breweries for the nine months through September 2012 rose to N1.29 billion ($8.2 million) from N635.3 million a year earlier, the company said November last year.
Revenues rose to N9.1 billion from N6.9 billion.
International Breweries raised N7 billion in 2011 through a rights issue to refinance its debt and buy capital equipment.
Beer consumption in Nigeria, the second-largest beer market in Africa, with annual consumption of 19.5 million hecto litres, grew at a Compound Annual Growth Rate (CAGR) of 9.1 percent between 2000 and 2011, which was ahead of Africa’s consumption growth of 4.6 percent per annum (pa), over the same period.
While Nigeria is one of Africa’s largest beer markets, contributing 15 percent of Africa’s total beer volumes in 2011, Per Capita Consumption in Nigeria at 12.1 litres is still lower than that of South Africa (57.4 litres), Angola(51.7 litres), Cameroon (32.4 litres) or Kenya (12.6 litres), leaving room for further growth in the future, according to Renaissance Capital.
International Breweries has a market capitalisation of N88.7 billion, compared to N1.16 trillion for NB and N427.7 billion for Guinness.