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Friday, August 26, 2005

East African Breweries Limited (EABL) Announces 2004/5 Results

Gross Turnover: KShs 34.8 Billion +16%
Net Turnover: KShs 19.3 Billion +16%
Profit Before Tax: KShs 8.6 Billion +22%
Profit After Tax: KShs 5.8 Billion +22%
Earnings Per Share: KShs 7.24 +23%
Dividend Per Share: KShs 4.50 +29%

Price Aug 26 2005: KShs 155.00

Management seems determined to expand their range of products BUT they have not indicated regional expansion. EABL {then Kenya Breweries Limited (KBL)} sold off their holdings in Seychelles as part of the restructuring process in the 1990s. In addition, EABL swapped 20% of KBL in exchange for 20% of Tanzania Breweries Ltd (TBL).

Management has decided to expand into non-alcoholic beverages since they:
  1. Have excess bottling capacity
  2. Have a well established distribution network
  3. Own Central Glass Industries who manufature bottles & jars
  4. Have too much cash which they want to redeploy
I believe growth in turnover & profits will continue because they:
  1. Continue to rationalise costs even further
  2. Plan to outsource distribution to retail centers
  3. Continously improve on their plant
  4. Maintain their brand name & quality
  5. Introduce new products e.g. Smirnoff Black Ice



Anyway, me thinks that EABL is overpriced.

2 comments:

Orkoiyot said...

Cold, pls indulge my ignorance. What do you mean when u say Dividend per Share= 4.50 + 29%. What's the 29% about?

coldtusker said...

Sorry for my delayed resonse but the dividend was UP by 29% over a similar period last year.