BUA, Guinness, International Breweries, Nascon, Cadbury, Sells Product Faster Than Peers

BUA Foods Plc, Guinness Nigeria Plc, International Breweries Plc, Nascon Allied Industries Plc, Cadbury Plc, Dangote Sugar Refinery, and Nestle Nigeria Plc have sold their products faster than peer rivals, indicating efficient inventory management even amid a challenging environment.

For instance, it took BUA Foods, Guinness, International Breweries, Nascon Allied, Cadbury, Dangote Refinery Plc, Nestle Nigeria Plc recorded inventory turned over their products ratios 84 days, 67 days, 121 days, 122 days,131 days, 143 days, and 146 days on average, which is higher than 155 days industry average, according to data gathered by MoneyCentral.

This means there is more demand for the products these firms offer, but consumer goods companies from a hike in key products which helped compensate for rising input costs in the face of inflationary pressures.

However, some of them fell off the cliff as their ratio was below the industry average as Unilever Nigeria Plc recorded inventory turnover ratio of 193 days; Flour Mills Plc, 297 days; HoneyWell Plc, 250 days, ad Champions Breweries, 156 days.

Inventory turnover ratio measures how efficiently a company uses its inventory by dividing the cost of goods sold by the average inventory value during a set period. A relatively low inventory turnover ratio may be a sign of weak sales or excess inventory, while a higher ratio signals strong sales but may also indicate inadequate inventory stocking.

On average, the average industry ratio improved to 155 days as at June 2024 from 216 days the previous year, which validates the increment in revenue and operating profit, but a huge foreign exchange revaluation losses due to the sudden devaluation of the currency wiped out such gains as over 75 percent of sector players posted a loss after tax.

The average sales of the eleven largest consumer goods firms hit N3.38 trillion as at June 2024, which is 67.72 percent higher than 2023’s N2.01 trillion, according to data gathered by MoneyCentral.

Beset by rising inflation, spiraling borrowing costs, and foreign exchange scarcity, companies’ future profit margins are in jeopardy.

That aggravates investors’ apathy towards consumer goods stocks that has been beaten down.

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