Last Update02 Apr 25Fair value Increased 0.08%
Cadbury Nigeria Plc saw its market value surge by 21% in the equities segment of the Nigerian Exchange (NGX) over the past week, as investor sentiment turned optimistic in anticipation of the company’s Q1 2025 earnings release. The stock advanced from ₦22.00 to ₦26.60, with over 1.34 million shares changing hands, amounting to ₦35.3 million in value. This move lifted Cadbury Nigeria’s market capitalization to ₦60.66 billion, although it still trades well below its 52-week high. Cadbury reverses losses with N5.97bn profit
Key Highlights Driving Investor Interest:
- Positive Market Sentiment Ahead of Q1 Results: The rally appears to be a speculative bet by investors ahead of the company’s Q1 2025 results, expected in May. Historically, Cadbury releases unaudited quarterly reports in May, and the price action suggests optimism for improved performance.
- Strong Top-line Growth in FY 2024: Cadbury posted a 60.73% year-on-year revenue growth to ₦129.19 billion in FY 2024, supported by both local and export sales. This marks one of the company’s strongest revenue performances in recent years.
- Persistent Cost Pressures: Despite strong revenue, the company recorded a net loss of ₦10.42 billion due to surging cost of sales, which jumped by 77.18% to ₦111.69 billion. The rise reflects elevated input costs amid Nigeria’s inflationary environment.
- Finance Cost Relief Offers Some Cushion: A notable 40.88% reduction in net finance costs to ₦21.30 billion offered some relief. This was driven by lower foreign exchange losses and a decline in interest expense, signaling a potentially improving capital structure.
- Gradual Reduction in Losses Signals Operational Stabilization: Loss before tax narrowed by 47.10% to ₦14.89 billion, while loss after tax fell by 45.48% year-on-year. Though still negative, the trend suggests operational recovery may be underway if cost control improves.
- Earnings Outlook Key to Sustaining Momentum: The coming Q1 2025 results will be critical in confirming whether Cadbury Nigeria is turning a corner. Investors will be watching closely for margin recovery and signs of expense containment, especially administrative costs, which grew by over 51% last year.
The recent rally underscores growing market confidence in Cadbury’s turnaround potential. However, the company must demonstrate meaningful cost discipline and earnings recovery in its upcoming results to sustain investor interest.
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Disclaimer
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