Champion Breweries Delivers Dramatic Turnaround in Q1 2025, Surpassing Full-Year 2024 Profitability

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WaneInvestmentHouse
Community Contributor
Published
03 Mar 25
Updated
28 Apr 25
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165.2% overvalued intrinsic discount
28 Apr
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₦4.6

165.2% overvalued intrinsic discount

WaneInvestmentHouse's Fair Value

Last Update28 Apr 25

WaneInvestmentHouse has increased revenue growth from 6.4% to 13.8%.
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Champion Breweries Plc has delivered a stunning performance in Q1 2025, posting a pre-tax profit of N1.740 billion, a 317.93% year-on-year increase from a loss of N798 million in the same period of 2024. Even more noteworthy, this Q1 profit already exceeds the company’s total profit for FY 2024 by over 36%, highlighting a powerful operational recovery and positioning the firm for a potentially record-breaking year.

Post-tax profit surged by 219.51% YoY to N985 million, reversing a loss of N824 million in Q1 2024 and also surpassing FY 2024 profit by 21%. These gains were underpinned by robust revenue growth of 93.75%, rising to N8.483 billion in Q1 2025, while gross profit more than doubled to N3.991 billion (+169.40% YoY).

Key Highlights:

  • Revenue: N8.483 billion (+93.75% YoY)
  • Gross Profit: N3.991 billion (+169.40% YoY)
  • Profit Before Tax: N1.740 billion (vs. N798 million loss in Q1 2024)
  • Profit After Tax: N985 million (vs. N824 million loss in Q1 2024)
  • EPS: N0.11 (+204.56% YoY)
  • Net Finance Cost: Down 68.77% to N234 million, aided by absence of FX losses
  • Cash & Cash Equivalents: N5.615 billion (+30.25%)
  • Total Assets: N25.011 billion (+17.17%)

The dramatic recovery was driven by faster revenue growth relative to rising costs, as selling and distribution expenses increased modestly by 24.06%. Additionally, net finance costs dropped sharply following the elimination of foreign exchange losses, which had weighed on results in Q1 2024.

One area of concern is the sharp rise in raw material costs, up over 68%, already accounting for more than 44% of the full-year 2024 raw material spend. If this trend continues, it could pose a risk to profit margins in subsequent quarters.

Strong Financial Foundation:

Champion Breweries remains debt-free, with no interest-bearing loans, and is funding its growth organically. With shareholders’ equity accounting for 52% of total assets, the company maintains low financial risk, a significant advantage in today’s high-rate environment.

Market Confidence and Liquidity:

Champion’s stock has returned 4.99% year-to-date, closing at N4.00 as of April 25, 2025. It also enjoys solid trading liquidity, ranking as the 22nd most traded stock on NGX between January and April 2025, with 404 million shares exchanged.

Dividend Clarification:

In March 2025, the company corrected a prior error, confirming a final dividend of N0.06 per share, not N0.60. The payout will go to shareholders on record as of May 9, 2025.

In summary, Champion Breweries has staged an extraordinary recovery in Q1 2025, combining aggressive top-line growth with disciplined cost management and a strong balance sheet. If sustained, this momentum could deliver substantial value for shareholders throughout the year.

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Disclaimer

The user WaneInvestmentHouse holds no position in NGSE:CHAMPION. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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