Seven Up Bottling Plc a producer of carbonated soft drinks recorded revenue growth in the half year ended September 2015, as sales increased by 3.57 percent to N39.46 billion from N38.14 billion last year.
Seven Up’s direct costs to sales increased by 15.16 percent to N27.64 billion from N24 billion the previous year.
The company is spending more to produce each unit of products as cost of sales ratio increased to 69.86 percent in 2015 from 62.92 percent last year.
Gross profits also fell by 15.71 percent to N11.92 billion. Gross profit margins fell to 30.13 percent in the period under review as against 37.74 percent in 2014.
Seven Up’s net income reduced by 26.61 percent to N1.82 billion in 2015 compared with N2.48 billion last year; the slow growth in profit is attributable to a 91.14 percent spike in finance costs to N1.65 billion.
The Nigeria soft drink producer’s net margins, a measure of profitability and efficiency dipped to 4.60 percent in 2015 as against 6.50 percent in 2014.
While Nigeria’s slowing economy has dampened consumer spending with its attendant impacts on manufacturers, Seven Up will continue to dominate the carbonated soft drink industry with its newer product lines which are expected to drive volume growth.
The company’s penetration in the rural areas than urban Nigeria give it higher market leverage than other newer fringe players competing with the products in cities; a strategy analysts expect will improve numbers.
Seven Up’s return on equity (ROE) fell to 7.58 percent in the period under review from 13.62 percent last year.
The company’s share price closed at N183 on the floor of the exchange while market capitalization was N117.22 billion.
