Champion Breweries Plunged by 15% Amidst Free Float Issue

Champion Breweries Plunged by 15% Amidst Free Float Issue

Champion Breweries Plc lost 15% of its market value due to selloffs in the equities market. Investors, shareholders are still reacting to the company’s earnings loss in the first half of financial year 2024.

Its unaudited financial statement showed that the company’s earnings performance slumped significantly, and ended at about N387 million loss in the first half of 2024.

In the comparable period in 2013, Champion Breweries posted 29 million as net profit. Its revenue climbed to N9.544 billion in the first six months in 2024 despite tightening consumer spending. This translates to significant year on year growth of 67.3% when compared with N5.706 billion in turnover the company reported in the equivalent period in 2023.

The company lost N4.94 per share in the first half from 37 kobo in the comparable period.  Investors are looking at the company’s performance with caution as its balance liability triggered FX loss in the period.

Campion Breweries reported that the company’s earnings was affected negatively due to naira fluctuation; losing N911 million year on year.

With inflation pressure in the local market, Champion Breweries Plc’s cost profile worsened. However, its revenue also grew significantly due to its ability to passed higher costs to consumers.

Trading data from the domestic bourse showed that the company share price reduced from N3.26 at the beginning of the week to N2.77 on Friday because shareholders sell down their interest.

Hence, Champion Breweries market valuation settled at N24.785 billion on Friday after losing 15% of its open market valuation at the beginning of the week.

The beer producing company is owned and controlled by two key entities: Raysun Nigeria Limited and Akwa Ibom Investment Corporation.

Champion Breweries said in a regulatory filing that Raysun has 86.36% of its outstanding shareholdings, while Akwa Ibom own 10.06%.

Champion Breweries Plc with a free float value of N980,464,587 as at 30 June, 2024, is not compliant with The Exchange’s free float requirements for companies listed on the Main Board, the company said in a regulatory filing. 

Recently, the share price of the brewer has surged strongly. Analysts explained that stocks with a smaller free float are typically more volatile than those with a larger free float.

This is because, with fewer shares available for trading, a single transaction can have a greater impact on the stock’s price. #Champion Breweries Plunged by 15% Amidst Free Float Issue

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