Guinness rises 4.13% on outstanding 3MFY16 performance

by **Cals** Wed 20 Jan 2016, 18:15

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[size=28]Guinness rises 4.13% on outstanding 3MFY16 performance[/size]

By Sangeetha Amarthalingam / theedgemarkets.com | January 20, 2016 : 11:22 AM MYT

KUALA LUMPUR (Jan 20): Shares of Guinness Anchor Brewery ([size=16]GAB ([You must be registered and logged in to see this image.] Valuation: 2.10, Fundamental: 2.30)) rose 4.13% this morning, following its outstanding performance with net profit soaring 19.3% and a 50 sen dividend declaration in its three months quarter ended Dec 31, 2015 (3MFY16).

At 10.44am, the counter went up 54 sen to RM13.62, after paring gains at 56 sen, on thin trade, with shares of 39,100 exchanging hands, for a market capitalisation of RM3.95 billion.

Yesterday (Jan 19), the brewery said it posted net profit growth to RM90.84 million or 30.07 sen per share from a year ago, due to improved cost efficiency, phasing of expenditure for certain commercial programmes that will only take place in the following quarter and higher sales.

Revenue grew a marginal 0.72% to RM524.55 million in the quarter under review, from RM520.77 million the same period last year, GAB said in a filing with Bursa Malaysia.

"Despite higher sales driven by the Chinese New Year sell-in, the underlying growth was partially offset by the replacement of [the] sales tax by the goods and services tax," it added.

The board declared a single-tier special dividend of 30 sen per 50 sen stock unit, on top of the single-tier interim dividend of 20 sen, giving a total dividend of 50 sen for the financial period ending Dec 31, 2016, payable on April 15. The ex-date is March 18 and entitlement date is March 22.

GAB changed its financial year from June 30 to Dec 31. As a result of the change, the financial statements for 2016 will be for a period of 18 months, beginning July 1, 2015 and ending Dec 31, 2016.

Meanwhile, in its six months ended Dec 31, 2015 (6MFY16), net profit rose 17.7% to RM153.94 million or 50.96 sen per share, on the back of a revenue of RM929.5 million, up 1.3%, from a net profit of RM130.71 million and revenue of RM913.9 million last year.

Group revenue increased by 1.7% to RM929.55 million, compared to the same period of last year, mainly driven by higher. Meanwhile, group profit before tax grew 16% to RM202.14 million, due to improved cost efficiency in commercial spend, it said.

Incidentally, the exceptional performance was above several analysts’ expectations.

“GAB’s 1HFY16 earnings grew by 17.8% yoy to RM153.9m. This came above expectations, accounting for 69% and 68% of our and consensus estimates. We attribute this to the upcoming Chinese New Year festivities and better cost controls. We upgrade the stock from a “Hold” to a “Buy” call, with a higher DCF-derived target price of RM15.58, from RM14.05,” said AffinHwang IB Bhd.

Kenanga IB Bhd ([You must be registered and logged in to see this image.] Valuation: 1.50, Fundamental: 1.80) maintained its “outperform” call on the stock with a raised target price of RM16.36, from RM15.36, in line with the earnings upgrade, after rolling over its valuation base to financial year 2017E, from FY16E.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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