20 June 2012

Tanzania: TBL Revenue Rises 26 Percent

THE Tanzania Breweries Limited (TBL) revenue grew by 26 per cent in the year ended March 31, to reach 801bn/- from 635.86bn/- recorded during the preceeding period.

According to financial results of the period under review operating profit rose 30 per cent from 183.5bn/- whereas cash from operating activities went up five per cent to 226bn/- from 215.6bn/-.

"Other financial parameters indicate that the earnings per share grew to 538/- an increase of 39 per cent unlike the previous year of which the company recorded 387/-," commented Mr Godfrey Gabriel, Investment & Research Officer for Orbit Securities Company.

He said the company closed the year by rewarding shareholders dividend of 200/- per share a dividend yield of 8 per cent as at per current price in the market.

Returns to shareholder also inched up to 46.1 per cent as price to earnings ratio declined to 4.3 times indicating that the shares are relatively cheap compared to other peers in the region, he added.

TBL shares are currently trading at the price of 2,500/- each in the market with more than 1.3 million shares flooded in the market for more than five months now with little appetite from local investors.

However, the appetite from foreign investors has remained high because limit of 60 per cent right to participate in the bourse trading sessions.

"The growth is attributed to increased volumes, improved product mix and below inflationary price increases. Similarly, improved production and distribution efficiencies resulted to a handsome trading profit as indicated in Chairman's statement," he said.

However, local investors have failed to harness fully the benefits of the blue chip company. TBL financial results show that the company is strong and the room for future growth is very high.

"Our internal research revealed that Tanzanian institutional investors, particularly pension funds much as they wish to increase their holding have failed to do so because of other social obligations and others have approached their limited exposure to listed companies," he added.

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