Leading Foods Services Company in Nigeria, Sundry Foods Limited (SFL) has been accorded the national scale long-term and short-term Issuer ratings of A-(NG) and A2 (NG), respectively by international rating agency, Global Credit Ratings (GCR).
SFL’s Head, Marketing, Mr Nduka Mokwunye, said in a statement that the affirmation of the company’s national credit ratings by GCR was contained in the latest reportof the credit rating agency. “GCR Ratings (“GCR”) has affirmed the national scale long-term and short-term Issuer ratings of A-(NG) and A2(NG), respectively assigned to Sundry Foods Limited (“Sundry Foods” or “the Company”). Concurrently, GCR has affirmed the national scale long-term Issue rating of A-(NG)accorded to Sundry Foods Funding SPV Plc’s N2.5bn Series 1 Bonds. The Outlook on the rating has been revised to Positive,’’ the statement said quoting GCR report.
In arriving at its decision, GCR reiterated that the company has sustained a strong earnings trajectory over the review period even as it said that SFL’s revenue almost doubled and outperformed budget.
“This was underpinned by growing customer patronage and higher prices across business segments. Despite persistent inflationary pressure and the recent surge in energy cost, efficient cost control saw EBITDA margin improve to 18.6% in FY21 and 26 percent during 1Q FY22 (FY20:17.8%),’’ GCR said.
GCR further explained that the Sundry Foods’ competitive position is supported by its well-entrenched brands within the fast-expanding Nigerian quick service restaurant sector, noting that the company rolled out additional 40 outlets over the last 12 months to May 2022, bringing its total outlets to 145 across 11 States, thus enhancing market share.
The foremost rating agency emphasized that ‘’the Positive Outlook on Sundry Foods’ ratings reflects its strong growth in earnings and robust cash flows, which have keptgearing metrics moderate, despite the ongoing expansion.’’ GCR concluded that SFL positive outlook will continue to report strong earnings growth and robust cashflow, notwithstanding the inflationary pressures and its potential impact on operating cost.
‘’The rating assigned to our company by GCR clearly reflects our customers’ recognition of our strong focus on product and service quality and the resultant impact on our financial results backed by an acceptable risk management framework, good return on investment and an experienced management team that would be the delight of any investor anywhere in the world’’ the statement said. The Norwegian Fund for Developing Countries (NORFUND) had invested in Sundry Foods back in 2019 as a testament to the Company’s strong fundamentals as an investment destination even in a challenging market like Nigeria, and has been working with the company to improve on its operating, environmental, social and governance standards.