Rating Release
Agusto & Co. hereby affirms the A- rating assigned to Sundry Foods Limited
The rating expires on 30 June 2024.
Agusto & Co. hereby affirms the A- rating assigned to Sundry Foods Limited (“Sundry Foods”, “SFL” or “the Company”). The rating reflects the Company’s good profitability and cash flow, upheld by its continued business expansion and favourable terms with customers and suppliers, as well as its moderate leverage and satisfactory working capital position. The rating further considers SFL’s sturdy position in the Nigerian Food Services Industry (“the Industry”) and its stable and experienced management team. However, the rating is constrained by the heightened inflationary environment, particularly the persistent food price hikes (with Nigeria’s food inflation rate rising to 24.61% in April 20231 from 18.37% in April 2022). Also, the weakening consumer wallets and the stiff competition in the Industry moderate operators’ ability to adequately push cost increases to customers.
Sundry Foods Limited is one of the leading players in the Food Services Industry in Nigeria. The Company started as a maker of bakery products in 2004 and currently owns four food brands – Kilimanjaro restaurants, Pizza Jungle, Kiligrill and Nibbles Creamery in addition to its bakery brand – Nibble Bakery. SFL also provides canteen and catering services to corporate and private entities. The Company had 162 outlets (as at 31 March 2023), consisting of restaurants and bakeries and 16 staff canteens.
The opinions expressed in this rating release do not represent any investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.
