Cadbury Nigeria Posts Strong 2025 Recovery, But Sustainability is Key
Following consecutive years of significant losses, Cadbury Nigeria Plc has announced a decisive financial turnaround in its 2025 unaudited full-year results. The company reported a substantial 31% surge in revenue, powered by the robust performance of its core brands in the Nigerian market. This growth culminated in a net profit of N12.1 billion, a stark reversal from the N22.2 billion loss recorded in the prior year, marking the company’s first profitable period in two years.
Foundations for Growth Amid Underlying Concerns
While the revenue increase establishes a foundation for recovery, a detailed analysis reveals Cadbury Nigeria remains in a nascent phase of its rebound. Gross profit margin improved to 21.6% from 14.1%, yet a net profit margin of 7.1% indicates considerable room for operational enhancement. The company continues to carry retained losses of N25.2 billion, a burden that, at the current profit rate, would require approximately two more years to fully eliminate. Furthermore, a current ratio of 0.71 signals potential liquidity constraints, necessitating prioritized and efficient management of working capital to avert future cash flow problems and build on the current momentum.
The broader economic landscape requires prudent navigation. Just as the Kano Govt revokes titles for public interest and troops dismantle six illegal refineries to secure resources, corporate entities must also enforce disciplined internal controls. In a similar vein to Tinubu urges Nigerians to persevere through economic reforms, Cadbury’s management must guide the company with strategic foresight. The focus must now shift to expanding profit margins, reducing financial leverage, and tightening liquidity management to transition from recovery to sustainable, efficient growth.
Market Confidence and the Path Forward
The equity market has responded with marked optimism to the turnaround story. Cadbury’s stock price soared by 178% in 2024 and has continued to appreciate in 2025. However, the company’s market capitalization of N146 billion significantly outpaces its net asset value of N16.5 billion, reflecting high investor expectations for future performance. This valuation, much like the prestige when Pele’s brand acquired global recognition, is predicated on potential. To justify this confidence and eventually resume dividend payments, Cadbury must establish a stronger track record of profitability and capital efficiency. The recovery is promising, but the work to ensure its longevity is far from complete.
