Agusto & Co Affirms Sundry Foods A-Rating, Outlook Stable 

Sundry Foods Limited (SFL), the leading food services giant in Nigeria, has received an A- rating from Nigeria’s first rating agency, Augusto & Co, with a stable outlook. This follows the recent A-(NG) long-term and A2 (NG) short-term issuer ratings given to SFL by another international rating agency, Global Credit Rating (GCR). 

According to Nduka Mokwunye, Head of Marketing at SFL, the rating is a result of the company’s strong operational track record in the food services industry, which is driven by a stable and experienced management team. 

Agusto & Co, in its report, stated that the rating reflects SFL’s strong profitability and cash flow, supported by its ongoing business expansion and favorable relationships with customers and suppliers. The report also noted the company’s moderate leverage and satisfactory working capital position. 

Despite the challenging environment of increased inflation, weakening consumer spending, and intense competition in the food services industry, SFL has consistently surpassed the rating agency’s expectations and benchmarks set for similar companies in Nigeria. 

Furthermore, Agusto & Co emphasized SFL’s sustained revenue growth, good asset quality, strong operating profit margin, high return on equity, and experienced management team. In the fiscal year ending 2022, Sundry Foods achieved a return on assets (ROA) of 22.8%, surpassing the benchmark. The company’s return on equity (ROE) of 52.6% significantly outperformed the average yield on government securities and exceeded the benchmark for food services operators in Nigeria. 

The rating agency also highlighted SFL’s first-quarter operating profit margin (OPM) of 17.4%, as well as its annualized ROA and ROE of 37.6% and 79.6% respectively, which remained better than the benchmarks. This underscores the company’s strong profitability in the rating agency’s opinion. Agusto & Co expects SFL’s earnings to continue growing due to the planned addition of 15 new outlets annually over the next five years. 

Commenting on the rating, Ebele Enunwa, the Managing Director of SFL, expressed that the A- rating with a stable outlook from Agusto affirms the organization’s credibility and ability to meet obligations and deliver on its promises. Enunwa emphasized that SFL will continue to leverage its robust working capital position, global best governance practices, and strong risk management framework to create value for its financiers and shareholders.