East African Breweries - Analysis of It's Business & Financial Performance

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. Introduction. 1.1 Brief company overview Established in 1922 and with its headquarters in Nairobi- Kenya, East African Breweries Ltd. (EABL) is aleading branded alcohol manufacturing company in the East African region engaged in the marketing,brewing and selling of alcoholic and non- alcoholic drinks as well as the manufacturing of glass containers.Majority owned by Diageo, it consists of a number of subsidiaries.1 1.2. Research rationale. Compared to their counterparts in the developed world, little research has been carried out on organizationsthat operate in African countries as these are seen as lacking the management capacity or financial resourceseither to compete with larger organizations in the developed world or to interest international investors. However the events of the last two years, which have seen investors lose millions of dollars in theirinvestments due to the collapse of the international financial markets, have increased the need forinternational investors to diversify their portfolios into regions hitherto considered unimportant. By carryingout a critical business and financial evaluation of the performance of a typical large African organization, thisreport attempts to highlight the missed opportunities that may remain untapped in emerging markets. With annual revenues of KES 21 billion (US$ 285 million), KES 26 billion (US$ 367 million) and KES 32 1The subsidiaries include Kenya Breweries Ltd., Uganda Breweries Ltd., Kenya Maltings, UDV Kenya and CentralGlass Industries. The company also holds a 20% stake in Tanzania Breweries Ltd. (EABL, 2008a p.85) - 2 - © 2009 PK Mwangi Global Consultingbillion (US$ 479 million)2in FY06, FY07 and FY08 respectively and an adherence to internationalaccounting and audit standards i.e. IFRSs and ISAs respectively, thiscompany3may represent a well managed company with growing profitability and investment potential. Thisreport attempts to establish this by analyzing its...
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