Cadbury CEO sacked
December 14th, 2006 Ogbuotobo Chuks || chuks@stockmarketnigeria.com
Ogbuotobo Chuks
Cadbury Scheweppes plc, a group that owns a number of confectionery and soft drink brands in 200 countries of the world, is seriously considering whether Cadbury Nigeria plc would continue to exist as a business or not.This follow the stunning revelation associated with the company’s financial statements.
The British confectionery giant feels thoroughly embarrassed by the outcome of its instigated investigation, which revealed the overstatement of accounts by up to N15-billion. This led to the sack of Bunmi Oni, the managing director and his finance director, Ayo Akadiri.
Industry sources revealed that Cadbury Nigeria’s account was not overstated by only three years, as the investigation revealed, but that the company had been overstating its account since 1997. That year, when it declared a turnover of N5.7-billion, its average collection period was about 26 weeks, the highest in the sector, compared to Nestle Nigeria’s four weeks; Lever Brothers’ (Unilever), two weeks; Nigerian Breweries, two weeks; Guinness, one week; WAPCO, one week, and Dunlop Nigeria, three weeks. The normal thing is 30 days stock or 30 days trade debtors.
What Cadbury Nigeria did, according to industry sources, was to ship out goods in order to show very good turnover for that year and the goods got stock in customers’ warehouses for six months.
In 1999, when its turnover shot up to N8.9-billion, following improved demand for goods and services generally in the country, Cadbury’s average collection period was still as high as 12 weeks with Unilever and Nigerian Breweries recording virtually zero collection period.
Nestle recorded 1.5 weeks average collection period that year with profit before tax (PBT) over shareholders fund of 127 percent.Cadbury had achieved 50.8 percent in PBT over shareholders’ fund, which showed it was performing excellently although not as well as Nestle.
Cadbury Schweppes plc was, perhaps, before now, looking elsewhere and could not be bothered about the integrity of its subsidiary’s financial statement. It was obviously more interested in the dividends it was getting and in the trading relationships.
When it increased its shareholding and decided to consolidate its accounts in Cadbury Nigeria, it became more involved and this was essentially what necessitated the financial investigations.
The new finance director of Cadbury Nigeria plc, Martyn J. Newlands, arrived Nigeria September, and this the acting managing director, Wallace Garland, who was seconded from Cadbury Egypt is only going to spend three months in Nigeria. This gives the impression of some difficulty in attracting an expatriate successor for Bunmi Oni.
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