Seven Up Plc, a company listed in the Nigerian Stock Exchange recently concluded its AGM where it released its annual reports officially to its shareholders. Whilst the results are very well known (see my analysis), the company announced what I consider a bombshell to its shareholders. The company announced that it will spend a whopping N681million in “pursuing outstanding court cases”.
The company is engaged in lawsuits that have arisen in the normal course of business. The contingent liabilities in respect of pending litigation and other claims amounted to N681 million as at March, 2013 (2012: N672 million.)”
Seven Up posted a profit after tax of N2.9billion for the year ended March 2013. Therefore the N682million represents about 23% of the company’s profits. Seven Up annual reports are hard to come by so it it may not be immediately possible to ascertain what those court cases are. Ironically in its 2009 annual report the company claimed it did not see any contingent liability arising from it lawsuit materialising, yet it has about N681million in likely claims.
Seven Up Bottling Company Plc is one of the oldest beverage companies in Nigeria and also one of the biggest. They currently bottle, Pepsi, Seven Up, Mountain Dew, Teem, Mirinda etc. Dangote Sugar is a major supplier to Seven Up.
Did You Know? The first seven up drink was released on October 1 1960 same day we had our independence.