After a challenging 2023 and 2024, when losses deepened, Cadbury Nigeria has made a bold recovery in 2025.
According to the 2025 full-year unaudited results, the company’s revenue surged by 31%, driven largely by strong performances from its flagship brands in Nigeria
For the first time in two years, the company has posted a net profit of N12.1 billion, reversing the N22.2 billion loss from the previous year.
A profitable turnaround
Cadbury Nigeria’s 2025 performance marks a significant recovery from the setbacks faced in 2023 and 2024, when the company was in the red.
The growth in revenue, primarily driven by strong revenue growth, has set a strong foundation for a sustainable rebound.
However, while these numbers are promising, a closer look reveals that Cadbury is still in the early stages of recovery.
Efficiency and leverage: Areas for improvement
Although gross profit margins improved from 14.1% in 2024 to 21.6% in 2025, the company’s net profit margin of 7.1% indicates room for further improvement.
- This means that for every N100 of revenue, only N7 remains as net profit. This level of profitability suggests inefficiency, especially for a company that still operates with a high debt load.
- The company’s debt-to-equity ratio of 3.99 highlights this vulnerability, indicating that Cadbury Nigeria remains highly leveraged.
While leverage can fuel growth by providing financing, it also raises concerns about sustainability, particularly in volatile economic conditions.
High-interest obligations further limit profit retention and raise financial risk.
Retained losses
The company is still carrying retained losses of N25.2 billion. It will likely take about two more years of steady profits at the current rate to completely eliminate these losses.
This shows that while Cadbury is on the right path, it needs to further improve its operating efficiency to move away from this.
Liquidity and working capital risks
Another key concern is liquidity. The company’s current ratio of 0.71 signals a potential issue with meeting short-term obligations.
It must therefore ensure to prioritize efficient management of its current assets and liabilities to avoid cash flow problems. Proper management of working capital is essential if the company hopes to build on this recovery and avoid liquidity issues in the future.
The path to sustainable growth and dividends
Cadbury Nigeria’s growth trajectory remains encouraging, but sustaining this momentum will require more than just maintaining current performance. The work is far from complete.
The next phase must focus on expanding profit margins, lowering leverage, and tightening liquidity management.
Improving efficiency is critical to retaining more value from each naira of revenue. This will help Cadbury move beyond mere recovery into sustainable growth.
With successful execution, it could soon position itself to resume dividend payments, a key milestone for investors.
- The company last paid dividends in 2023 for the 2022 financial year, and a return to consistent profitability is a precondition for reinstating shareholder distributions.
The equity market has responded positively to the turnaround. In 2024, Cadbury’s stock surged by 178%, closing the year at N69.90, with a 6.84% gain year-to-date in 2025.
Despite this optimism, Cadbury’s market capitalization of N146 billion significantly outpaces its net asset value of N16.5 billion, reflecting investor confidence in its recovery potential but also setting high expectations.
As the company moves forward, the margin for error remains thin.
Investors are pricing in future performance, but a stronger track record of profitability, margin expansion, and efficient capital management is necessary to deliver these expectations and fully unlock Cadbury’s potential.
