Agusto & Co has affirmed A- rating to food services giant in Nigeria, Sundry Foods Limited (SFL) with stable outlook.
This comes nearly three weeks after an international rating agency, Global Credit Ratings (GCR) accorded SFL the national scale long term and short term issuer ratings of A-(NG) and A2 (NG) with revised outlook to positive.
”Agusto & Co. upgrades the rating assigned to Sundry Foods Limited (“Sundry Foods”, “SFL” or “the Company”) to “A-,” Mr Nduka Mokwunye, Head Marketing, SFL, announced in a statement.
In the report, Agusto & Co noted that the upgrade reflects SFL good profitability, moderate leverage, adequate working capital as well as good and sustainable cash flow position which it said is supported by the company’s favourable trade terms with its customers and creditors.
The agency said other factors that influenced the rating include aggressive expansion drive as well as the company’s good market position in the capacity of a leading player in the Quick Service Restaurant (QSR) industry with a stable and experienced management team.
Similarly, SFL cumulative Operating Cash Flow over the recent three-year period (2019-2021) was enough to meet dividends and interest payments; therefore, in the rating agency’s opinion the company’s cash flow position is good and sustainable given its business model.