Cadbury Nigeria has recorded a N12.1 billion net profit for 2025 business, a dramatic reversal from the N22.2 billion deficit that haunted its 2024 books. Revenue climbed 31%, powered by renewed consumer appetite for its flagship brands across Nigeria, and for the first time since 2023, the company can claim black ink where red once dominated.
But survival and strength are not the same thing. While the headline numbers signal recovery, a deeper examination reveals a company still navigating fragile ground, where momentum must be carefully managed and margins meticulously improved if this turnaround is to become truly sustainable.
Cadbury’s gross profit margin expanded from 14.1% to 21.6% year-on-year, a meaningful improvement that suggests better cost management and pricing power. Yet the net profit margin tells a more sobering story: at just 7.1%, the company retains only N7 for every N100 it earns. For a brand with Cadbury’s heritage and market position, this level of profitability points to lingering inefficiencies that must be addressed as the recovery matures.
The weight of the past remains visible in the balance sheet. Retained losses still sit at N25.2 billion, a legacy that will require approximately two more years of steady profits at current levels to fully erase. The company is moving forward, but it carries heavy baggage, and every strategic decision must account for this burden.
Equally concerning is Cadbury’s leverage profile. With a debt-to-equity ratio of 3.99, the company operates under significant financial pressure. While debt can be a catalyst for growth when deployed strategically, this level of leverage leaves little room for economic shocks or operational missteps. High interest obligations drain resources that could otherwise strengthen profitability, and in Nigeria’s volatile macroeconomic environment, such exposure amplifies risk considerably.
Liquidity presents another vulnerability. The current ratio of 0.71 indicates that Cadbury’s short-term liabilities exceed its liquid assets, a red flag for any business but particularly troubling for one still rebuilding financial stability. Efficient working capital management isn’t optional at this stage; it’s existential. Cash flow discipline will determine whether this recovery gains traction or stalls under the weight of operational demands.
Despite these challenges, the market has embraced Cadbury’s narrative. The stock surged 178% throughout 2024, closing at N69.90, and has added another 6.84% year-to-date in 2025. Investor enthusiasm has pushed the company’s market capitalization to N146 billion, nearly nine times its net asset value of N16.5 billion. This premium reflects confidence in the turnaround potential, but it also creates heightened expectations that future performance must satisfy.
The next chapter will be more demanding than the last. Returning to profitability was essential, but building sustainable value requires margin expansion, deleveraging, and operational excellence that goes beyond revenue growth. Cadbury must extract more profit from each naira earned, reduce its dependency on debt financing, and ensure its balance sheet can support both growth ambitions and market volatility.
For investors, the prospect of resumed dividend payments looms as a key milestone. The company last distributed returns to shareholders in 2023 for the 2022 financial year, and consistent profitability must be firmly established before dividends can responsibly return. Management’s ability to balance reinvestment needs with shareholder expectations will test both financial discipline and strategic judgment.
Cadbury Nigeria has proven it can recover. Now it must prove it can thrive. The foundation has been laid, but the structure isn’t yet complete. What comes next will determine whether 2025 is remembered as the beginning of sustained growth or simply a temporary reprieve from deeper structural challenges. The market is watching, and it’s pricing in success. Delivering on that expectation is the work that truly matters now.