Category: Capital Market

Nigerian Breweries (NB) Plc recorded strong growth in the first quarter as sales and profitability their best performance in recent period.

Interim report and accounts of NB for the three-month period ended March 31, 2022 showed that turnover rose by 30.4 per cent to N137.75 billion in first quarter 2022 as against N105.66 billion recorded in comparable period of 2021. Profit after tax leapt by 78.3 per cent to N13.77 billion in first quarter 2022 compared with N7.73 billion recorded in the corresponding period of 2021.

The report indicated that cost of sales increased by 14.1 per cent from N66.01 billion in 2021 to N75.32 billion in 2022. Also, marketing, distribution, and administration expenses also grew significantly by 54.7 per cent from N25.45 billion in first quarter 2021 to N39.38 billion in first quarter 2022.

Company Secretary and Legal Director, Nigerian Breweries (NB) Plc, Uaboi Agbebaku, said that the company remains committed to continuously delivering value for its shareholders by remaining sustainable and profitable amidst the challenging operating environment and challenges in the Nigerian economy.

“This positive performance has proven the ability of the board and management to navigate Nigeria’s business landscape in the best interest of the shareholders despite the inherent challenges. This result reflects the renewed determination of the company to drive efficiency and guarantee sustainable growth for the business,” Agbebaku said.

Unity Bank Plc witnessed considerable improvement in overall performance in 2021 as the bank’s pre-tax profit rose by 49.9 per cent to N3.33 billion.

Key extracts of the audited report and accounts of Unity Bank for the year ended December 31, 2021 released at the weekend at the Nigerian Exchange (NGX) showed that profit before tax rose from N2.22 billion in 2020 to N3.33 billion in 2021. Profit after tax also jumped by 52.1 per cent to N3.17 billion from N2.09 recorded in 2020. Gross earnings improved by 8.1 per cent to N50.28 billion in 2021 as against N46.52 billion in 2020.

The balance sheet of the agribusiness-focused bank also expanded with total assets rising by 9.5 per cent to N538.87 billion in 2021 compared with N482.02 billion in 2020, sustaining three years of consecutive growth. Unity Bank had grown its total assets by 39 per cent and 67.9 per cent in 2019 and 2020.

The bank also grew its loan portfolio by 33.2 per cent to N269.27 billion in 2021 from N202.08 billion in 2020, underlining the bank’s aggressive focus on boosting its liquid assets base.

Further analysis showed that net operating income rose to N28.41 billion from N21.3 billion, representing a 10.9 per cent increase. Net interest income had grown by 12.2 per cent to N20.05 billion from N17.74 billion. Earnings per share closed 2021 at 27.15 Kobo.

The full-year performance came on the back of a faster-than-expected recovery from the disruptions of the COVID-19 pandemic, which provided an opportunity for the bank to expand its retail footprint through strategic product offerings that appealed to broader segments of the market.

Managing Director, Unity Bank Plc, Mrs. Tomi Somefun, said the bank’s key performance indicators have continued on a trajectory of healthy balance sheet growth, asset quality and profitability achieved on the back of deft diversification of the bank’s earnings base.

She noted that the bank’s strategy balances out fairly in asset creation, investments and trade activities while riding on innovative customer-centric product offerings for both the retail and consumer segments of the market.

According to her, given the increased focus of the bank on growing its retail footprints supported by significant investment being made in technology to expand its digital banking space, the growing contribution of the channels and platforms delivery will further boost the multiple streams of income in the coming years.

“The bank’s growing profile in agribusiness has now placed it on a pedestal that enables it to attract significant value chain businesses for the continuous growth of its retail and small and medium enterprise (SME) banking whilst the bank consistently deploys product development and marketing initiatives to further grow the brand franchise, maximise the benefits and boost retail growth to double digits,” Somefun said.

She expressed optimism that positive sentiments around the repositioning of the bank and the outcome will continue to dominate opinion among analysts as market confidence continues to improve.

The newly listed Access Holdings Plc has the potential to grow its businesses and generate double-digit returns for investors.

Analysts at Coronation Asset Management in their latest review on the new holding company said Access Holdings’ business antecedents, new opportunities and experienced board and management make it an attractive stock to buy.

According to analysts, at the stock market, Access Holdings’ share price could rise by some 28 per cent capital gains. This implies more than 30 per cent total returns based on the group’s average dividend yields over the years.

Access Bank paid N35.5 billion for the financial year ended December 31, 2021, representing a total dividend per share of N1 for the year, an average of 10 per cent yield.

Analysts noted that the transition from a commercial banking group structure by the former Access Bank Plc to a holding company structure was aimed at creating strategic flexibility to adapt to future business opportunities and diversify the group’s revenue.

Coronation Asset Management outlined that Access Holdings consists of four subsidiaries designed to tap into the market opportunities with Access Bank playing in regulated banking, Grow Microfinance Bank Limited playing in consumer lending, The Payment Services Company Limited operating in digital payment services and Access Insurance Brokers Limited playing in retail insurance.

“We welcome this development at a time when competitive pressures are intensifying in the traditional banking space, and banks need to find new revenue streams and value in new opportunities.’’

“A holding company model in this environment is a tried and tested route for Nigerian banks to explore earnings growth outside of the challenging banking sector. It also provides scope for investors to value the group on a sum-of-the-parts basis and give management room to explore cross-selling opportunities across a large group,” Coronation Asset Management stated.

Analysts also commended the leadership structures for the now flagship subsidiary, Access Bank and the holding company noting that the fell in line with precedent created in recent years.

“Overall, we are encouraged by the new appointments, given their many years of experience across key positions within the bank and financial services at large,” Coronation Asset Management stated.

Access Bank Plc had on Monday March 28, 2022 formally completed its transition from a commercial banking group to a holding company (holdco) with the delisting of Access Bank and listing of Access Holdings Plc at the Nigerian Exchange (NGX).

Dr Herbert Wigwe, the former Group Managing Director of Access Bank, was announced as the Group Managing Director of Access Holdings Plc. The board of directors of the Access Holdings also immediately announced key management positions for its new flagship subsidiary, Access Bank Plc, with the appointment of Mr Roosevelt Ogbonna as the Managing Director of Access Bank. Mr. Victor Etuokwu was appointed as the Deputy Managing Director, Retail North for Access Bank, while Mrs. Chizoma Okoli was appointed Deputy Managing Director, Retail South of the bank.

A total of 35.545 billion shares of Access Bank was delisted and relisted in the name of Access Holdings, after same duly credited to shareholders in proportion to their holdings, as sanctioned by the scheme of arrangement for the transition.

With its new status, Access Holdings, which already has well-established subsidiaries in not less than 12 African markets and also in United Kingdom, will be able to expand into other financial services and non-finance businesses, in addition to its known commercial banking franchise.

Access Bank, the precursor of Access Holdings, is known for its deft acquisition deals and many analysts see the new holdco playing major roles in shaping the African economic landscape. The group has already hinted it intends to play leading roles in retail payment, financial technologies (fintechs) and specialised financial vehicles among others.

The immediate members of the holdco include the flagship Access Bank Plc and its former subsidiaries including Access Bank (Gambia) Limited; Access Bank (Sierra Leone) Limited; Access Bank (Rwanda) Plc; Access Bank (Zambia) Limited; Access Bank (R.D Congo) S.A.R.L; Access Bank (Ghana) Plc; Access Bank (Guinea) S.A; The Access Bank (UK )Limited; Access Bank (Mozambique) S.A; Access Bank Kenya Plc; Access Bank (South Africa) Limited; and African Banking Corporation of Botswana Limited.

Wigwe said the transition to holdco was in order to realign the group for growth and create strategic flexibility and diversification of its revenues.

According to him, the non-operating financial holding company would enable the group to hold investment in banking and non-banking subsidiaries as well as benefit from available market opportunities and grow scale in the regulated consumer lending market, African electronic payments industry and Nigerian retail insurance market.

Wigwe expressed optimism that the group would do well as its planned strategies in 2022 are intended to unlock opportunities for its stakeholders as well as its shareholders.

“We plan to do this by building a dynamic, efficient and agile bank with a digital-first mindset, capable of providing best in class service with strong returns,” Wigwe said.

Chairman, Board of Directors, Access Bank, Dr Ajoritsedere Awosika, said the bank will continue to pursue its strategies while building on its strengths and foundations to overcome the challenges the year will present.

Chairman, Access Holdings Plc, Mr. Bababode Osunkoya,  said the new appointments reflected the robustness of the leadership succession plan and the decision to considerably strengthen the  retail business while harnessing the potentials of small and medium enterprises (SMEs) and financial inclusion towards the attainment of group’s strategy.

According to him, the appointees were selected based on their exceptionally rich, professional, academic, and corporate board experiences, which are all relevant to the needs of the board.

“We are deeply convinced that their skills will no doubt continue to add significant value to our bank’s quest to become Africa’s Gateway to the World,” Osunkoya said

Shareholders of Custodian Investment Plc have authorised the board of the company to raise additional capital as part of its strategic growth.

At the annual general meeting in Lagos at the weekend, shareholders approved resolutions empowering directors of the company to raise new capital through any of the multiple options available to the company.

According to the resolutions, the company can issue debt instruments, preference shares or ordinary shares, or a combination of any of these options whether by way of private placement, rights issue, offer for subscription or any staff share scheme.

Shareholders also authorised the board to take steps to comply with Section 124 of the Companies and Allied Matters Act (CAMA) 2020 and Regulation 13 of the Companies Regulations 2021 relating to unissued shares of the company.

Addressing the shareholders, the Chairman, Custodian Investment Plc, Dr. Omobola Johnson, said  despite economic conditions that characterised the 2021 financial year, the company successfully grew its revenue by 14 per cent for the year ended December 31, 2021.

She stated that the gross revenue grew from N75.06 billion in 2020 to N85.74 billion in 2021.

According to her, the total asset base of the company rose to N184.47 billion during the year under review, indicating a five percent increase from the previous year.

She noted that equity attributable to owners of the parent company grew by 16 per cent to close the year at N55.12 billion from N47.65 billion in 2020.

She assured shareholders that the company will continue to adopt strategies that will ensure steady returns on investment to them.

Shareholders commended the board and management for a successful year despite the turbulent economic conditions under which the company operated last year.

President, Nigeria Shareholders Solidarity Association (NSSA), Mr. Matthew Akinlade expressed the hope that the company would continue to grow bigger and bigger in the future.

A shareholders’ leader, Mr. Adebayo Adeleke, who also commended the company’s financial performance, remarked that since 2008, Custodian Investment has never failed to pay interim dividend.

He noted that since 2008, the company has paid a gross dividend of N20.742 billion to shareholders.

Adeleke also commended the company for its consistent growth and asked the board to consider the idea of democratizing the directorship of the company and ensure diversity of electable directors in a bid to accommodate minority shareholders in the boards of subsidiary companies.

National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Dr. Anthony Omojola, also commended the sterling performance of the company and hoped it would be sustained.

 

Cordros Capital Group has launched a new ethical product that allows investors to enjoy the benefits of investing in fixed-income securities while adhering to the principles of Islamic rules.

Application list for the Cordros Halal Fixed Income Fund has opened and investors can invest as low as N2,500 in the mutual fund.

According to the investment group, the Cordros Halal Fixed Income Fund bridges the gap for ethically-minded investors looking to build their finances while adhering to Islamic principles.

“One of the most important aspects of Sharia law in Islam is ensuring that all sources of income are halal.

“In our world today, the concept of halal and haram have been restricted to issues of foods and drinks. However, the concept goes far beyond this as the Islamic sharia’a has commanded the application of this concept in all areas of human endeavors such as Lifestyle, finances, investment and business.

“This fund would be invested in short, medium and long-term Shariah-compliant fixed income securities, contracts and investment products that are permissible under Shariah principles,” Cordros stated.

The company outlined the benefits of investing in the new fund to include diversification and competitive return at low risk, accessibility as investors can buy a minimum of N2,500 units, liquidity as redemption can either be made partially or in full after allotment and capital preservation as the capital is protected against market volatility.

Cordros Capital Group, which already manages other mutual funds, assured that it would always be ready to provide investors with investment opportunities that assist them in building and achieving their goals.

Notore Chemical Industries Plc plans to restructure its capital structure by raising additional equity capital in the fourth quarter of this year.

The net proceeds of the will be applied to deleverage its balance sheet to achieve an optimal mix of debt and equity and fund part of planned expansion activities to further reposition the company for growth.

The management of the company at the weekend indicated that it also plans to carry out a bond issuance programme in the second quarter of 2023 after completing the equity raising programme. The company has already commenced discussions with a credit rating agency and other financial advisors as part of the processes for the debt issuance.

The net proceeds of the bond issue will be used to further reduce and restructure its existing bank debt to reduce finance costs and free up cash flows to augment working capital.

Notore is optimistic that its increased production capacity and diversification of revenue sources would lead to significant improvement in profitability and returns to shareholders.

The assurance came as the company reported an operating income of N9.9 billion in its audited results for the 15-month period ended December 31, 2021.

Group Managing Director, Notore Chemical Industries Plc, Mr Ohis Ohiwerei said the company used the immediate past financial year for rebuilding and repositioning in order to further deliver on its promise to champion the African green revolution.

According to him, though a very challenging period for Notore, it completed the TAM programme during the period. TAM was a critical step taken by the Company to address the drawbacks affecting the stability and reliability of its manufacturing plant, an essential measure to raise production output to meet and sustain its plant’s 500,000 MT per annum nameplate design capacity.

He said the completion of TAM has improved reliability and would translate to a significant upturn in the company’s production output, which will lead to increases in the company’s cash flows from operations, strengthen its debt service capacity, and generate substantial increases in revenues in the future, an essential key to returning the company to profitability in the ongoing financial year.

He noted that the company has taken steps to diversify its revenue streams further, adding that the production of its Notore NPK blend of fertilisers has continued to ramp up in output and sales, with increases expected in the ongoing future periods.

“By leveraging on its installed 2,000 metric tons per day NPK blending capacity, and its successful introduction of the Notore NPK brand of fertilisers, the company is well-positioned for significant growth in revenues and cash flows in the ongoing future.

“Additionally, while leveraging the Company’s seeds business, robust supply chain and distribution network, the company is expanding further its product offering by going into rice production. The company has carried out two rice pilot programs as a prelude to its planned launch of Notore rice as a product line in 2023.  It is expected that these additional initiatives will further diversify the company’s revenue stream, significantly increase revenues, boost profitability, and contribute considerably to its cash flow,” Ohiwerei said.

He said Notore has taken the steps in its bid to improve working capital and return to profitability, stating that the company is in discussion with its bankers for a further restructuring of a substantial part of the company’s short-term loans into fixed long-term loans.

According to him, when concluded in second quarter 2022, the loan restructure arrangements are expected to considerably reduce its finance costs and free up cash flows to augment working capital.

On the outlook for the year, Ohiwerei was optimistic about the growth of Nigeria’s fertiliser sector, noting that the Nigerian fertiliser demand remains robust and is expected to continue to grow, considering the Federal Government’s strong and decisive policy focus on agriculture as one of the keys to unlocking the diversification of the Nigerian economy.

“With the TAM programme now completed, Notore expects a significant upturn in its plant’s reliability and production output.  This, coupled with other measures to reposition Notore, is expected to boost revenues, improve cashflows, and facilitate a gradual return to profitability in the ongoing financial year,” Ohiwerei said.

Cadbury Nigeria Plc recorded 169 per cent growth in pre-tax profit in 2021 as the company pushed its turnover to all-time high of N42.37 billion.

The audited report and accounts of Cadbury Nigeria for the year ended December 31, 2021 showed that gross earnings rose by 19.67 per cent to N42.37 billion in 2021 as against N35.41 billion recorded in 2020. Pre-tax profit grew from N408.1 million in 2020 to N1.1 billion in 2021, representing an increase of 169.1 per cent. The company continued to maintain a strong balance sheet with total assets of N43.69 billion in 2021, an increase of 31.55 per cent above N33.210billion recorded in 2020.

In a statement, Managing Director, Cadbury Nigeria Plc, Mrs. Oyeyimika Adeboye, attributed the company’s strong performance in 2021 to the effectiveness of its strategy and capacity to generate sustainable revenue.

“Despite the tough operating environment characterised by high cost of doing business, rising inflation, high cost of fund, difficulty in accessing forex, and policy inconsistency, which increased our manufacturing, selling and distribution expenses, we recorded an appreciable increase in our topline growth, which is our highest so far,” Adeboye said.

She, however, noted that the company’s export business was impacted by volatility in foreign exchange (forex) rate and the perennial port congestion in Apapa, Lagos State.

She pointed out that the company has been shipping its products to and fro Ghana via sea freight, following the introduction of new transit charges on trucks by the government of the Republic of Benin, in June 2021.

Corporate Communications and Government Affairs Manager, Cadbury Nigeria Plc, Frederick Mordi stated that the company was recently recognised as a Top Employer in Africa by the Amsterdam-based Top Employers Institute.

Cadbury Nigeria is Nigeria’s pioneer cocoa beverage manufacturer. Mondelçz International, a global snacking powerhouse, holds 74.99 per cent of the company’s equity while the remaining 25.01 per cent of the shares are held by a diverse group of indigenous, individual and institutional investors. Cadbury Nigeria’s products portfolio includes Bournvita, Hot Chocolate 3 in 1, TomTom, Buttermint, and Clorets.

Nigerian equities continued to witness significant selloffs as investors ignored dividend payouts and sought to monetise capital gains and lock in value in less volatile securities.

Benchmark indices for the Nigerian stock market closed weekend with average decline of 0.45 per cent, equivalent to net capital depreciation of N114 billion.

Two major companies-Lafarge Africa and MTN Communications Nigeria closed their dividend-paying register while some six companies announced new dividend payouts during the week.

Most sectoral indices also closed on the downside, underlining the prevalent negative sentiments at the market.

The All Share Index (ASI)- the common value-based index that tracks all share prices at the Nigerian Exchange (NGX), closed weekend at 46,631.46 points as against its week’s opening index of 46,842.86 points. This depressed the average year-to-date return for Nigerian equities to 9.17 per cent.

Aggregate market value of all quoted equities dropped from its week’s opening value of N25.253 trillion to close weekend at N25.139 trillion, representing a loss of N114 billion.

Expectedly, most sectoral indices also closed lower with the NGX 30 Index, which tracks the 30 largest companies at the Exchange, dropping by 0.43 per cent. The NGX Industrial Goods Index declined by 0.42 per cent. The NGX Consumer Goods Index dropped by 0.35 per cent while the NGX Insurance Index dipped by 0.21 per cent.

Analysts at Cordros Securities said the 2021 full-year earnings season appeared to have run its course, and investors’ sentiment will now be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed income space.

Analysts advised investors to take positions in only fundamentally sound stocks as the weak macro story remains a significant headwind for corporate earnings.

Analysts, however, noted that with the moderation in the prices of major stocks, savvy investors may return to take advantage of lower prices and make re-entry ahead of first quarter 2022 earnings announcements.

Pricing trend analysis showed that there were 33 gainers against 31 losers last week, as against 20 gainers and 50 losers recorded in the previous week. However, 92 equities closed flat at the weekend, compared with 86 unchanged stocks in the previous week.

Meyer recorded the highest gain, in percentage terms, with a gain of 56.94 per cent to close at N1.13 per share. Regency Assurance followed with a gain of 19.35 per cent to close at 37 kobo while Conoil added 16.85 per cent to close at N26 per share.

On the negative side, NPF Microfinance Bank posted the highest loss of 16.06 per cent to close at N2.09. U A C of Nigeria followed with a drop of 13.68 per cent to close at N10.10 while Royal Exchange declined by 12.84 per cent to close at 95 kobo per share.

Total turnover at the NGX last week stood at 1.137 billion shares worth N10.812 billion in 23,471 deals compared with a total of 1.289 billion shares valued at N13.546 billion traded in 22,118 deals two weeks ago.

The financial services sector remained atop the activity chart with 798.246 million shares valued at N6.732 billion in 12,904 deals; thus contributing 70.23 per cent and 62.26 per cent to the total equity turnover volume and value respectively. The conglomerates sector followed with 155.154 million shares worth N228.975 million in 917 deals while consumer goods sector placed third with a turnover of 45.341 million shares worth N1.013 billion in 2,819 deals.

The three most active stocks were Fidelity Bank Plc, Transnational Corporation of Nigeria Plc, and Zenith Bank International Plc. The three most-traded stocks altogether accounted for 454.800 million shares worth N2.551 billion in 4,587 deals, contributing 40.01 per cent and 23.60 per cent to the total equity turnover volume and value respectively.

Also, a total of 76,043 units of Exchange Traded Products (ETPs) valued at N1.251 million were traded in 31 deals compared with a total of 4,448 units valued at N478,868.63 traded in 23 deals two weeks ago.

At the secondary bond market, a total 21,314 units valued at N22.012 million were traded in 12 deals compared with a total of 35,517 units valued at N39.252 million swapped in 16 deals two weeks ago.

Wema Bank Plc has completed its massive share reconstruction exercise with the delisting of the old issued shares and relisting of the new post-reconstruction shares.

The bank had secured shareholders and regulatory approvals to undertake a share reconstruction as part of a new recapitalisation programme. Under the share reconstruction, the bank’s issued and fully paid shares were reconstructed from about 38.575 billion ordinary shares of 50 Kobo each to 12.858 billion ordinary shares of 50 Kobo each on the basis of exchange ratio of one new post-reconstruction share for every three old pre-reconstruction shares held.

With the completion of the exchange process, the entire old share capital was delisted from the Nigerian Exchange (NGX) and the new paid up share capital comprising 12.858 billion ordinary shares was listed at N2.76 per share.

The revaluation of the post-reconstruction shares ensured that shareholders did not lose any capital value in the immediate post-reconstruction listing. The NGX has also lifted the full suspension placed on the bank’s shares on March 08,2022, allowing investors to trade on the newly listed shares.

Wema Bank has indicated it plans to raise new equity and debt capital, and the share reconstruction was meant to create headroom for new issuances.

The Lagos Commodities and Futures Exchange (LCFE) has inducted 102 commodities brokers as part of the preparation for the commencement of full trading.

Last month, the Exchange had inducted 50 senior commodities brokers and another 52 brokers at the weekend.

The induction coordinator and past president of Chartered Institute of Stockbrokers (CIS), Mr Mike Itegboje, said commodities had become major sources of foreign exchange globally.

He urged the inductees to take advantage of the emerging opportunities to support the government in its efforts to bridge the gap in foreign exchange (forex) supply.

Director-General, Securities and Exchange Commission (SEC), Mr Lamido Yuguda, who was represented by the Commission’s Head of Operation,  Lagos Zonal Office, Mr  John Achile, said  initiatives that lead to economic transformation through the commodities ecosystem had been supported by SEC.

Chairman, LCFE, Chief Onyewenchukwu Ezeagu said the trading rules of the Exchange which cut across agriculture, oil and gas, solid minerals and currency were approved by SEC.

According to him, the rules had been exposed to the capital market and commodities ecosystem.

Chairman, Association of Securities Dealing Member Houses of Nigeria (ASHON), Mr Sam Onukwue said commodities trading presented a new frontier that would challenge professionals to unleash their creative potentials to grow the market and create value for its stakeholders.

He urged the Federal Government to ensure that only regulated exchanges are allowed to engage in commodities trading.

Managing Director, Lagos Commodities and Futures Exchange (LCFE), Mr Akin Akeredolu-Ale, who was represented by Group Managing Director, GTI Group, Mr. Abubakar Lawal , urged the inductees to comply with the Exchange’s rules and regulations in order to build an efficient commodities market.

Doyen of the day, Alhaji Rasheed Yussuff advised the inductees to live up to expectation in creating  value for stakeholders and the entire ecosystem.

Former Deputy Director General, Nigerian Exchange  (NGX), Alhaji Rasaki Oladejo had at the induction of senior commodities brokers put the relevance of commodities exchange in perspective:

“Commodities Exchanges are highly efficient marketplace for buyers and sellers of commodities to meet, primarily to manage price risks, but also to improve the marketing of their products. The Lagos Commodities and Futures Exchange was established in recognition of the need to fully realise the potential of the country’s drive towards development of non-oil exports. This will enable the commodities ecosystem to tap the opportunities thereof and support the nation’s quest to create wealth for the stakeholders. The ecosystem has capacity to put Nigeria on the global revenue map,” Oladejo said.