The Nation Newspaper

Category: Equities

  • Access Bank grows profit by 66% to N45.1b in Q1

    Access Bank Plc sustained impressive growths in the top-line and bottom-line in the first quarter as the first-tier commercial banking group grew its pre-tax profit by 66 per cent to N45.1 billion in the first quarter.

    Key extracts of the interim report and accounts of the bank for the three-month period ended March 31, 2019 released yesterday at the Nigerian Stock Exchange (NSE) showed that gross earnings rose by 16.5 per cent to N160.12 billion in first quarter 2019 as against N137.54 billion in first quarter 2018. Profit before tax jumped by 66 per cent from N27.44 billion to N45.10 billion. After taxes, net profit leapt by 86.03 per cent from N22.12 billion in first quarter 2018 to N41.15 billion in first quarter 2019. Earnings per share also rose from 77 kobo to N1.39.

    The balance sheet also emerged stronger within the period. Total assets rose by 29.9 per cent from N4.95 trillion in December 2018 to N6.43 trillion in March 2019. Customer deposits leapt by 53.1 per cent from N2.56 trillion to N3.92 trillion while shareholders’ funds increased by 17.8 per cent from N482.64 billion by December 31, 2018 to N568.74 billion by March 31, 2019.

    Access Bank and Diamond Bank Plc had during the period consummated a merger, which led to enlarged Access Bank.

    Group Managing Director, Access Bank Plc, Mr Herbert Wigwe, said the increased earnings during the period underscored the value potentials of the newly expanded business model.

    “Following the successful completion of the merger with Diamond Bank in March 2019, we have now fully positioned ourselves in the retail market with a view to bringing the power of banking to the doorsteps of millions. We are providing a broader platform to facilitate payments services in Nigeria and across Africa, by harnessing our significantly enhanced digital technology capabilities,” Wigwe said.

    He noted that the capital and liquidity position of the bank remained above regulatory levels, with capital adequacy ratio (CAR) at 19.5 per cent and liquidity ratio of 47.6 per cent, which further demonstrated the capacity of the enlarged balance sheet to cope with possible negative shocks.

    He pointed out that the bank has made solid progress throughout the first quarter of 2019 in line with its 2018-2022 five-year strategy, assuring that it remains committed to the achievement of its strategic imperatives going forward as it continues to invest in people, technology and most importantly, product offerings to customers.

    “Our focus is to become the world’s most respected African Bank by leveraging on the strength of our retail and wholesale business to provide unrivalled value to our customers,” Wigwe said.

     

  • Mouka an inspiration to Africa, says London Stock Exchange

    The London Stock Exchange Group (LSEG) has again named Mouka Limited as one of Africa’s most inspirational and high growth companies. Mouka, an indigenous mattress and foam products manufacturer, is among a few African companies to be recognised twice by the LSEG in its Companies to Inspire Africa report.

    Mouka was listed in the 2019 report. It had been listed in the 2017 inaugural edition. Mouka was recognised alongside 360 companies from 32 countries across the continent represented in the 2019 report. The report noted that Mouka recorded average compound annual growth rate of 46 per cent, up from 16 per cent in 2017.

    Companies to Inspire Africa 2019 was produced in partnership with African Development Bank Group, CDC Group, PWC and Asoko Insight which contributed their insight and expertise to select the featured companies, and the report is sponsored by Instinctif Partners and Stephenson Harwood.

    To be included in the list, companies need to be privately held, and show an excellent rate of growth and potential to power African development.

    Chief Executive Officer, Mouka Limited, Raymond Murphy noted that after Mouka was mentioned in the inaugural edition of the report, the company made remarkable progress by consolidating its previous achievement and earning the enviable recognition for a second time in 2019.

    “One of the biggest opportunities over the past year has been to use the challenging operating environment to demonstrate the strength of our operations, by ensuring product availability in a marketplace where our competitors are struggling to do the same… As a result, we have been able to gain market share,” Murphy said.

    In 2017, the same year it made the inaugural list of Companies to Inspire Africa, Mouka was also awarded the Mattress Manufacturing Company of the Year at that year’s edition of The Guardian Manufacturing Excellence Award. The mattress manufacturer also earned another recognition by the African Brand Congress as the Mattress Brand of the Year.

    Established in 1959,Mouka Limited manufactures foam and spring mattresses, as well as other bedding products at its three production facilities across Nigeria. The company has also developed an extensive distribution network with more than 1,000 branded sales outlets and over 300 third-party distributors across the country.

     

  • SAHCO to list shares on Stock Exchange

    Following the completion of its initial public offering (IPO), Skyway Aviation Handling Company (SAHCO) Plc, will this week list its shares on the Nigerian Stock Exchange (NSE). SAHCO will be the second ground handling company to be listed at the stock market, after Nigerian Aviation Handling Company (Nahco) Plc.

    SAHCO had floated an IPO of 406.074 million ordinary shares of 50 kobo each at N4.65 per share. The IPO was an offer for sale, implying that the net proceeds of the IPO would go to the existing majority core investor in SAHCO, which was divesting partially to allow retail minority ownerships. Ten per cent of the shares offered for sale were earmarked for staff of SAHCO under an Employee Stock Ownership Plan to be set up and administered by a Trustee.

    The IPO, which opened on November 5, 2018 and was scheduled to close on December 19, 2018, was extended for 12 working days to January 09, 2019.

    The IPO was, however, undersubscribed by 35.35 per cent as the company was only able to raise N1.22 billion out of IPO value of N1.89 billion. Official final allotment report for the IPO showed that a total of 1,212 applications were received for 262.52 million ordinary shares of 50 kobo each at N4.65 per share, totaling N1.22 billion.

    SAHCO was privatised by the Federal Government in 2009. Sifax Group acquired the entire share capital of the company. The Share Sale Purchase Agreement (SSPA) however mandates the majority core investor to divest 49 per cent of the shares of the company to the general Nigerian investing public.

    The board of the company had stated that SAHCO planned to ride on the back of the success of its IPO to further push its vision of becoming the leading provider of aviation handling services in the West African region.

  • CCNN posts N5.7b net profit

    Cement Company of Northern Nigeria (CCNN) Plc grew its net profit by 77 per cent to N5.7 billion in 2018.

    In its first report since the merger with Kalambaina Cement Company, CCNN’ turnover rose by 62 per cent to N31.7 billion. Earnings before interest, taxes, depreciation and amortization ( EBITDA) rose by 86 per cent to N7.9 billion.

    The top-line growth was due largely to increased domestic sales and exports. Overall, CCNN produced 0.76 million metric tonnes of cement and sold over 0.74 million metric tonnes, an increase of about 59 per cent. Sale of cement in Nigeria rose by 49 per cent to N28.9 billion while exports jumped from N0.2 billion in 2017 to N2.9 billion in 2018. Earnings before interest and taxes rose by 86 per cent to N7.9 billion profit before tax increased by 81 per cent to N7.6 billion.

    While the merger was completed in fourth quarter of 2018, the management elected to report the performance of the merged entities as if the merger took place at the start of the year. Consequently, earnings per share shrunk by 83 per cent to 44 kobo as shares outstanding jumped over nine times to 13.1 billion units.

    The board of directors of the company has recommended payment of a dividend per share of 40 kobo, representing some 92 per cent of the net earnings per share.

    The management of the company stated that it plans to extend product distribution to the northeast and central regions of Nigeria, as it does not expect the northwest of the country to absorb the company’s current, larger 2.0 metric tonnes capacity.

    There are however predictions that CCNN will record significant upside to its net income in 2019 and beyond upon approval of pioneer status by the Nigerian Investment Promotion Commission (NIPC) and a moderate chance of CCNN receiving approval on the new line.

    Heidelberg Cement Group had in 2008 divested its majority equity stake in CCNN to Damnaz Cement Company Limited, a Nigerian company. In 2010, BUA International Limited acquired Damnaz Cement Company Limited and became indirectly the majority shareholder in CCNN and its technical partner. CCNN currently operates as a subsidiary of BUA International Limited.

  • Nigerian Breweries to list N15b CPs on FMDQ

    Nigerian Breweries Plc will list its ongoing N15 billion commercial papers issuance on the FMDQ OTC Securities Exchange to provide investors opportunity to trade on their holdings.

    The brewer is offering 90-day and 182-day CPs to investors with a view to raising short-term funds for its operations. The issuance is part of the company’s N100 billion CP programme.

    The 90-day CPs carry effective and discount yields of 11.590 per cent and 11.2680 per cent respectively while the 182-day CPs carry 14.430 per cent and 13.4614 per cent respectively. Both issuances have been rated Aa by Agusto and AA by Global Credit Rating (GCR).

    The Series 1 90-day CPs are expected to mature on Monday July 22, 2019 while the Series 2 182-day CPs will mature on Tuesday, October 22, 2019. The offers opened on Thursday, April 11, 2019 and will close on Thursday, April 18, 2019. The settlement date is Tuesday, April 23, 2019.

    In a statement at the weekend, Company Secretary and Legal Director, Nigerian Breweries Plc, Uaboi Agbebaku said the new CP programme would support the company’s cost management and complement traditional sources of financing to include non-bank financing options.

    He said the CPs also provide opportunity for non-equity investors to invest in the company.

    He noted that following the success of the company’s first N100 billion CP programme between 2015 and 2018, the board of directors of the company had approved a new N100 billion programme last July.

  • Assets custodians showcase Nigerian capital market in London

    Leading assets’ custodians, capital market operators, regulators and global investors will next month in London further explore the potential of the Nigerian capital market.

    The Association of Assets Custodians of Nigeria (AACN) is organising its eighth investors’ forum in London as part of activities to commemorate its 10th anniversary.

    The theme of the Annual Nigerian Investors Day is ‘Nigeria: the Economics of the Capital market’. The event will take place on Thursday, May 9, at the London Marriot Canary Wharf Hotel & Executive Apartments, London.

    At a briefing in Lagos, AACN President, Mrs. Taiwo Sonola, said the international forum is part of the commitment of the association to the promotion of investments in Nigeria.

    “The potential of the Nigerian economy is vast and it is important that the opportunities are showcased globally,” Sonola said.

    She outlined that the London conference will focus on investor confidence, processes, infrastructure, products, governance, regulations and market developments.

    She pointed out that the one-day forum will avail the global audience up-to-date information on the Nigerian capital market, noting that against the backdrop of the successful conduct of general elections in Nigeria, the forum will seek to reassure international investors of the safety of their investments in the country, while highlighting the huge potential to undecided investors.

    “The aim is to build foreign investor confidence and provide a platform for foreign investors to network with the Nigerian capital market regulators, operators with particular focus on custodians, fund managers, broker dealers, and regulators and also provide a forum for the promotion of custody business in Nigeria. It will also provide opportunities for participants to air their views and challenges,” Sonola said.

    She added that the forum will also bring together investors to engage with each other, share information, review the Nigerian policy and economic environment as well as peruse economic opportunities.

    She said leading voices from the securities services in Nigeria and abroad are expected to provide a full overview of the leading trends and challenges facing the industry.

    She explained that the choice of London was due to its status as the heartbeat of financial activities in Europe noting that as the bulk of assets managed by Nigerian custodians are owned by foreign portfolio investors, it is only logical to interface with them on their home ground.

    The 2019 Annual Nigerian Investors Day in London is the 8th annual conference of its kind. About 100 delegates are expected at the event.  Institutions expected to participate at the event include representatives from the Debt Management Office, Securities and Exchange Commission, Central Securities Clearing System (CSCS) PLC, FMDQ OTC PLC, Nigerian Stock Exchange (NSE), registrars, fund management companies as well as other companies.

    Sonola noted that in its 10 years of existence, the association has contributed in no small measure towards development of the Nigerian financial markets, including initiatives with the Central Bank of Nigeria (CBN) and the Financial Market Dealers Association to facilitate a more efficient and investor-friendly electronic Certificate of Capital Importation (CCI) processes for the various investment products in Nigeria.

    According to her, the association also collaborated with the Securities & Exchange Commission (SEC) to initiate the mandatory appointment of custodians to registered collective investment schemes and joint development of operational guidelines and other prerequisites for securities lending in the Nigerian capital market with the Nigerian Stock Exchange (NSE) among others.

    In celebrating its 10th anniversary, the association, as part of its corporate social responsibility initiatives, will be mentoring a school in Lagos as well as organizing a 10th anniversary seminar and  dinner during which individuals who have contributed to the development of the non-pension custody industry would be honoured.

    Sonola assured that AACN is  committed to championing positive market reforms, driving efficiency and initiating advocacy at all key market touchpoints.

  • NSE to use blockchain, new technologies for capital raising

    The Nigerian Stock Exchange (NSE) is exploring the use of innovative technologies like Blockchain and Distributed Ledger Technology (DLT) as means of raising capital as part of the efforts to align the capital market with emerging financial technologies (fintech).

    Blockchain and DLT allow transfer and sharing of digital data across multiple sites without a central storage or administrator.

    NSE Chief Executive Officer Mr Oscar Onyema said the Exchange is considering creating alternative and innovative platforms for capital raising through the use of new technologies such as Blockchain and DLT.

    He said fintech offers opportunity to deepen the capital market and also achieve sustainable economic growth by empowering a larger portion of the populace to access financial services while simultaneously unlocking efficiencies in product and service delivery for financial institutions as well as increasing transparency and resilience of the Nigerian capital market and larger financial ecosystem.

    Onyema pointed out that while the NSE is focused on delivering on its mandate to be Africa’s Preferred Exchange Hub, the bigger picture for the Exchange is to create a dynamic marketplace that fuels growth and empowers people towards excellence in business and ventures.

    He said the Exchange has also demonstrated its supports for fintechs and start-ups with the introduction of the growth board of the Exchange, which caters for companies with high growth prospects, especially fintechs emerging from venture capital management to a more mature management that would require public investment and corporate consolidation.

    He added that with the support from the Exchange, companies with high growth potential will be able to leverage public finance for growth and expansion.

    Onyema, who spoke at a fintech event hosted by the NSE, said the theme of the event: Growth Funding and Strategic Capital Raise – Extending Financial Inclusiveness through the Capital Market” is of particular interest to the Exchange due to its connection to its core function as a hub for accessing capital.

    According to KPMG’s “2018 Global Analysis of Investment” equity investment into global FinTech companies almost tripled from $18.9 billion to $50.8 billion between 2013 and 2017; and has continued to gain traction.

    “The global picture of capital flow into fintechs especially in emerging markets is proof that FinTechs are important economic catalysts in the 4th Industrial Revolution. Surprisingly, foreign investors seem to be seeing these gains better than local investors as statistics show that they have dominated capital raise for indigenous start-ups in the last couple of years,” Onyema said.

  • Equities sustain rally with N58b gain

    Nigerian equities remained on the upswing for the second consecutive trading session as considerable rally in the banking sector left the market with net capital gain of N58 billion. Equities had started a modest recovery with a gain of N13 billion on Wednesday.

    The All Share Index (ASI)- the value-based index that tracks share prices at the Nigerian Stock Exchange (NSE), appreciated by 0.53 per cent to close at 29,347.62 points as against its opening index of 29,193.42 points. Aggregate market value of all quoted equities also rose by N58 billion from N10.965 trillion to close at N11.023 trillion. The rally moderated the negative average year-to-date return to -6.63 per cent.

    With more than two advancers for every decliner, most sectoral indices showed widespread optimism, although the momentum of trading remained cautious. The NSE Insurance Index rose by 1.92 per cent. The NSE Banking Index followed with average gain of 1.19 per cent. The NSE Industrial Goods Index rose by 0.82 per cent while the NSE Oil and Gas Index closed flat for the second consecutive session. However, the NSE Consumer Goods Index declined by 0.06 per cent.

    There were 15 gainers against seven losers. Guaranty Trust Bank led the gainers with a gain of 70 kobo to close at N34.25. FBN Holdings and Lafarge Africa followed with a gain of 45 kobo to close at N7.80 and N12 respectively. GlaxoSmithKline Consumer Nigeria rose by 40 kobo to close at N8.95. Stanbic IBTC Holdings and NEM Insurance added 20 kobo each to close at N46 and N2.20 respectively while United Capital chalked up 17 kobo to close at N2.77 per share.

    On the negative side, Flour Mills of Nigeria led the decliners with a loss of 40 kobo to close at N16.60. Eterna followed with a drop of 35 kobo to close at N4. Ikeja Hotels dropped by 20 kobo to close at N1.85. Zenith Bank declined by 15 kobo to close at N20.45. ABC Transport lost 4.0 kobo to close at 44 kobo while Chams and Cutix dropped by 2.0 kobo each to close at 26 kobo and N1.60 respectively.

    The momentum of activities slowed down as turnover dropped by 53.5 per cent to 224.03 million shares valued at N2.01 billion in 3,127 deals. Zenith Bank led the activities chart with a turnover of 45.37 million shares worth N927.74 million. LASACO Assurance followed with 42.34 million shares valued at N12.69 million while Access Bank placed third with 21.65 million shares worth N129.30 million.

    Most analysts remained cautious about the outlook for the market, despite the two-day recovery. “Although we witnessed bargain hunting by investors during mid-week, we still maintain an overall bearish outlook in the near term,” Afrinvest Securities stated.

    Analysts at Cordros Securities maintained that there were no positive catalysts for sustained rally in the meantime, advising investors to trade cautiously in the short term. Analysts however reiterated positive outlook over the mid to long-term citing stable macroeconomic fundamentals and attractive valuation.

  • Nigerian Breweries floats N15b commercial papers

    Nigeria’s largest brewer, Nigerian Breweries Plc on Thursday launched a bid to raise N15 billion through issuance of new commercial papers (CPs). The issuance is part of the company’s N100 billion CP programme.

    The brewer is offering 90-day and 182-day CPs to investors with a view to raising short-term funds for its operations. The 90-day CPs carry effective and discount yields of 11.590 per cent and 11.2680 per cent respectively while the 182-day CPs carry 14.430 per cent and 13.4614 per cent respectively.

    Both issuances have been rated Aa by Agusto and AA by Global Credit Rating (GCR).

    The Series 1 90-day CPs are expected to mature on Monday July 22, 2019 while the Series 2 182-day CPs will mature on Tuesday, October 22, 2019.

    The offers opened Thursday and will close on Thursday, April 18, 2019. The settlement date is Tuesday, April 23, 2019.

    The new fund raising comes on the heels of the recent decision of the board of Nigerian Breweries to pay out the entire net profit of N19.4 billion recorded in 2018 as cash dividend to shareholders for the business year, despite decline in the performance of the company.

    Shareholders will receive final dividend of N14.6 billion in addition to N4.8 billion earlier paid by the company. A breakdown showed that shareholders will receive a final dividend per share of N1.83 in addition to interim dividend of 60 kobo, bringing total dividend per share for the year to N2.43.

    Read Also: Nigerian Breweries gets Corporate Affairs Director

    The dividend payout for the 2018 business year represented 41.2 per cent decline on the payout for 2017, reflecting the decline in the performance of the company. Nigerian Breweries had paid out its entire net earnings of N33.01 billion as cash dividend in 2017, representing dividend per share of N4.13.

    Key extracts of the audited report and accounts of Nigerian Breweries for the year ended December 31, 2018 showed that turnover dropped by 5.8 per cent from N344.53 billion in 2017 to N324.339 billion in 2018. Operating profit declined by 35.3 per cent from N57.13 billion to N36.96 billion. Profit before tax also dropped from N46.57 billion to N29.36 billion.

    After taxes, net profit declined by 41.2 per cent from N33.01 billion to N19.4 billion. Earnings per share consequently dropped from N4.13 to N2.43 while net asset per share slipped by 6.8 per cent from N22.37 in 2017 to N20.84 in 2018.

    Company Secretary and Legal Director, Nigerian Breweries Plc, Uaboi Agbebaku, stated that the 2018 performance was adversely impacted by the increased excise duty rates that came into effect during the year as well as other challenges in the operating environment.

    Nigerian Breweries had explained that its decision to pay out its entire net profit after tax as cash dividend to shareholders demonstrated its strong performance and confidence over its operations.

  • Why we want to delist our shares from NSE, by First Aluminium

    The board of directors of First Aluminium Nigeria Plc yesterday explained that the aluminium company is seeking to delist its shares from the Nigerian Stock Exchange (NSE) because of inactivity on the shares of the company and inability of the current listing to help in realizing the corporate objectives of the company.

    In a statement on the voluntary delisting, the company stated that the purpose for listing was to raise capital as well as provide liquidity to its shareholders but the current illiquidity nature of the market has rendered this primary corporate objective unattainable for the company.

    According to the company, over the last 12 months, there has been a significant fall in average daily trading volumes to 2,918 shares between July 2017 and June 2018 and further dip to 2,816 shares between July 2018 and December 2018.

    “Neither the company nor any shareholder is benefiting from the continued listing on the NSE. Furthermore, rationalization of operational expenses to support the company’s business and to meet the needs of various stakeholders as the attendant cost required to comply with its listing requirements including filing fees, penalties or sanctions, are not commensurate with the benefits to the company,” First Aluminium stated.

    ALUCON Holdings SA, the majority core investor that holds about 75.48 per cent equity stake in First Aluminium Nigeria, is offering to buy out willing minority shareholders. Minority shareholders hold about 24.52 per cent equity stake in the company. ALUCON Holdings is offering to pay 55 kobo per share. Alternatively, shareholders can trade their shares on the NSE. However, a shareholder that desires to remain a shareholder of an unlisted First Aluminium Nigeria Plc shall be free to do so.

    According to the company, over the past seven years, there have been little or no trading activity on the shares held by the minority shareholders while the share price was stuck at 50 kobo for about six years. It has since dropped further below nominal value.

    “Shareholders are not benefitting from the continued listing as they are not getting exit opportunities and their investments have been locked up, thereby finding it difficult of their shareholding. Neither the company nor its shareholders have benefitted as the company’s shares continue to trade at a significant discount to the intrinsic value,” First Aluminium stated.

    The company noted that the voluntary delisting will offer exit opportunities to shareholders who do not wish to remain in an unlisted public company.

    Following a resolution by the board of directors of the company on August 08, 2018, shareholders of First Aluminium Nigeria had at the annual general meeting on September 25, 2018 approved the voluntary delisting of the entire issued share capital of 2.11 billion ordinary shares of 50 kobo each. First Aluminium Nigeria was listed on the NSE in 1992.

    The voluntary delisting will become effective upon the obtainment of the written approval of the NSE.