The Nation Newspaper

Category: Equities

  • Consolidated Hallmark lists 1.13b private placement shares

    Consolidated Hallmark Insurance (CHI) Plc yesterday formally concluded its N734.5 million private placement deal with the listing of 1.13 billion ordinary shares of 50 kobo each that arose from the placement.

    The additional listing at the Nigerian Stock Exchange (NSE) increased the total issued and fully paid up shares of CHI from 7.0 billion to 8.13 billion ordinary shares of 50 kobo each. CHI’s share price rose by 6.90 per cent to 31 kobo yesterday at the NSE.

    The Nation had exclusively on Monday reported that the Niger Delta Exploration & Production (NDEP) Plc had acquired about 14 per cent equity stake in CHI under a private placement deal. The NDEP is an integrated oil and gas investment company quoted on the NASD OTC Securities Exchange. With investments in downstream, midstream and upstream assets, the CHI deal was believed to be the first direct investment by NDEP in insurance sector.

    Under the special-purpose private placement deal, NDEP acquired 1.13 billion ordinary shares of 50 each of CHI at 65 kobo per share. The offer price represented a significant premium for CHI, which had closed at the weekend at 29 kobo per share.

    A market source said the deal comes with synergies for the two companies with NDEP’s shareholding providing CHI with increased access to the lucrative oil and gas insurance business.

    Shareholders of CHI had earlier authorised the board of the company to undertake the N734.5 million private placement. To create headroom for the deal, shareholders had increased the authorised share capital of the company by creating additional 5.0 billion new ordinary shares of 50 kobo each. The authorised share capital was increased from  N5 billion of 10 billion ordinary shares of 50 kobo each to N7.5 billion made up of 15 billion ordinary shares of 50 kobo each.

    CHI has been raising additional equity funds to strengthen its balance sheet in a proactive step aimed at positioning the company on a good footing in the event of much-expected recapitalisation and consolidation of the insurance sector.

    It had successfully raised N500 million new equity funds from its shareholders in the fourth quarter of 2017. The company offered 1.0 billion ordinary shares of 50 kobo each to existing shareholders at a price of 50 kobo per share. The rights issue was pre-allotted on the basis of one new ordinary share for every six ordinary shares held as at the close of business on Monday August 28, 2017. Application list for the rights issue opened on Monday, October 16 and ran till Wednesday, November 22, 2017.

    Most analysts believed that the increasing capital raising exercises by insurance companies were proactive steps ahead of envisaged consolidation of the sector, despite the recent cancellation of a new capital structure proposed by the National Insurance Commission (NAICOM).

     

  • 2018 was a tough year, says Greif

    Greif Nigeria Plc has forewarned investors that the immediate past business year was a very challenging year for the company.

    In a regulatory filing yesterday, the company stated that economic and competitive environment in the steel drum and packaging sector gave rise to a very tough situation for its business, which resulted in the closure of two of its branches during the 2018 financial year.

    The company stated that it could not meet the timeline for the filing of its 2018 audited financial statements for the year ended October 31, 2018 on the due date of January 29, 2019. because it had to carefully scrutinise the operations during the year.

    According to the company, the delay was due to the fact that the external auditors had to exercise due diligence on the financial statements during the audit exercise to ensure all tax related issues were resolved, and make certain that the results reflect the actual position of business operations for the year, as well as conform with all relevant statutory requirements.

    Greif expects to release the audited financial statements for the 2018 business year on or before February 15, 2019.

     

  • Equities open with N41b gain

    Nigerian equities reopened yesterday with a modest rally as bargain-hunters sought in large-cap banking and consumer goods stocks.

    Benchmark indices at the Nigerian Stock Exchange (NSE) closed yesterday with an average gain of 0.35 per cent, equivalent to net capital gain of N41 billion. The gain helped to reduce the negative average year-to-date return to -2.18 per cent.

    The All Share Index (ASI)-the main index that tracks share prices at the stock market, rose from its opening index of 30,636.36 points to close at 30,745.05 points. Aggregate market value of all quoted equities also increased correspondingly from its opening value of N11.424 trillion to close at N11.465 trillion.

    With 17 advancers to 20 decliners, the positive market situation was due largely to gains recorded by highly capitalised stocks in the financial services and fast moving consumer goods companies. Analysts at Cordros Capital attributed the positive overall market position to renewed interest in first-tier banking stocks. The Nation had yesterday reported that four leading banks were set to announce their audited financial statements and dividend recommendations in the next few days.

    Most sectoral indices also closed on the upside. The NSE Consumer Goods Index appreciated by 1.07 per cent. The NSE Insurance Index rose by 0.70 per cent. The NSE Banking Index appreciated by 0.19 per cent while the NSE Industrial Goods Index inched up by 0.02 per cent. However, the NSE Oil and Gas Index declined by 1.12 per cent.

    “We expect to see bargain hunting till mid-week as investors position in previous decliners,” Afrinvest Securities stated.

    Nigerian Breweries led the gainers with a gain of N3.90 to close at N77.90. Stanbic IBTC Holdings followed with a gain of 70 kobo to close at N46. Red Star Express rose by 50 kobo to close at N5.50.Custodian Investment appreciated by 30 kobo to close at N6.80 while Dangote Flour Mills added 20 kobo to close at N6 per share.

    On the negative side, Forte Oil led the losers with a drop of N2.50 to close at N27. Total Nigeria followed with a drop of N2.40 to close at N220.90. NASCON Allied Industries declined by 40 kobo to close at N17.50. UAC of Nigeria dropped by 20 kobo to close by N9. Champion Breweries dropped by 18 kobo to close at N1.62 while Oando dipped by 10 kobo to close at N4.85 per share.

    Total turnover stood at 183.67 million shares worth N1.04 billion in 2,911 deals. Fidelity Bank was the most active stock with a turnover of 36.62 million shares worth N82.4 million. Transnational Corporation of Nigeria followed with 34.27 million shares worth N43.68 million while Diamond Bank ranked third with 29.47 million shares worth N68.07 million.

    Analysts at Cordros Capital remained cautious citing macroeconomic concerns. “Our outlook for equities in the short-to-medium term remains conservative, in the absence of a near term positive catalyst and amidst brewing political concerns,” Cordros Capital reiterated.

     

  • Vitafoam Nigeria grows Q1 profit by 123%

    Vitafoam Nigeria Plc started its new financial year on a stronger footing with considerable growth across key performance indices.

    Key extracts of the interim report and accounts of Vitafoam Nigeria for the three-month period ended December 31, 2018 showed that turnover rose by 26.3 per cent while profits before and after tax doubled by 98.48 per cent and 123.14 per cent respectively.

    Group turnover stood at N6.38 billion in December 2018 as against N5.05 billion recorded in comparable period of 2017. Profit before tax rose from N258.53 million to N513.12 million while profit after tax jumped from N162.17 million to N361.87 million. Earnings per share also increased from 13 kobo by December 2017 to 33 kobo in December 2018.

    Group Managing Director Vitafoam Nigeria Plc Mr Taiwo Adeniyi  said the company was poised to sustain its impressive growth in the years ahead.

    He said the first quarter results of the company showed that its growth trajectory, which recovered from a net loss of N127.69 million in 2017 to a net profit of N601.92 million in 2018, is sustainable.

    On the basis of the 2018 results, the board of Vitafoam Nigeria had recommended cash dividend of N260.51 million, representing a dividend per share of 25 kobo, in addition to bonus share of one new ordinary share of 50 kobo each for every five ordinary shares of 50 kobo each.

    Key extracts of the audited report and accounts for the year ended September 30, 2018 showed that Vitafoam Nigeria recorded impressive growth in sales and profitability. Group turnover rose from N17.69 billion in 2017 to N19.53 billion in 2018. Profit before tax jumped from N18.13 million in 2017 to N793.85 million in 2018. After taxes, the company reversed net loss of N127.69 million recorded in 2017 with a net profit of N601.92 million in 2018. Earnings per share thus improved from a loss of 15 kobo in 2017 to a gain of 57 kobo in 2018.

  • NDEP acquires major stake in Consolidated Hallmark

    Niger Delta Exploration & Production (NDEP) Plc  has acquired about 14 per cent equity in Consolidated Hallmark Insurance (CHI) Plc, a major shareholding change that may affect the composition of the board of the insurance firm.

    A regulatory document obtained at the weekend indicated that CHI has received regulatory approval to close a N734.5 million private placement deal with NDEP,  an integrated oil and gas investment company quoted on the NASD OTC Securities Exchange. With investments in downstream, midstream and upstream assets, the CHI deal is believed to be the first direct investment by NDEP in insurance sector.

    Under the special-purpose private placement deal, NDEP is acquiring 1.13 billion ordinary shares of 50 each of CHI at 65 kobo per share. The offer price represents a significant premium for CHI, which closed at the weekend at 29 kobo per share.

    CHI currently has total issued share capital of 7.0 billion ordinary shares of 50 kobo each. Post-private placement share capital will be 8.13 billion ordinary shares of 50 kobo each, giving NDEP 13.9 per cent equity stake.

    A market source said the deal comes with synergies for the two companies with NDEP’s shareholding providing CHI with increased access to the lucrative oil and gas insurance business.

    CHI’s shareholders had earlier authorised the board of the company to undertake the N734.5 million private placement. To create headroom for the deal, shareholders had increased the authorised share capital of the company by creating additional 5.0 billion new ordinary shares of 50 kobo each. The authorised share capital was increased from  N5 billion of 10 billion ordinary shares of 50 kobo each to N7.5 billion made up of 15 billion ordinary shares of 50 kobo each.

    CHI has been raising additional equity funds to strengthen its balance sheet in a proactive step aimed at positioning the company on a good footing in the event of much-expected recapitalisation and consolidation of the insurance sector.

    It had successfully raised N500 million new equity funds from its shareholders in the fourth quarter of 2017. The company offered 1.0 billion ordinary shares of 50 kobo each to existing shareholders at a price of 50 kobo per share. The rights issue was pre-allotted on the basis of one new ordinary share for every six ordinary shares held as at the close of business on Monday August 28, 2017. Application list for the rights issue opened on Monday, October 16 and ran till Wednesday, November 22, 2017.

    Most analysts believed that the increasing capital raising exercises by insurance companies were proactive steps ahead of envisaged consolidation of the sector, despite the recent cancellation of a new capital structure proposed by the National Insurance Commission (NAICOM).

    Under the cancelled NAICOM’s tier-based minimum solvency capital policy, insurers were to be classified into three tiers according to the minimum capital base and risk-bearing capacity. Tier 1 insurance companies were to be required to have minimum capital base of N9 billion for general insurance and N6 billion for life insurance, implying a composite capital base of N15 billion. Tier 2 companies were to be divided into two categories, with N4.5 billion minimum capital base for general insurance and N3 billion for life assurance. Thus a composite insurance-general and life insurance, would have been required to have minimum capital base of N7.5 billion. Tier 3 companies would continue to operate on the existing minimum capital base of N3 billion for general insurance and N2 billion for life insurance, implying a composite capital base of N5 billion for a composite tier 3 insurance company.

    Under the risk-based capitalisation approach, tier 1 companies will be able to undertake all risks including annuity and high-level special risks such as energy and aviation risks. Tier 2 companies will undertake retail insurance as prescribed under Tier 1, including commercial and industrial risks and group life assurance while tier 3 companies will only be able to write retail insurance only including micro insurance, motor, fire, agriculture, compulsory liability insurances, individual life, health and miscellaneous insurance.

  • AFEX, Proshare team up on commodities market

    Nigeria’s first private sector commodity exchange, AFEX Commodities Exchange Limited and financial information services provider, Proshare Nigeria Limited, at the weekend agreed to work together for the development of the nation’s commodities market.

    Under the partnership, AFEX will allow Proshare access to commodities market’s data and information, while Proshare communicate activities and developments at AFEX to the public as part of efforts to foster transparency, education and growth.

    In part fulfillment of imperatives under this partnership, Proshare has developed a dedicated AFEX page within its platform to present news, data and analysis regarding the commodities market from a single source. In the same vein, AFEX has granted Proshare WebTV (WebTV) access to live digital broadcast of its activities which we will see unfold in the coming months.

    With this partnership, Proshare now has major securities exchanges integrated into its platform, following earlier partnerships with NASD OTC Securities Exchange and FMDQ OTC Securities Exchange in 2016.

    Business Development Manager, AFEX Commodities Exchange Limited, Mr. Akinyinka Akintunde, said the partnership is a reflection of the company’s commitment to educate and foster a transparent culture for the commodities market in Nigeria.

    According to him, the partnership is poised to encourage further learning and increase the impact AFEX has had within the last four years of its establishment; having created access to markets that boosted the incomes of over 40,000 farmers by up to 40 per cent over the period.

    He added that investors, especially retail investors, can now access information from a wide range of investment opportunities.

    “It is no secret that AFEX considers commodities exchanges as critical drivers of economic development and transformation, and while we are creating a world class commodity exchange that enhances the efficiency and profitability of the country’s agricultural and financial sectors, we are glad to have Proshare as a partner in sharing details of our activities and victories on this journey,” Akintunde said.

    Technical Director and Chief Operating Officer, Proshare Nigeria Limited, In addition, Reshu Bagga said that the partnership would enable Proshare to foster its core objectives of enlightening, educating and empowering investors through the provision of credible, reliable and timely information relevant for intelligent investing.

  • Emerging market regulators consult on sustainable finance

    Securities regulators from growth and emerging markets are seeking public feedback on proposed recommendations related to the development of sustainable finance in capital markets and the role of securities regulators in this area.

    Under the auspices of the Growth and Emerging Market Committee (GEMC) of the International Organisation of Securities Commission (IOSCO), emerging market regulators at the weekend published the consultation report on sustainable finance in emerging markets and the role of securities regulators, which proposes 11 recommendations for emerging market member jurisdictions to consider when issuing regulations or guidance regarding sustainable financial instruments. Nigeria is a member of IOSCO.

    Among other things, the recommendations propose requirements for disclosure of material Environmental, Social and Governance (ESG) specific risks, aimed at enhancing transparency.

    The consultation report explores the trends and challenges that influence the development of sustainable finance in emerging capital markets. It also provides an overview of the initiatives that regulators, stock exchanges, policy makers and other key stakeholders in emerging markets have undertaken in this area.

    The report identifies the pre-requisites for creating an ecosystem that facilitates sustainable finance, such as an appropriate regulatory framework and fit-for-purpose market infrastructure, reporting and disclosure requirements, governance and investor protection guidelines and mechanisms to address needs and requirements of institutional investors.

    Given the global nature of sustainable instruments, the GEMC believes its recommendations will benefit both issuers and investors by improving the consistency of regulation of sustainable finance in emerging markets.

    The proposed recommendations include areas on integration by issuers and regulated entities of ESG-specific issues in their overall risk appetite and governance, ESG-specific disclosures and reporting ; data quality; definition of sustainable instruments; eligible projects and activities; integration of ESG-specific issues into the investment analysis, strategies and overall governance of institutional investors and building capacity and expertise for ESG issues.

  • We will sustain our growth trajectory, says NAHCO

    •New MD unveils growth plan

    The management of Nigerian Aviation Handling Company (NAHCO) Plc has assured that the company will sustain its upwardly growth trajectory as the company seeks to retune its operations to deliver greater values to customers and better returns to shareholders.

    Managing Director, Nigerian Aviation Handling Company (NAHCO) Plc, Mrs Olatokunbo Fagbemi, said the company would build on existing advantages and open up new opportunities to sustain impressive growths in the years ahead.

    She said the company will reenergize its system to ensure improved customer service in lines with international standards.

    “My top priority is very simple, it is to get everything right because when we get everything right for the customer and we deliver the right kind of service, then we get the right kind of income that can trickle down to profit and it is from the profit that we are going to be able to pay the right kind of dividend,” Fagbemi said.

    According to her, the company will going forward enhances its processes to create an enviable place to work in, a company that is operating in line with international standards, the one that follows all the regulations and deliver greater stakeholder value.

    Fagbemi, who recently took over the management of the company, spoke when the newly appointed directors and executives members of the company visited the Nigerian Stock Exchange (NSE).

    “A lot of work has been done in the past, what I will do is build on what is there, the areas where there are gaps, my priority will be to close those gaps and ensure that we deliver services in a safe and secured manner,” Fagbemi said.

    She said the company will invest in human capacity and technologies to ensure that the company continuously has the requisite people with the right knowledge and the right processes to deliver world-class services in line with ICAO and IATA standards.

    “What we are going to do is put into our people the right kind of knowledge, the right kind of vision and passion that drives everybody to excel. Because even if we put in the best systems, we have the best facilities, we have the best equipment, if we don’t get the people right, it is going to be a waste,” Fagbemi said.

    Against the background of the performance of the company in the third quarter, she said the company is implementing policies that will enable it to sustain growth irrespective of the challenges in the economy.

    According to her, while there are challenges in every company and the economy, the company’s plan and strategies enable it to identify challenges and risks and find ways to tackle these.

    “We have strategies in place and that’s why we are taking early decisions already. We started last year, we invested in equipment and we are going to do more so that we don’t wait to run out of equipment before we run around. We are also refreshing our facilities so we are not going to wait until everything falls apart before we put it together,” Fagbemi said.

    Key extracts of the interim report and accounts of NAHCO for the period ended September 30, 2018 showed that profit before tax doubled by 107 per cent to N731.8 million in third quarter 2018 as against N336 million recorded during the comparable period of 2017. Profit after tax also increased by 110 per cent from N287.4 million to N601.3 million. The company’s turnover had risen by 25 per cent to N7.25 billion.

    NAHCO, a diversified group with interests in aviation cargo, aircraft handling, passenger facilitation, crew transportation and aviation training, currently serves more than 35 airlines at 11 airports across Nigeria, with plans to expand operations to other African countries. It handles about 70 per cent of domestic and foreign airlines operating in Nigeria.

    Incorporated on December 6, 1979 as an aviation servicing company, NAHCO started operations in April 1979 with the commissioning of the Murtala Muhammed International Airport, Lagos. The Federal Government of Nigeria, through Federal Airports Authority of Nigeria (FAAN), initially held 60 per cent equity interest in the company while four foreign airlines – Air France, British Airways, Sabena and Lufthansa – shared the remaining 40 per cent in various ratios. In 2005, NAHCO was privatized and subsequently listed on the NSE in 2006.

     

     

  • Fidson Healthcare reduces offer size, price

    Fidson Healthcare Plc has reduced the size and price of its planned rights issue as the healthcare company considers the prevailing market situation.

    Fidson had planned to raise N4.5 billion new equity funds through a rights issue of 900 million ordinary shares of 50 kobo each to existing shareholders at N5 per share.  The rights issue had been pre-allotted on the basis of three new ordinary shares for every five ordinary shares held as at the close of business on July 5, 2018.

    Fidson has now secured approval of the Securities and Exchange Commission (SEC) to revise the offer size and price. Fidson will now be offering 750 million ordinary shares of 50 kobo each at N4 per share. The rights issue will now be pre-allotted on the basis of one new ordinary share for every two ordinary shares held as at December 28, 2018. Authorities at the Nigerian Stock Exchange (NSE) had earlier approved the rights issue.

    Shareholders of Fidson had indicated their willingness to support the company’s plan to raise new equity funds.

    Shareholders commended the performance of the company noting that recapitalisation would create better opportunities for the company.

    Founder, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu urged shareholders to pick up their rights so that the company could further expand its business.

    According to him, Fidson has shown that it is a business with a promising outlook.

    Former President, Nigerian Shareholders Solidarity Association (NSSA), Chief Timothy Adesiyan said the company’s turnover has increased tremendously.

    He noted that the reduction in finance cost enhanced the dividend payout, showing the prudence of the management and board of the company.

    Chairman, Fidson Healthcare Plc, Mr. Segun Adebanji, said the net proceeds of the rights issue would be used to refinance some expensive debts, strengthen the working capital position of the business and fund some strategic capital expenditure.

    According to him, the capital injection from the rights issue would enable the board and management to reposition the business in order to take advantage of visible growth opportunities.

    He commended shareholders for their continued support, assuring that the company has a promising future.

    “Together we will continue to reap the bountiful rewards of our investment in the year ahead,” Adebanji said.

  • Notore posts N2.99b operating profit in Q1

    Notore Chemical Industries Plc grew its operating profit by 412.4 per cent to N2.99 billion in the first quarter but plant downtime and finance costs continued to moderate the top-line and bottom-line of the agricultural company.

    Key extracts of the interim report and accounts of Notore for the three-month period ended December 31, 2018 released yesterday at the Nigerian Stock Exchange (NSE) showed that operating profit rose from N580 million in 2017 to N2.99 billion in 2018. Turnover however declined from N5.99 billion recorded in first quarter ended December 31, 2017 to N4.32 billion in comparable period of 2018. With net finance cost of N3.09 billion in 2018, Notore ended with a net loss of N93.35 million, a significant improvement compared to the loss of N1.958 billion recorded in the corresponding period of 2017.

    Meanwhile, Notore’s working capital has improved significantly as a result of the refinanced short term facilities of N49.5 billion to long term seven year facilities in 2018.

    The management of the company attributed the decline in revenue largely to plant downtime caused by a maintenance programme on its plant during the period under review.

    The company explained that it missed the production target for the first quarter of the 2019 business year because of the maintenance programme carried out during the same period.

    “The maintenance programme built in some reliability into the plant and Notore expects to enhance its plant reliability further when it carries out its turn-around maintenance (TAM) programme later in the year. Notore has secured the TAM fund, which should be disbursed this quarter; nevertheless, it has commenced the ordering of critical components of the items under the TAM scope in order to keep with the TAM schedule,” Notore stated.

    The management of the company assured that the company will perform better in the current financial year noting that Notore expects to exceed its 2018 financial year urea production figures and also work on financial initiatives to reduce its finance cost.

    “The projected cost savings from Notore’s leverage is expected to boost its profitability. Furthermore, Notore believes that the current Federal Government policies in the fertilizer space and demand for NPK and NPK specialty blends are quite favourable for its business, consequently, Notore will be producing a significant quantity of NPK and NPK specialty blends this financial year to boost its revenues,” Notore stated.

    According to the company, the fertilizer market in Nigeria has been robust as it sold all the urea that it produced during the period into the domestic fertilizer market. Notore believes that the domestic fertilizer market is yet to reach its full potential. Furthermore, the demand for urea and compound fertilizers, such as NPK, from the West African markets and neighbouring countries bordering the northern part of the country is also quite significant.

    Notore noted that constant natural gas, from main feedstock for producing urea fertilizer, supply has been one of its key strengths.