The Nation Newspaper

Category: Equities

  • Stock Exchange lifts suspension on four companies

    Authorities at the Nigerian Stock Exchange (NSE) yesterday lifted suspension on trading in the shares of four companies, after the companies submitted their relevant financial statements. The companies included Premier Paints Plc, Ekocorp Plc, Austin Laz & Company Plc and Academy Press Plc.

    The NSE had in the second half of 2017 suspended trading in the shares of the four companies for failing to adhere to best corporate governance and extant post-listing requirements that require quoted companies to submit their periodic financial statements and reports within stipulated timelines.

    Post-listing rules at the NSE require quoted companies to submit their audited earnings reports, not later than 90 calendar days, or three months, after the expiration of the period. The rules also require quoted companies to submit interim report not later than 30 calendar days after the end of the relevant period.

    Not less than 83 per cent of quoted companies use the 12-month Gregorian calendar year as their business year. The business year thus terminates on December 31. While March 31 is usually the deadline for submission of annual report for companies with Gregorian calendar business year, the deadline for the quarterly report is a month after the quarter.

    Head, Listings Regulation Department, Godstime Iwenekhai, said the four of Premier Paints, Ekocorp, Austin Laz & Company and Academy Press have submitted their respective financial statements.

     

  • Unity Bank optimistic after extensive clean up

    Unity Bank of Nigeria Plc now has no non-performing loans and has returned to profitability after the directors of the bank took decisions to clean up the balance sheet of legacy toxic assets.

    In a one-off total de-risking of its balance sheet, the bank in 2017 wrote off a total of N16 billion that rose from goodwill from legacy merger issues, a decision that negatively impacted the bottom-line and led to a net loss of N14.2 billion in 2017.

    Explaining the background to its current performance, the bank stated that although the clean-up of its books negatively impacted its performance in 2017, the bank is now in a better position to grow and create better values for shareholders.

    The bank noted that its new board and management took the bold action to tackle lingering effects of legacy problems in a bid to eliminate the drag on the bank in the form of huge legacy non-performing loans, an inefficient operating structure which manifested in excessive costs, poor branch spread and inadequate application of technology amongst others.

    According to the bank, signs of a return to improved performance was evident in the third quarter 2018 results, which showed a profitability of N644 million.

    The third quarter 2018 results also showed the ratio of non-performing loans standing at zero per cent, a clear indication of the management’s excellent risk assessment for the period while a marginal loan-to-deposit ratio of 3.6 per cent indicates a significant room for growth and attendant income boost.

    The bank stated that ongoing strategic initiatives are geared towards a complete transformation of the bank and setting it on the path of strong and sustainable growth and profitability.

    “The courageous action taken by the bank towards cleaning up the observed issues thus resulted in a negative capital base but also gave birth to a leaner, smarter and dynamic bank with a healthy balance sheet,” the bank stated.

    To sustain the new momentum and return the bank to one of the best performing in the Nigerian market, the bank said it has been making significant progress in its ongoing capital raising exercise and it is firmly on course to achieve sustainable growth and sound performance.

    Unity Bank said it is optimistic that its liquidity and working capital will be significantly enhanced with the anticipated successful capital raising exercise, a development that is poised to make the bank one of the most liquid in the Nigerian market.

    According to the bank, with a zero per cent non-performing loans portfolio and enhanced credit management process, it has solved its debilitating legacy problems and will now move more sure-footedly towards sustained revenue and profits growth, while capital adequacy is expected to rise above the regulatory minimum after the capital raising exercise.

    The bank added that it has taken a number of strategic initiatives among which include; a revised market focus that has, and will continue to increase agriculture and agro-allied financing, youth and digital banking and women financing; enhanced retain banking drive and cost containment among others.

    Key extracts of the third quarter report for the period ended September 30, 2018 showed that gross earnings dropped from N65.03 billion in 2017 to N26.125 billion in 2018. Interest income had declined from N63.15 billion to N20.409 billion. Operating income stood at N15.54 billion in 2018 as against N40.39 billion in 2017. Profit before tax slumped to N643.78 million, from N2.72 billion. Profit after tax dwindled to N585.84 million in third quarter 2018 as against N2.448 billion in third quarter 2017. With these, earnings per share dropped from 20.94 kobo to 5.01 kobo.

     

     

  • Nahco doubles Q3 net profit to N601.3m

    Nigerian Aviation Handling Company Plc (Nahco) doubled its bottom-line in the third quarter, raising prospects of increased returns to shareholders.

    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.

    Managing Director, Nigerian Aviation Handling Company (Nahco) Plc, Mr. Idris Yakubu, said the third quarter performance further showed the gains series of short and medium-term process reviews and service improvement initiatives, which have led to enhanced service delivery and improved customer satisfaction.

    “We are extremely delighted with the recent results. It shows that the various initiatives that we are implementing to delight our customers are indeed working. A lot of credit for this performance, no doubt, goes to the board of the company who have supported and trusted our leadership, our staff who are diligent and have become more responsive, our loyal clients who trusted us to handle all their business, and indeed, other stakeholders of the company,” Yakubu, who took over the management of the company in November 2017, said.

    He expressed optimism that the company looks forward to an improved performance by the year-end as all indices point to a strong showing and the kind of performance that the company has not seen in recent years.

    Nahco is a diversified group with interests in aviation cargo, aircraft handling, passenger facilitation, crew transportation and aviation training. The company 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.

    Noted for its strong commitment to staff welfare, Nahco was adjudged as one of the Top 100 Best Places to work in Nigeria in 2018 by Jobberman.

  • Consolidated Hallmark seeks approval for N734.5m private placement

    The board of Consolidated Hallmark Insurance Plc has scheduled an extraordinary general meeting of shareholders of the insurance company to consider and approve a private placement aimed at raising about N734.5 million.

    Shareholders are expected to meet by this month end to consider increase in authorised share capital of the company by creation of additional 5.0 billion new ordinary shares of 50 kobo each. Consolidated Hallmark Insurance currently has authorised share capital of N5 billion, consisting of 10 billion ordinary shares of 50 kobo each.

    According to a regulatory filing at the Nigerian Stock Exchange (NSE), the meeting is expected to increase the authorised share capital of the company to N7.5 billion, made up of 15 billion ordinary shares of 50 kobo each.

    Shareholders are thereafter expected to authorise the board of directors to undertake issuance of 1.13 billion ordinary shares of 50 kobo each at 65 kobo per share to raise new equity funds totaling N734.5 million through a private placement.

    Consolidated Hallmark Insurance 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.

     

  • Stock Exchange suspends trading on six companies

    Authorities at the Nigerian Stock Exchange (NSE) yesterday suspended trading on six companies for failing to adhere to best corporate governance and extant post-listing requirements that make it mandatory for quoted companies to submit their financial statements within stipulated timelines.

    The suspended companies included Fortis Microfinance Bank Plc, Thomas Wyatt Nigeria Plc, Multi-Trex Integrated Foods Plc, Golden Guinea Breweries Plc, Deap Capital Management & Trust Plc and Unity Bank Plc.

    In a circular signed by Head, Listings Regulation Department, Nigerian Stock Exchange (NSE), Godstime Iwenekhai, the Exchange indicated that the companies were suspended after they failed to file their accounts and operational reports as required by the listing rules at the Exchange. The suspension will remain in place until the companies file the relevant accounts and reports.

    “In accordance with the rules set forth above, the suspension of the above listed companies will only be lifted upon the submission of the relevant accounts and provided the Exchange is satisfied that the accounts comply with all applicable rules of the Exchange,” the circular stated.

    However, Unity Bank subsequently submitted its audited accounts for the full-year ended December 2017 and the interim reports for the three quarters in 2018. The suspension on the bank might be lifted today.

    With the suspension, investors will not be able to trade on the shares of the companies, thus denying them opportunities to raise funds through such investments in case of financial needs.

    Post-listing rules at the NSE require quoted companies to submit their audited earnings reports, not later than 90 calendar days, or three months, after the expiration of the period. The rules also require quoted companies to submit interim report not later than 30 calendar days after the end of the relevant period.

    Not less than 83 per cent of quoted companies use the 12-month Gregorian calendar year as their business year. The business year thus terminates on December 31. While March 31 is usually the deadline for submission of annual report for companies with Gregorian calendar business year, the deadline for the quarterly report is a month after the quarter.

    NSE tags and applies fines on companies that fail to meet earnings reports’ deadline. Companies may pay fines that range from N100, 000 to more than N100 million as penalties for delay in the submission of their corporate earnings reports. Companies that also delayed their financial statements and accounts face threats of suspension and delisting in addition to the monetary fines.

     

  • May & Baker Nigeria to pay dividend on rights’ shares

    Shareholders of May & Baker Nigeria Plc will earn dividend on their existing shareholdings and their rights as the healthcare company assures that its strategic investments will increase returns to shareholders.

    May & Baker Nigeria is raising N2.45 billion in new equity funds through a rights issue to existing shareholders. The company is offering 980 million ordinary shares of 50 kobo each at N2.50 per share to existing shareholders. The rights issue has been provisionally pre-allotted on the basis of one new ordinary share for every one ordinary share held as at the close of business on Tuesday, September 4, 2018. Application list opened on Monday October 22, 2018 and will close on Wednesday November 28, 2018. Capital Assets Limited and Compass Investments &Securities Limited are the stockbrokers to the rights issue while Cordros Capital Limited and Afrinvest (West Africa) Limited are the issuing houses.

    Managing Director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor, said the company would pay dividend on the new ordinary shares to be issued through the rights issue, despite the fact that the net proceeds of the rights issue will be received towards the end of current business year.

    According to him, while the impact of the recapitalisation will become visible in the 2019 business year, the company will pay dividend for the 2018 business year on the old and new shares to be issued.

    He said the net proceeds of the rights issue will be invested in some key projects including N400 million to finance part of the company’s equity in Biovaccines Nigeria Limited, the joint venture company for local vaccine production and over N500 million on capacity expansion for one of its cash cow products, paracetamol for which it is building a dedicated plant. The company will also use N400 million to offset part of its current loan portfolio of N950 million while N500 million will be invested in marketing and brand building.

    He urged shareholders to pick up their rights as the company has bulging opportunities and great new potentials that will ensure higher returns to investors.

    “We derive our confidence mainly from the pedigree, performance track records and strategic plans of the company which we believe should appeal to all discerning investors. The new funds will be used to strengthen their investments and make the company more profitable,” Okafor said.

    He pointed out that May & Baker Nigeria was the first registered pharmaceutical company in Nigeria and the first to produce anti malaria and anti-infective medicines in Nigeria as well as the first to market human vaccines and produce anti-retroviral drugs in Nigeria.

    He noted that a five-year financial summary shows that the company has consistently grown revenue by more than 10 per cent since 2013 and it has shown capacity to make profits in the last five years with pre- tax profit doubling in the last two years.

    “Since 2014, May & Baker Nigeria has also consistently paid dividends which increased by over 300 per cent from 6.0 kobo in 2016 to 20 kobo in 2017 for every 50 kobo share,” Okafor said.

    He outlined that company has been making strategic investments including construction of Anti Retroviral drugs in Nigeria in 2006 and a World Health Organisation (WHO) standard pharmaceutical manufacturing plant known as the Pharmacentre in 2011.

    According to him, the Pharmacentre, which was among the few certified by the WHO for current Good Manufacturing Practice in 2014, has capacity to produce 6.0 billion tablets and 49 million bottles of 60ml liquid medicines annually.

    “We are also investing in key areas of healthcare where we have both comparative and competitive advantage, top among which include the joint venture with the federal government on local vaccine production. To us that investment is a goldmine because of the huge opportunities that exist in the Nigerian vaccine market,” Okafor said.

    May & Baker Nigeria recently signed a memorandum of understanding with the Federal Ministries of Health and Science and Technology to commercialize some locally discovered medicaments. In the first instance, it shall commence the commercial production of an anti sickle cell drug discovered by the National Institute for Pharmaceutical Research and Development. This drug holds a large potential because of the enormity of the sickle cell challenge in the country. Similarly, it is working with the Federal Institute of Industrial Research in Oshodi to develop and commercialize a nutraceutical product.

    Okafor said while the company is making local inroads, it has also signed marketing agreements with foreign companies to market herb-based medicines key to African disease profile, with some of these products already doing well in the market.

    “Our strategic goal is to become a preferred brand in Nigeria with the clear leadership of the market segments we deal in. We also want to become a regional healthcare powerhouse with strong and wide footprints in the sub Saharan market,” Okafor said.

     

  • Fidelity Bank grows profit by 24% to N20b in nine months

    Fidelity Bank Plc its bottom-line by 23.5 per cent to cross the N20 billion mark in the third quarter, putting the commercial bank on a stronger footing for better returns for the 2018 business year.

    Fidelity Bank’s share price rose by 4.50 per cent to N2.09 at the announcement of the results at the Nigerian Stock Exchange (NSE) at the weekend, the highest price gain in the banking sector.

    Key extracts of the interim report and accounts of Fidelity Bank for the nine-month period ended September 30, 2018 showed that profit before tax rose from N16.24 billion in third quarter 2017 to N20.06 billion in third quarter 2018. After taxes, net profit rose from N14.45 billion to N17.86 billion. Gross earnings had risen from N130.07 billion to N139 billion.

    The balance sheet showed that total assets grew by 21.9 per cent to N1.68 trillion in 2018 compared with N1.38 trillion recorded in comparable period of 2017. Total deposits; a measure of customer confidence, also increased by 27.3 per cent to close third quarter 2018 at N986.8 billion as against N775.3 billion in corresponding period of 2017.

    Despite inflationary trend, the bank’s expenses grew by 6.5 per cent to N50.6 billion due to increased technology investment and higher charges due to the Asset Management Corporation of Nigeria (AMCON). However, cost to income ratio remained relatively stable at 68.4 per cent in September 2018 compared with 67.5 per cent at the beginning of the year. Non-performing Loans (NPLs) ratio improved to 6.0 per cent as against 6.4 percent at the beginning of the year. Other regulatory ratios remained above the required thresholds with Capital Adequacy Ratio (CAR) at 17.0 per cent and Liquidity Ratio at 38.3 per cent.

    Chief Executive Officer, Fidelity Bank Plc, Mr Nnamdi Okonkwo, said the has continued to grow its market share by achieving significant traction across its business segments of corporate, commercial, Small and Medium Enterprises and digitally led retail banking.

    “We are delighted with our nine-month financial performance as we continue execution of our medium-term strategy, which has further yielded positive results, leading to impressive growths across key performance indices including profitability, total deposits and balance sheet size,” Okonkwo said.

  • May & Baker Nigeria: we’ve laid foundation for growth

    The management of May & Baker Nigeria Plc at the weekend assured investors that the company has laid a strong foundation that would ensure sustainable growth in the years ahead.

    At an interactive session at the Nigerian Stock Exchange (NSE) at the weekend, Managing Director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor said the company has a bright outlook given recent investments and key growth initiatives being implemented by the company.

    He noted that company has remained a leading company in the Nigerian healthcare sector for several decades including being the first pharmaceutical company in Nigeria, the first company to introduce human vaccines in Nigeria, the first company to obtain international ISO certification and the first to start local vaccines production project in Nigeria among others.

    He said May & Baker Nigeria’s pharmaceutical manufacturing complex in Ota, Ogun State is set to become the first company to obtain World Health Organisation (WHO) General Manufacturing Practice (GMP) certification in Africa, which will open up vast opportunities for the company to partake in global healthcare market.

    He said the company plans to harness existing opportunities to become the leading healthcare company in the Sub Saharan Africa (SSA), while maintaining its dominance as the leading pharmaceutical company in Nigeria.

    He outlined recent growth initiatives to include the launching of the local vaccines production project in collaboration with the Federal Government of Nigeria, agreement with the National Institute for Pharmaceutical Research and Development (NIPRD) for commercial production of anti sickle cell drug, NAPRISAN and agreement with foreign partner on sale and local production of nature care products among others.

    He urged shareholders to pick up their rights noting that the company has good potential for better returns in the years ahead.

    According to him, the company’s offer price of N2.50 for its ongoing rights issue is attractive given the investments that the company had made in recent years and many ongoing projects.

    Executive Director, Finance, May & Baker Nigeria Plc, Mr.  Ayodeji Aboderin, said the directors and professional parties to the company had reduced the offer price in consideration of the general lull at the stock market and given that the rights issue is for the existing shareholders of the company.

    He noted that the company will pay dividend on the rights’ shares even though the net proceeds for the offer might be received towards the end of the year.

  • Diamond Bank: no new major equity investor

    Diamond Bank Plc at the weekend debunked speculations in some quarters that a new core investor plans to inject equity capital into the commercial bank. The bank stated that its preferred option for its capital increase is an internal capital management programme.

    Some media reports, not The Nation, had reported that a new investor plans to take up major equity stake in the bank.

    In a regulatory filing at the Nigerian Stock Exchange (NSE) at the weekend, the bank stated that the bank was not in talk with any investor on equity capital injection.

    “Diamond Bank is not in talks with any party, global or otherwise, for any capital injection. While previous communication from the bank has highlighted a need to shore up the Bank’s Capital Adequacy Ratio (CAR), the preferred option is an internal capital management programme that has been explained in detail to analysts and investors,” the bank stated in the statement signed by Company Secretary and Legal Adviser, Diamond Bank, Uzoma Uja.

    The bank noted that while it recognises the need to expand its options in the short term, it has not entered into any discussions with any investor, adding that the investing public will be notified of any new development.

    Also, Diamond Bank at the weekend released its third quarter repzort for the period ended September 30, 2018, highlighting its strong focus on the Nigerian market, especially the retail sector through its technology led retail strategy to drive growth and position SMEs for competitiveness.

    The commercial banking group recorded gross earnings of N142.54 billion and pre and post tax profits of N3.08 billion and N1.65 billion respectively in third quarter 2018.

    The report showed that the bank’s retail strategy is quite rewarding as the bank recorded a landmark figure in the value of funds disbursement of over N1 billion to small business owners under the cash flow-based SME lending scheme in partnership with the Women’s World Banking (WWB), and this has earned the leading financial institution ranked among the first five SME customer bank in Nigeria in the KPMG customer service survey 2018.

    Despite the challenging trading environment, the bank’s contribution of non-interest income to profit increased by 10.81 per cent from N24.66 billion in third quarter 2018 to N27.32 billion in third quarter 2018 while Impairment charges dropped by 24.21 per cent from N33.21 billion to N25.17 billion.

    The bank’s retail and digital strategy has continued the expansion of financial inclusion programme with total number of banking agents rising to 70,052 in third quarter 2018 across Diamond Y’ello, BETA and CLOSA product lines. Apart from the disbursed N1 billion to Small and Medium Enterprises (SMEs), in partnership with Women’s World Banking as of September 30, 2018, the bank also Introduced SMEzone to the market – an information-sharing platform, aimed at positioning entrepreneurs for competitiveness while the sale of its UK subsidiary expected to be completed by year-end.

  • Sterling Bank assures on sustained growth

    •Net profit rises by 39% in Q3

    Chief Executive Officer, Sterling Bank Plc, Mr. Abubakar Suleiman has assured stakeholders that the commercial bank will sustain its positive growth trajectory and deliver better returns to investors.

    Speaking against the background of strong growths in the third quarter results of the bank, Suleiman said the bank has been able to sustain its steady growth due to focused implementation of its strategic intent of exceeding customers’ expectations.

    Sterling Bank sustained an impressive performance in the third quarter as strong top-line growth and efficient credit risks and cost management led to 39 per cent growth in net profit during the nine-month period.

    Key extracts for the nine-month period ended September 30, 2018 showed that Sterling Bank grew gross earnings by 21 per cent and profit after tax by 39 per cent. All major performance indices recorded double-digit growth, bucking the generally low trend in the banking sector.

    According to him, the robust growth of 31.2 per cent in non-interest income was driven by a growth in trading and transaction banking revenues, as the bank continues to prioritize efficiency of its digital banking platforms to support its retail drive.

    “Our strategic intent to be more customer-focused has continued to yield results; one of such recorded in the last quarter is the increase in the volume of transactions processed through our various electronic platforms since the start of the year. We achieved over one million monthly NIBBS Instant Payment transactions as at July 2018, a 73 per cent increase from the start of the year and expect to see continuing traction in this regard,” Suleiman said.

    Gross earnings rose by 21.1 per cent to N114.6 billion in third quarter 2018 compared with N94.6 billion recorded in comparable period of 2017. The top-line performance was driven by growths in both interest and non-interest incomes. Non-interest income rose by 31.2 per cent from N16 billion to N21 billion. Net interest income increased by 7.8 per cent from N36.9 billion to N39.8 billion. Net operating income thus improved by 26.3 per cent to N57.2 billion in third quarter 2018 as against N45.3 billion in third quarter 2017.

    The bank sustained steady growth in profitability as profit before tax grew by 29.5 per cent N8.5 billion as against N6.5 billion in corresponding period of 2017. After taxes, net profit rose by 39 per cent from N5.9 billion to N8.2 billion. Earnings per share thus improved from 21 kobo to 28 kobo.

    Underlying ratios also showed improvement in the intrinsic value of the bank. Pre-tax return on average equity improved from 9.6 per cent in third quarter 2017 to 10.8 per cent in third quarter 2018. Post-tax return on average equity also increased from 8.6 per cent to 10.4 per cent. Return on average assets was steady at 1.0 per cent while cost of risk improved from 1.8 per cent to 0.8 per cent.

    The balance sheet spread also showed increasing acceptance of the bank’s brand and continuing supports of the bank to the growth of the national economy. Customer deposits increased to N723.2 billion by September 2018 from N685.0 billion in December 2017. The bank’s net loans and advances increased by 10.7 per cent to N662.0 billion from N598.0 billion in December 2017. Total assets improved to N1.08 trillion as against N1.07 trillion recorded at the beginning of the year while shareholders’ funds increased from N102.9 billion in December 2017 to N106.2 billion in September 2018.

    The bank’s Liquidity Ratio (LR) improved from 30.5 per cent in December 2017 to 34.4 per cent in September 2018 while Capital Adequacy Ratio (CAR) stood at 11.4 per cent. Non-Performing Loan Ratio (NPLR) improved considerably from 6.2 per cent to 5.4 per cent.

    Suleiman pointed out that the bank’s Series 2 Notes issuance of N19.7 billion under its N39 billion debt issuance program was oversubscribed, adding that the net proceeds of the issuance would be recognized as Tier II capital after the regulatory approval.

    He said the buffer provided by the additional capital would give room for business expansion across the bank’s focus growth areas including health, education, agriculture, renewable energy and transportation sectors.

    “Going into the final quarter of the year, we aim to complete the ongoing implementation of a number of digital-led initiatives in line with our digitization drive. This is expected to further intensify the bank’s retail drive,” Suleiman assured.