The Nation Newspaper

Category: Equities

  • CAP reassures as shareholders approve N1.64b dividend

    The board and management of CAP Plc have assured that the company would continue to explore opportunities to grow its business and deliver competitive returns to shareholders in spite of the macroeconomic challenges.

    At the annual general meeting at Golden Tulip Festac, yesterday in Lagos, shareholders of the leading paint company approved a final dividend of N840 million, representing a dividend per share of N1.20. CAP had earlier paid an interim dividend per share of N1.15 on December 15, 2015, bringing total dividend for 2015 business year to N1.645 billion or N2.35 per share.

    Notwithstanding the contraction in purchasing power and the constraints in the macro economy, CAP, a subsidiary of UAC of Nigeria Plc, showed steadied performance with turnover rising by one per cent to N7.06 billion while profit before tax inched up by five per cent to N2.57 billion.

    Addressing the shareholders, chairman, CAP Plc, Mr Larry Ettah, said the board and management have worked out mitigating strategies to curtail the adverse impact of macroeconomic challenges on the performance of the company.

    He noted that while the largely expansionary fiscal policy of the government will seek to stimulate economic activities and generate employment and thus impact on companies such as CAP, the acute shortage of foreign exchange that started this year could adversely affect corporate performance.

    According to him, the cumulative effect of the scarcity of foreign exchange, falling oil prices, and the resurgence of restiveness in the Niger Delta, which could endanger the production output of 2.2 million barrels per day and the continued depletion of foreign reserves pose serious threats to businesses and social activities in 2016.

    “The board and management of your company are alive to these challenges and have outlined mitigating strategies to ensure that these headwinds do not significantly impact our business negatively in 2016,” Ettah assured.

    He pointed out that in order to further improve the company’s brand visibility and accessibility to consumers; it opened additional Dulux Colour Centres in Yola and Gombe and Dulux Colour Shops in Lafia, Ada-George Port Harcourt, Ado-Ekiti, Dugbe Ibadan, Agbor, Suleja, Lugbe Abuja and Jalingo in 2015.

    He added that the company has also retained its ISO 9001:2008 and 14001:2004 certifications on quality and environmental standards respectively, which underlined continuing offering of high quality products and services to customers and compliance with regulatory requirements and conduct in its operations.

  • Equities rally N294b gain as CBN releases forex guidelines

    Equities rally N294b gain as CBN releases forex guidelines

    The release of the much-awaited guidelines for the flexible foreign exchange policy of the Central Bank of Nigeria (CBN) triggered a scramble for Nigerian equities, leaving the market with a net gain of N294 billion.

    Against the background of sustained depression in share prices over the past three weeks attributed to foreign exchange (forex) uncertainties, the announcement by the CBN excited both foreign and domestic investors. With more than three advancers for every decliner, the stock market spiraled to its best performance so far this month.

    In the new flexible foreign exchange system, the apex bank will merge all existing segments of foreign exchange market into a single “window”, which pricing will be determined by market forces with limited intervention from the apex bank. In essence, Naira will flow according to market forces with effect from Monday June 20.

    Foreign investors, who account for more than half of Nigerian stock market transactions, who had stayed on the sidelines due to foreign restriction joined the bargain-hunting at the Nigerian Stock Exchange (NSE).

    Aggregate market value of all quoted equities rose to N9.579 trillion from its opening value of N9.285 trillion, indicating a gain of N294 billion. The All Share Index (ASI)-the benchmark index for the stock market, rose by 3.17 per cent to the month’s high of 27,891.96 points as against its opening index of 27,034.05 points. The steep gain pared the negative average year-to-date return to 0-2.62 per cent.

    Market pundits were unanimous that the release of the framework for the flexible forex policy was the main driver for the market.

    “Investments were largely stimulated by Central Bank’s clarification on its flexible foreign exchange policy which reduced uncertainty in the financial markets,” Cowry Asset Management stated.

    Dangote Cement, NSE’s most capitalised stock, led 32 other stocks on the gainers’ list with a gain of N8.20 to close at N172.20. Mobil Oil Nigeria followed with a gain of N7.99 to close at N169.50. Nigerian Breweries rose by N5.75 to close at N133.75. Guinness Nigeria added N4.90 to close at N102.90 while Guaranty Trust Bank gathered N1.44 to close at N19.95 per share.

    Total turnover was above average with the exchange of 588.42 million shares valued at N3.48 billion in 5,088 deals. The three most active stocks were United Bank for Africa (UBA), with 197.20 million shares; Skye Bank, 74.55 million shares and FCMB Group, with 54.49 million shares.

  • Berger Paints assures shareholders as new factory berths

    Berger Paints assures shareholders as new factory berths

    The board and management of Berger Paints Nigeria Plc have assured shareholders that the company would continue to grow the business value and improve returns on their investments as the paints manufacturing company sets to launch a new top-of-the-range manufacturing plant.

    At the annual general meeting yesterday in Lagos, chairman, Berger Paints Nigeria Plc, Dr. Oladimeji Alo, told shareholders that the impending launch of the company’s automated plant, the first of its kind in Sub-Saharan Africa, is expected to enhance the global competitiveness of the company’s products and increase significantly operational efficiencies.

    He said the new factory, which could be commissioned this year, would bring about tremendous improvement in the company’s operations adding that talks are ongoing with the appropriate authorities to secure tax break as pioneer status.

    Alo outlined that as part of the strategy to sustain the company’s competitive edge, special attention would be placed on increasing earnings and profitability, optimization of existing assets and business operations, investment in the leading brands, entering new categories with emphasis on Nano castings, and driving efficient financial management among others.

    He pointed out that in spite of the challenging operating environment, the company continued to sustain its performance, with emphasis on profitability and value creation for shareholders as profit before tax grew from N249.3 million in 2014 to N565.2 million in 2015, representing a 126.7 per cent increase.

    He said the company earmarked N217.37 million as dividends for the 2015 business year in demonstration of the confidence it has in the future sustainability and to reward shareholders for their investments.

    He assured shareholders that their request for bonus shares would be considered at the appropriate time while the company would more of its products as part of the new measures to improve community social relations (CSR).

    In his remarks, managing director, Berger Paints Nigeria Plc, Mr Peter Folikwe, said that one of the strategic plans to boost earnings was to reduce cost through operational efficiency.

    He added that consumer education would be accorded high priority to strengthen the relationship between the company and its customers.

  • UACN drives growth with internal funding

    UACN drives growth with internal funding

    After many failed attempts to raise new equity funds from existing and new investors, the board of UAC of Nigeria (UACN) Plc has suspended new equity issues and opted to finance ongoing restructuring and investments within the group with internally generated funds.

    At the annual general meeting of the company yesterday at Golden Tulip Festac, Lagos, chairman, UAC of Nigeria (UACN) Plc, Mr. Dan Agbor, said the group decided on internal funding after attempts to raise new equity funds from strategic investors and existing shareholders were frustrated by the slowdown at the Nigerian capital market.

    He said the group had sequel to approval by the shareholders at the annual general meeting in September 2015 made efforts to raise new equity funds, especially with a view to attracting a strategic investor or investors and obtain equity control that would be used to drive growth in certain subsidiaries.

    “Following your approval of a one for 12 rights issue of 160.07 million ordinary shares, your board and management made all necessary arrangements to launch the issue. Unfortunately, the weak performance of the Nigerian capital market has made it impossible to raise the requested capital on optimal terms and at the end of March 2016, a decision was taken by the board to discontinue the rights issue. Your board and management will now undertake the needed investment and financial restructuring of those subsidiaries using internally generated funds,” Agbor said.

    He added that the group decided to retain the larger part of its net earnings in 2015 to ensure that it remains in a position to participate in new equity issues that might be launched by its subsidiaries.

    According to him, the board had recommended total dividend of N1.92 billion for the 2015 business year while being mindful of the need to conserve funds so that the group can participate in the rights issues to be undertaken by three of its subsidiaries, including UACN Property Development Company Plc, Livestock Feeds Plc and Portland Paints & Products Nigeria Plc.

    Key extracts of the audited report and accounts of UACN for the year ended December 31, 2015 showed that group turnover dropped by 14.6 per cent from N85.6 billion in 2014 to N73.1 billion in 2015. Group profit after tax dropped by 52.6 per cent from N10.9 billion in 2014 to N5.2 billion in 2015.

  • Profit-taking pushes equities to marginal decline

    Nigerian equities opened this week with a tinge of bearishness as investors sought to take profit on recent price appreciation. Increased sale orders turned the overall market situation into a buyer’s market, closing most transactions on discount.

    Aggregate market value of all quoted equities on the Nigerian Stock Exchange (NSE) dropped marginally by N12 billion from its opening value of N9.491 trillion to close at N9.479 trillion. The All Share Index (ASI) also slipped from 27,634.42 points to close at 27,598.54 points, representing a marginal decline of 0.13 per cent.

    With this, the average year-to-date return now stands at -3.64 points. There were 24 losers against 16 gainers yesterday as turnover slowed down below average. Total Nigeria recorded the highest loss of N7.45 to close at N162.55. Guinness Nigeria dropped by N2.95 to close at N99.05. Julius Berger Nigeria declined by 90 kobo to close at N42.10. Stanbic IBTC Holdings dropped by 78 kobo to close at N14.97. Flour Mills of Nigeria lost 70 kobo to close at N21.30 while Guaranty Trust Bank droped by 40 kobo to close at N18.80 per share.

    Turnover also dropped below average with the exchange of 142.33 million shares valued at N1.43 billion in 3,695 deals. Low-priced banking stocks dominated the top activities chart. The three most active stocks were: Diamond Bank, with 14.98 million shares; FCMB Group, 14.80 million shares and Access Bank, with 14.01 million shares.

    Analysts agreed that the negative market situation was driven mainly by profit-taking transactions. FSDH Securities stated that “profit takers dominated the first trading day of the week”.

    “Today’s negative performance was broadly driven by profit taking as expectations of the Apex Bank’s announcement on a flexible exchange rate policy stifles momentum. We expect the market to continue southwards tomorrow,” Afrinvest Securities, a Lagos-based dealer on the NSE, stated in post-trading review.

    Meanwhile, Dangote Cement and CAP led the contrarian stocks with a gain of N1.50 each to close at N171 and N38 respectively. Union Dicon Salt followed with a gain of N1.27 to close at N13.70. Ashaka Cement rose by N1 to close at N21.03 while International Breweries added 40 kobo to close at N20 per share.

  • SEC probes stockbroking firm over shares fraud

    SEC probes stockbroking firm over shares fraud

    Securities and Exchange Commission (SEC) has launched investigation into alleged multi-million Naira shares fraud involving a stockbroking firm, WT Securities Limited, in another high-profile case after the apex capital market regulator indicted and banned two BGL companies from the capital market.

    In a preliminary indictment charge, SEC, at the weekend, alleged that its preliminary investigation indicated that WT Securities Limited engaged in fraudulent sale and mismanagement of clients’ shares, valued at about N254 million.

    According to the apex capital market regulator, WT Securities Limited was alleged to have mismanaged the investment portfolio of Chief Opral Mason Benson valued at N185.20 million and also sold 500,000 shares of Nigerian Breweries belonging to one Ngozi Oyekwere Nwachuku without the authorisation of the client. The Nigerian Breweries’ shares are currently valued at about N68.5 million.

    “A preliminary investigation carried out by the Commission revealed that WT Securities Ltd sold the complainants shares without authority and management of the Commission has directed that the firm, its directors and sponsored individuals be invited to a meeting to explain their roles in the transaction,” SEC stated in the preliminary indictment charge.

    With the preliminary indictment, the directors and officials of WT Securities Ltd are expected to appear before the internal disciplinary panel of the apex capital market regulator tomorrow to “show cause why they should not be sanctioned for violating the provisions of Rules 43 and 182A (1), (3) and (5) of the SEC Rules and Regulations”.

    SEC, two weeks ago, withdrew and cancelled the registration of BGL Securities Limited and BGL Asset Management Limited after the Administrative Proceedings Committee (APC) found the firms and their operators guilty in a N2.2 billion asset management case.

    The APC, the adjudicatory arm of SEC, also banned key executives and management staff of BGL from the capital market for various numbers of years. However, BGL could appeal the decisions to the Investment and Securities Tribunal (IST).

    The APC found the two firms and their executives guilty of failure to honour N2.2 billion investment agreements in breach of extant capital market rules. The group managing director of BGL Group, Mr. Albert Okumagba and his deputy Mr. Chibundu Edozie were fined N100, 000 each and were banned for 20 years.

    The APC stated that the firms and their executives “engaged in acts capable of adversely affecting the investing public’s image of, and confidence in the capital market”.

    Besides, the indictment also referred the firms and the officials to the law enforcement agencies noting that “pursuant to Section 304 of the Investments and Securities Act 2007 all information on possible criminality in this matter be and is hereby referred to the appropriate law enforcement agencies and the Enforcement Department of the Commission shall follow up and ensure that the matter is brought to a logical conclusion”.

    Besides the cancellation of their registrations, BGL Securities was slammed with total fine of N22 million while BGL Asset Management was slammed with N5 million. Also, Mr. Peter Adebola was banned for five years, Joseph Ashley-Osuzoka was banned for four years with a fine of N100,000, Victor Obire was banned for three years with a fine of N100,000; Joshua Sesan Adetiloye was banned for one year; Nkechi Azubuike, Adekule Alli, Mohan Lalchandani, Anthony Nwozor and Oluwo Oluwale were all banned for one year and fined N100,000 each while Ande Ewubare, Victor Inyang, Hilary Eludu, Ehime Alofoje and Ofem Mbui Omni were slammed with two-year ban with a fine of N100,000 each.

  • Accenture charts new path for banks in multi-channel digital age

    Accenture charts new path for banks in multi-channel digital age

    Nigerian banks need to undertake a revision of their business model in order to align their operations with their core business ideas in a sustainable way that delivers competitive returns to stakeholders even as changes in technologies and customer behaviours redefine operating milieu.

    Accenture Nigeria, in a newly defined paradigm for banking in its recent publication ‘Banking 2016 – Next Generation Banking’, notes that each bank must have a clearly articulated business model in the light of its history, market, positioning and aspirations among others, which would be the foundation for winning the battle for the customer and growth in an increasingly competitive industry with the commoditization of transaction fulfilment and service delivery.

    According to the report, while some banks may fix the situation and excel by simply improving on the basics including “smart sizing” their distribution networks, others need new business and operating models to compete and grow going forward.

    As most banks struggle with a daunting array of market, regulatory, customer, cost and operational challenges, Accenture Nigeria outlined three critical battles that must be won by the banks in order to excel.

    Speaking on the need for paradigm shift in banking sector, managing director, financial services, Accenture Nigeria, Mrs. Toluleke Adenmosun, said the critical issues were the struggle for customer trust and engagement; protecting payment business and revenues from progressive disintermediation by new non-bank players, distinctive and differentiated offerings to avoid commoditization of products and services.

    She explained that the initial typical multi-channel approach leverages six core channels, which include online and internet, telephony, branch, mobile, ATM, POS channels but nonetheless investments in emerging channels, are failing to deliver fully on the promise of adoption by customers.

    Adenmosun cited a recent article posted by the Central Bank of Nigeria (CBN) which indicates that bank branches remain the predominant channel for bank customers, as other aforementioned channels are nearly ineffective or failing in different ways.

    She explained that an average bank customer would prefer going to his branch to make withdrawals or deposits when there are other channels like the ATM and mobile channels, or rather make payments with cash on daily basis when there are POS terminals and on-line and internet channels available.

    She noted that some bank customers would go all the way to the banks to make complaints or enquiries when there is telephony and contact centre.

    “Clearly, branches remain relevant and are important assets to banks, but branches carry higher running costs than emerging channels.  On average, branches comprise 50  to 60 per cent of the bank’s operating costs and in most banks around 30 per cent of branches destroy value generated by the rest of the network,” Adenmosun said.

    She outlined that Accenture has postulated three business models that banks should consider when defining their own model.

    The first model is the one that builds on enhanced multichannel experiences to engage customers and meet their financial needs efficiently which simply means taking customer interaction beyond the basic cash in and cash out transactions to deliver a distinctive value proposition. In other words, “My bank knows and understands me and effectively engages with me about my real financial needs”, that is, strategic application of analytics is at the core of the “Intelligent Multichannel” Bank Model.

    Another model is one which leverages social media interactions to increase customer intimacy. This means being present, connecting and engaging with customers where they spend their time such as on social media, based on personal interests and by leveraging influencers. In other words, the concept is that of “My bank engages with me where I spend time” as a “Socially Engaging Bank”.

    The last model places the bank as trust center with an extended proposition of financial and non-financial services. In other words, the concept is built around “My bank gives answers to my needs, providing easy access” leveraging in particular the power of mobile technology to be the “Financial and Non-Financial Digital Ecosystem Bank”

    Adenmosun said the implementation of the new business models can accelerate revenue growth while reducing cost to serve adding that bank governance and operating models must evolve; giving proper weight to customer experience and metrics in the key areas of reputation, brand perception, commercial performance, sales performance and the capabilities required to support them.

  • Resort Savings eyes growth with Abuja land deals

    Resort Savings & Loans Plc, a mortgage bank quoted on the Nigerian Stock Exchange (NSE), plans to further leverage its turnover with ongoing sale of properties in the Federal Capital Territory (FCT), Abuja.

    Head, business development, Resort Savings & Loans Plc, Bisi Bello, said the mortgage bank has begun the marketing and sale of undeveloped plots of land at different locations in Abuja. The land  located at Kuje, Kurudu-1 and Kurudu Hilltop belongs to Mahfas Investment Limited.

    She said the mortgage bank will market the land as well as allow instalmental payment upon the down payment of 30 per cent by prospective buyers.

    “All that is required from the prospective buyers is to open account with Resort Savings and make available the 30 per cent down payment while the balance could be spread over a reasonable period,” Bello said.

    She urged all prospective home owners to open account with the mortgage bank as well ensure the deposit of the 30 per cent initial payment to be part of the beneficiaries of the plots.

  • FBN Merchant Bank aims high as profit hits N3.85b

    FBN Merchant Bank aims high as profit hits N3.85b

    FBN Merchant Bank Limited, the merchant banking subsidiary of FBN Holdings Plc, has assured that it would consolidate and sustain impressive performance in the years ahead as the wholesale banker doubled pre-tax profit to N3.85 billion in 2015.

    At the first annual general meeting of the company in Lagos, directors of the merchant bank said it has been positioned to improve on its performance and make better returns to shareholders. Audited report and accounts of the FBN Merchant Bank for the year ended December 31, 2015 showed that pre-tax profit rose by 113.1 per cent from N1.81 billion to N3.85 billion in 2015.

    FBN Merchant Bank, formerly known as Kakawa Discount House Limited, started operations in November 2015 following Central Bank of Nigeria (CBN)’s approval of its merchant banking licence and completion of operational prerequisites.

    Managing director, FBN Merchant Bank Limited, Mr. Kayode Akinkugbe, assured the shareholders that the merchant bank is appropriately positioned to ensure commendable dividends in the current financial year.

    He said the wholesale bank will remain committed to building its franchise as the leading merchant bank in Africa by creating opportunities for its clients.

    “This will be the first full year of operation and we are excited to launch the merchant bank on the strong platform of the FBN Holdings Group. We are confident that the management team, with the support of the board, will be able to face the challenges of 2016 and we will work tirelessly to make the belief placed in us deserved,” Akinkugbe said.

    He said the merchant bank intends to approach the market with necessary prudence and hunger, being very mindful of all the risks involved, with the aim to improve the quality of its income and increase its balance sheet while ensuring that it has better results this year.

    In his address, chairman, FBN Merchant Bank, Mallam Bello Maccido noted that the immediate past year was a challenging period for the Nigerian economy due to the election year and the transitional period for the company.

    According to him, while the volatility experienced in 2014 continued into year 2015 and led to spikes in rates and general uncertainty in the market, the purposeful leadership of the FBN Merchant Bank took advantage of the volatilities and rode the economic headwinds profitably within the financial year thereby returning commendable returns to shareholders.

    Group managing director, FBN Holdings Plc, Mr. UK Eke expressed confidence in the merchant bank, noting that it has all the necessary advantages to continue to grow.

    According to him, with the strength of the FBN Holdings Group, more than adequate capitalisation of the merchant bank at over 25 per cent capital adequacy ratio which signifies capacity to prudently sweat the balance sheet, a strong visionary board, and a highly professional and experienced management team, FBN Merchant Bank has been primed to soon dominate the wholesale banking subsector.

  • Union Bank assures of improved returns in 2016

    Union Bank assures of improved returns in 2016

    The board and management of Union Bank of Nigeria (UBN) Plc have assured shareholders of the bank that recent and ongoing strategic initiatives would lead to improved returns in the current business year.

    At the annual general meeting yesterday in Lagos, directors of the bank variously assured shareholders that the bank would optimise its new business model and continue to ensure effective cost management in its operations in order to increase shareholders’ value in 2016.

    Chief executive officer, Union Bank of Nigeria (UBN) Plc, Mr. Emeka Emuwa said the bank would focus on growing its deposit base, transactional income and client base, managing its liquidity and effectively utilising its capital while reducing operational costs with a view to delivering better results in the years ahead.

    He added that the bank would focus on trade and retail businesses, growing its public sector business in light of the opportunities created by the government as well as drive more value chain synergies across its businesses in Nigeria and United Kingdom.

    In his address, chairman, Union Bank of Nigeria (UBN) Plc, Mr. Cyril Odu, assured shareholders that the board and management of the bank are committed to delivering consistent growth in earnings to ensure that the bank can resume paying dividends to shareholders in the near future.

    He pointed out that the improving quality of the bank’s earnings underscored the success of its transformation programme.

    Reviewing the bank’s 2015 performance, Odu noted that gross earnings for the bank increased by eight per cent from N109.8 billion in 2014 to N118.4 billion in 2015, including N3.6 billion one-off gain on disposal of subsidiaries as the bank continued the implementation of its divestment programme in line with the Central Bank of Nigeria (CBN) regulation.

    He added that profit before tax grew from N14.4 billion in 2014 to N14.6 billion in 2015 while operating expenses reduced by two per cent from N57.2 billion to N56 billion in 2015.

    He pointed out that the double-digit increase in customers’ deposits  by 12 per cent to N569.1 billion in 2015 as against N507.4 billion in 2014 reflects increased customer confidence in the bank while the bank also showed more support for its customers with 15 per cent increase in loans and advances to N349 billion in 2015.

    Meanwhile, shareholders, who spoke at the meeting, praised the bank but called on the directors to hasten the return to dividend payment. Union Bank’s last dividend payment was in 2008.