The Nation Newspaper

Category: Equities

  • UBA calls for better funding of retailers

    Banks need to adopt more collaborative financing mechanisms to enable retailers develop their capacities, expand operations and adopt innovative practice production standards to reduce operating cost and optimize value.

    Group managing director, United Bank for Africa (UBA) Plc, Mr. Phillips Oduoza, who spoke at the 2014 retail leaders’ conference in Lagos, advocated for innovative partnerships among retail financial service providers will increase focus on the funding of retail-based infrastructure development and product distribution projects.

    According to him, in an environment of collaborative partnerships, banks will partner retailers in promoting the acceptance and mobility of innovative payment platforms. Cheaper mobile-based point-of-sales will replace the expensive terminals currently in use, and mobile-to-mobile funds transfer will be added to the bouquet of payment platforms.

    “UBA recognizes the growth potential of the Nigerian economy and the retail sector in particular, so we have and will continue to intensify our support for the sector through provision of innovative payment, cash management solutions and appropriate funding options along the entire value chain,” Oduoza said.

    He noted that the banking sector is collaborating with the Central Bank of Nigeria (CBN) to deploy an industry-wide biometric system which will significantly improve consumers’ access to both secured and unsecured financing, thereby increasing the retail market potential.

    Oduoza, who was represented by the bank’s director of consumer banking, Mr. Ilesanmi Owoeye, listed several factors driving the growth of Nigeria’s retail industry.

    According to him, the growth factors for the retail sector include the ongoing reforms in key sectors of the Nigerian economy aimed at bridging infrastructural gap, reducing unemployment levels, improving literacy level and improving access to funding by SMEs, which will significantly impact the level of disposable income and effective demand in the near future, affording the sector unprecedented growth opportunity.

    He also identified increasing technology penetration in Nigeria as another factor driving the growth of the retail sector as this is giving retailers access to valuable market information about purchasing trends as well as segment preferences, making it increasingly easy to adapt sales and marketing approaches and improve consumer experiences. Another factor is the increasing penetration of the informal sector by retailers.

    “Without doubt, the continuous rise in mobile technology will be pivotal to the next stage of the retail market development, fuelling its integration with the global retail trade economy and significantly increasing its ease of doing business. This prospect is already becoming evident in the rising trend of online retailers are increasingly gaining traction and matching the emerging sophistication of Nigerian consumers’ changing demand and payment patterns.” Oduoza said.

  • Mobil Oil optimistic on future returns

    Mobil Oil optimistic on future returns

     

    Chairman and managing director, Mobil Oil Nigeria Plc, Mr. Adetunji Oyebanji, gave this assurance yesterday at the annual general meeting of the company in Lagos.

    According to him, while the business environment in the downstream sector will remain challenging, the company would continue to focus on growing sales of non-regulated products and its property business to complement the regulated product segment.

    He outlined that the company is currently constructing a new gasoline tank which will increase storage capacity and provide greater flexibility for its operations.

    “Additional investments are planned to upgrade our loading rack and tank farm for improved operating safety and efficiency. The retail chain has also benefited from selective investments consistent with the returns earned on regulated products. These investments will help MON to remain competitive in the market place,” Oyebanji said.

    He added that the company would continue to add capacity in the lube oil blending plant by building additional storage tanks for bulk activities noting that it has already started automation and upgrade of a filling line.

    He said the company’s property business is becoming stronger and has the potential to add substantial income to the company in the period ahead.

    According to him, the first phase of the Mobil House capacity enhancement project has been completed while it has also made significant progress in the Mobil Court refurbishment, which is expected to be completed this year.

    Oyebanji said the 20 per cent increase in dividend for the 2013 business year from N5 to N6 demonstrated the company’s commitment to shareholders’ interest.

    He however called on the government to review the fixed margins on regulated products to allow the downstream petroleum marketers to have a fair return on their investments.

    He noted that the regulated margins on gasoline sales are barely sufficient to cover operating costs while delays in reimbursing subsidies on fuel imports continue to be a concern.

    Audited report and accounts of the company for the year ended December 31, 2013 showed that turnover dropped by three per cent from N80.8 billion in 2012 to N78.74 billion in 2013. Profit before tax rose by 26 per cent from N4.08 billion to N5.12 billion. Profit after tax also rose by 21 per cent from N2.88 billion to N3.48 billion. Earnings per share stood at N9.65 in 2013, 13 per cent above N8.56 in 2012. Total assets rose by 21 per cent from N33.56 billion to N40.73 billion.

  • Shareholders approve N3b new equity issue for May & Baker

    Shareholders approve N3b new equity issue for May & Baker

    Shareholders of May & Baker Nigeria Plc have authorised the directors of the healthcare company to raise up to N3 billion in new equity fund with a view to reducing dependence on loans and strengthen the company’s balance sheet.

    At the annual general meeting in Lagos, shareholders unanimously authorise the board of directors “to raise additional equity capital of an amount up to N3 billion or any fraction thereof either locally and or internationally through any or a combination” of rights issue, private placement and public offer.

    The meeting also empowered the directors to decide on absorption of excess monies from the new capital issue.

    The resolution highlighted that the new capital issue would be for the “purposes of enhancing the company’s working capital and financing the development of the company’s businesses”.

    To create headroom for the new capital issue, shareholders also increased the authorised share capital of the company from N1 billion, consisting of 2.0 billion ordinary shares of 50 kobo each, to N1.90 billion, consisting of 3.8 billion ordinary shares of 50 kobo each, by creating additional 1.80 billion ordinary shares of 50 kobo each. May & Baker currently has 980 million issued shares outstanding on the Nigerian Stock Exchange (NSE).

    There are indications that the company may opt for rights issue, giving assurances from shareholders that they will support the recapitalisation exercise. The company is also favourably disposed to new major investor with technical experience and know-how to optimize its potential.

    In his address to shareholders, chairman, May & Baker Nigeria Plc, Lt. Gen. Theophilus Danjuma (rtd), said the recapitalisation is an important measure to reduce the company’s current high debt-to-equity ratio and the resultant high financing costs.

    According to him, it is imperative that shareholders inject more equity to the company to make it stronger and put it in better position to face the challenges in the industry.

    He outlined that the management of the company has been implementing measures to improve the performance of the company and deliver returns to shareholders.

    “These measures include strategies to sustain revenue growth through more aggressive marketing and product development initiatives, better management of working capital and aggressive reduction in overhead costs,” Danjuma said.

    He noted that the consolidation of all pharmaceutical manufacturing operations of the company at its PharmaCentre in Ota would help to improve operational efficiency and capacity utilisation while curtailing excess overhead costs.

    Responding to shareholders’ questions and remarks, managing director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor, said the company’s fundamentals have shown appreciable improvements as reflected by rising sales and improving cash flow.

    He assured that the company has a bright future as it has been able to build strong institutions and brands that will ensure sustainable growth irrespective of changes in management and operating environment.

    According to him, with the expected certification of the company’s products and processes by the World Health Organization (WHO), the company is set to become the first in Nigeria to be certified by the global health organisation, with immense potential for greater global opportunities and increased earnings.

    He added that the WHO certification would highlight the leading position of May & Baker in the healthcare industry and provide opportunities to grow returns to shareholders.

     

  • Dangote Sugar pays N7.2b dividends to shareholders

    Dangote Sugar pays N7.2b dividends to shareholders

    Shareholders of Dangote Sugar Refinery (DSR) Plc at the weekend unanimously approved the distribution of N7.2 billion as cash dividends for the 2013 business year amidst commendations for the board and management of the sugar company.

    At the annual general meeting in Lagos, shareholders commended the performance of the company in 2013. The gross dividend translates into a dividend per share of 60 kobo.

    Chairman, Ibadan Zone Shareholders Association (IBZA), Chief Sola Abodunrin, said the performance of the company was commendable noting the improvements in sales and profit.

    Coordinator, Pragmatic Shareholders Association of Nigeria, Mrs Bisi Bakare, said the board of Dangote Sugar has shown commitment to shareholders’ interest with consistent dividend payment.

    The shareholders applauded various strategies put in place by the board and management that made the company to overcome the challenging operating environment and deliver improved bottom-line.

    Chairman, Dangote Sugar Refinery (DSR) Plc, Aliko Dangote, said the company’s 10-year growth plan would deliver better returns to shareholders and consolidate its position as the largest sugar company in West Africa.

    According to him, pursuant to the introduction of the federal Government’s National Sugar Master Plan in Nigeria, DSR has begun it own development plan which would lead to phenomenal growth in its capacity over the next five to 10 years.

    “This plan is targeted at the production by your company of 1.5 million to 2.0 million tonnes of sugar per annum from locally-grown sugar cane within the next five to 10 years. This will further consolidate our position as the largest sugar producer in West African region,” Dangote said.

    H e noted that the company has taken great care in the preparation of this sugar development plan with the operations being structures to include an increased focused on the company’s backward integration project.

    He said the company has a robust growth agenda driven by the backward integration development plans.

    “As we commence this journey our priority remains to consolidate our clear leadership of the sugar industry in Nigeria. We will work to ensure ongoing operational efficiency to drive continued growth across our markets,” Dangote said.

    Group managing director, Dangote Sugar Refinery (DSR) Plc, Mr. Graham Clark said the sustainability model of the company is targeted at empowering local communities and will be implemented across all project sites, starting with Savannah Sugar Company Limited.

    “Our targets are clear and a robust framework supported by key performance deliverables will enable us to deliver the expected results in the next five to 10 years with enhanced benefits to all our stakeholders,” Clark said.

    He outlined that the company has restructured its sugar operations with greater focus on backward integration project with the targeted selection and acquisition of some 200,000 hectares of land across various states in Nigeria for the development of sugar cane plantations and construction of modern sugar processing factories has begun.

    Audited report and accounts of the company for the year ended December 31, 2013 showed that turnover rose to N102.467 billion in 2013 as against N106.868 billion in 2012. However, profit before tax rose from N16.331 billion in 2012 to N20.099 billion in 2013. Profit after tax grew from N10.796 billion to N13.537 billion.

     

  • CSCS grows profit by 56% to N4.8b

    CSCS grows profit by 56% to N4.8b

    Central Securities Clearing System (CSCS) Plc grew its profit by 56 per cent as turnover rose by 34 per cent.

    Audited report and accounts of CSCS for the year ended December 31, 2013 showed that profit before tax rose from N3.09 billion in 2012 to N4.82 billion in 2013. Total turnover grew by 34 per cent from N5.17 billion in 2012 to N6.89 billion in 2013. The company paid a dividend of 22 kobo per share.

    Managing director, Central Securities Clearing System (CSCS) Plc , Mallam Kyari Bukar, said the company achieved good financial results in 2013.

    “Our operating income for the year stood at N6.9 billion, that is a 34 per cent increase from the previous year’s operating income of N5.2 billion. Profit before tax for the year under review was N4.82 billion as against N3.09 billion from the previous year,” Bukar said.

    According to him, total revenue grew by 34 per cent during the year while operating expenditure decreased slightly by one per cent due to efficient cost management approach adopted by the company.

    He noted that the company’s 2013 financial statements was prepared in line with International Financial Reporting Standards (IFRS) as prescribed by the Financial Reporting Council of Nigeria (FRCN) and the Securities & Exchange Commission (SEC), having first adopted the IFRS in 2012.

    CSCS, the clearing, settlement and depository company for the Nigerian stock market, recently listed its shares on the NASD Plc, providing investors with opportunity to trade on their shares.

    NASD Plc is a registered over-the-counter (OTC) trading platform for unquoted securities including equities and bonds.

    CSCS, a subsidiary of the Nigerian Stock Exchange (NSE), listed a total of 5.0 billion ordinary shares of N1 each under the financial industry sector.  CSCS is the 16th securities and eighth financial industry security to be admitted to trade on the NASD.

    With the listing of CSCS on the market, operators and investors can expect to see better price discovery and more transparency around transactions.  It also makes the security more acceptable to portfolio investors who before now only had an informal reference price.

     

     

  • ‘Caverton is testimonial to indigenous capacity’

    ‘Caverton is testimonial to indigenous capacity’

    The listing of Caverton Offshore Support Group Plc on the Nigerian Stock Exchange on May 20 is a proof that participation by the nation’s indigenous businesses in the oil and gas sector can be boosted through deliberate government policy interventions. From its simple beginnings, the company has weathered the storms, both metaphorically anad physically, to take the centre stage of the poster child for the local content policy of the Federal Government.

    Caverton was listed on the NSE by way of introduction. The company introduced seven per cent of its issued share capital in addition to the 13 per cent of its shares previously sold by private placement in order to meet the required 20 per cent minimum float for publicly listed companies.

    For the promoters of the company, this is a significant milestone, being the first indigenous oil and gas services company to list on the exchange. “We are proud of our achievements thus far and are humbled to be a reference point in such a tasking sector,’’ chairman Aderemi Makanjuola, said in an interview.

    The humble beginnings of this group make the event much significant. For a long time, Nigeria’s oil and gas sector, including the support services, has been dominated by foreign firms, quite understandably. First, it is the foreign companies that possessed both the manpower and the financial muscle to enable them operate in a sector that is technology-driven, and by implication, demands a lot of financial capability on the part of operators.

    The growth of this company to this point of getting listed on the stock exchange demonstrates clearly that the direction that an economy goes is determined by the policies of the government. Without appropriate policies, entrepreneurs and their organisations end up merely groping in the dark.

    While the entrepreneurial spirit of the promoters gave birth to the group, government’s actions through the cabotage and local content laws have undoubtedly provided the fertile ground the company needed to blossom. Caverton Marine Limited and Caverton Helicopters were operating for 11 and six years respectively before the passing of the local content bill. They have demonstrated their ability to compete with local and international peers throughout their evolution.

     

  • Skye Bank raises $150m new capital

    Skye Bank raises $150m new capital

    Skye Bank Plc has raised a total of $150 million tier 11 capital as part of the measures to beef up its equity and working capital.

    Group managing director, Skye Bank Plc, Mr. Timothy Oguntayo, disclosed this yesterday in Lagos at the bank’s pre-annual general meeting media briefing.

    According to him, the capital raising exercise was in tandem with the approval the shareholders of the bank gave to the board at the last annual general meeting.

    He noted that the new capital would strengthen the bank as a solid institution pointing out that the bank would use its enhanced strength to further intervene in funding critical sectors of the economy to bring about national development.

    According to him, the bank has been one of the leading financiers in key sectors of the economy including oil and gas industry, real estate development, agriculture and education among others.

    He said the bank would over the next three years focus on enhancing its commercial and retail banking business to complement its hugely successful corporate banking franchise.

    According to him, the bank has designed new retail banking strategies that would aid the mobilization of cheap deposit, increase lending to individuals and small and medium businesses and generally bridge the financial gap in the society.

    Oguntayo put the bank’s total funding of agriculture at over N15 billion traversing cocoa processing, animal production, among others.

    He however called for the revamping of the Nigeria Agricultural Insurance Corporation to be able to guarantee agric loans in a manner that will encourage banks to fund the sector more.

    Skye Bank Plc grew net profit by about 27 per cent to N16 billion in 2013 as the bank optimized constrained top-line deliver better returns to shareholders.

    Key extracts of the audited report and accounts of the bank for the year ended December 31, 2013 showed that net profit rose from N12.64 billion in 2012 to N16.02 billion in 2013.

    The board of directors of the bank has recommended distribution of N3.97 billion to shareholders, representing a dividend per share of 30 kobo. Earnings per share had risen to N1.21 in 2013 as against N1.01 in 2012.

    The report showed a profit before tax of N17.136 billion in 2013, a modest increase on N16.510 billion recorded in 2012. Other highlights of the result include growth in total assets from N1.073 trillion to N1.116 trillion, while deposit liabilities also increased from N966 billion to N996 billion. Gross earnings stood at N127.3billion in 2013 compared with N127.73 billion in 2012.

    The bank’s total equity grew during the review period from 106.8 billion in 2012 to N120 billion in 2013, indicating the bank’s financial stability. Loans and receivables also rose to N549.8 billion from N540.3 billion. As a measure of its growing good loan portfolio, the bank’s net interest income shot up to N61.69 billion from N44.5 billion in 2012, an increase of 38 per cent.

  • NSE expels stockbroker over fraud

    NSE expels stockbroker over fraud

    The Nigerian Stock Exchange (NSE) has revoked the authorized dealership licence of one of its dealing members-Mr Kayode Awotile, with a warning to all market operators not to engage in any dealings with him.

    In a statement signed by head, broker dealer regulation, Nigerian Stock Exchange (NSE), Olufemi Shobanjo, the NSE said the decision to expel Awotile was taken at the meeting of the Disciplinary Committee of the National Council of the Exchange.

    According to the statement, the meeting decided that that “the registration of Mr. Kayode Awotile, the former Managing Director of Lakesworth Investment & Securities Limited, as an Authorised Clerk be and is hereby revoked pursuant to Rules 45 and 167 of the Rules and Regulations Governing Dealing Members (‘the Rules”) for contravention of the Rules in relation to the unauthorised transfers, sales of shares and failure to carry out the directives of the Committee”.

    The Exchange has been implementing key measures to protect market integrity and ensure fair and open marketplace.

    Speaking at the induction of new dealing members recently, chief executive officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema said being a broker is a call to stand tall in integrity, to be impeccable in character, to be professional in service and to be high in ethics and standards.

    He noted that the NSE has continued to evolve to achieve the highest level of competitiveness by operating fair, orderly and transparent markets that bring together the best of African enterprises, as well as local and global investor communities.

    “It should be noted that we are maintaining and will continue to maintain zero tolerance to sharp practices and deploying requisite technology and expertise to curb and arrest any form of manipulation from all quarters. For all recently qualified stockbrokers, it goes without saying that the investing community will know and judge the Nigerian Capital Market through your example in character and service; the manner in which you engage, interface and service your clients will go a long way in shaping the perception of our market,” Onyema said.

     

  • FBN Holdings launches short-term growth plan

    FBN Holdings launches short-term growth plan

    FBN Holdings Plc has launched a new short-term strategic growth plan that will enhance the leadership position of the holding company and ensure better returns to shareholders over the next few years.

    Group chairman, FBN Holdings Plc, Dr. Oba Otudeko, who spoke at the annual general meeting of the company in Lagos yesterday, said the new strategic plan covers between 2014 and 2016 and would build on the successes of the previous plan that covered 2011 to 2013.

    According to him, the high-level aspirations and specific actions in the short-term growth plan will be building blocks that will not only sustain the company’s momentum but raise its leadership position in the evolving market place.

    He said the company has made significant progress integrating its business planning process and harmonising its investment decisions in a way that allowed the entire group to take full advantage of opportunities in non-banking spaces.

    “As we continue to diversify our profit base through this process, we will remain focused on containing costs and ramping up operational efficiency through targeted centralisation of all functions that lend themselves group-wide,” Otudeko said.

    He said the experience of the company with the holding company structure has helped to hone its business focus, deepen centralisation and skill sets across the group and increase prospects of profitability.

    In a review of the outlook of the company, chief executive officer, FBN Holdings, Mallam Bello Maccido, said the outlooks for each of the group’s businesses remained positive with increased contributions from the businesses expected to cumulate into better returns for the group.

    He said the group has increased investments across its business lines with a view to strengthening its leadership positions pointing out that the recent acquisitions of ICB banks across four West African countries, the acquisition of Oasis Insurance and ongoing efforts to strengthen the investment banking and asset management business through the acquisition of a merchant banking licence would help to enhance benefits to all stakeholders, especially the shareholders.

    “As we steadily progress in our journey under the holding company arrangement, we expect to drive growth in each of our business lines, in a way that will enhance the aggregate performance of the group. This will be complemented by reinforcing the pre-eminence of our commercial banking franchise, while driving the level of contribution from each of the non-banking subsidiaries,” Maccido said.

    Shareholders at the meeting commended the company while applauding gross dividend of N36 billion declared for the 2013 business year. The dividend breakdown indicates that shareholders would receive a dividend of N1.10 on every share.

    The audited report and accounts of FBN Holdings for the year ended December 31, 2013 showed that gross earnings rose from N370.2 billion in 2012 to N395.9 billion in 2013, the highest in the banking industry. Net interest income improved slightly from N226.6 billion to N230.1 billion while non-interest income dipped from N73.9 billion to N67 billion. Operating income stood at N296.1 billion in 2013 as against N301.1 billion in 2012. While the group moderated its operating expenses from N193.5 billion to N185 billion, profit before tax dropped marginally by 2.8 per cent from N93.9 billion to N91.3 billion. Profit after tax followed the trend at N70.6 billion in 2013 as against N76.8 billion in 2012.

  • CBN harps on ethics as FMDQ licenses dealing members

    CBN harps on ethics as FMDQ licenses dealing members

    The Central Bank of Nigeria has underlined the importance of effective rules and regulations and self censorship in creating and sustaining the integrity of the over-the-counter securities market.

    At the presentation of licences to the first batch of dealing members of the FMDQ OTC Plc, Director, banking supervision, Central Bank of Nigeria (CBN), Mrs. Tokunbo Martins, said FMDQ and its dealing members must abide by the principle of good corporate governance and observe extant laws and regulations to justify their role as a self-regulatory organisation (SRO).

    According to her, it is only by acting in good faith, devoid of conflict of interest at all times and introducing best business practices among its members that FMDQ OTC can achieve its goal of strengthening the financial system.

    She noted that financial markets play a critical role in the accumulation of capital and the production of goods and services adding that FMDQ is at a vantage position to help Nigeria achieve a world-class financial system.

    “In my view, the emergence of FMDQ will greatly enhance the liquidity, transparency and safety of transactions in the inter-bank market for fund intermediation,  foreign exchange dealings, repurchase transaction and government securities,” Martins said.

    She called on FMDQ OTC to, among other things, put measures in place to ensure that it achieves its objectives as a SRO.

    According to her, FMDQ must put in place an arbitration mechanism for the resolution of disputes between members and other stakeholders just as it must put in place a system for proceeding against members committing breach of the governing norms or articles including provisions for suspension or expulsion.

    In his remarks, chairman, FMDQ OTC, Mr. Aigboje Aig-Imoukhuede, who presented licences to 26 dealing members at the event, said it provided an interactive forum for the formal activation of the capital market presence of FMDQ dealing members.

    He stressed that the regulation of the OTC market was important, considering previous experience.

    According to him, financial markets which are more wholesale in nature have fallen under the provenance of over-the-counter markets which have until recent times been highly unregulated and decentralized.

    He noted that the financial crisis of 2007-2008 has however led to greater interest in regulating OTC markets, especially the derivative products.

    “The importance of regulation in this market cannot be over-emphasised as FMDQ is a market for all the stakeholders of the OTC market. This ceremony is a demonstration of the importance the OTC market attaches to regulation,” Aig-Imoukhuede said.

    The dealing members that received licences included Access Bank, Associated Discount House, Citi Bank, Consolidated Discount Limited, Diamond Bank, Ecobank Nigeria Limited, Enterprise Bank, First City Monument Bank, Fidelity Bank, FSDH Merchant Bank, First Bank, Guaranty Trust Bank, Heritage Bank, Kakawa Discount House Limited, Keystone Bank, Mainstreet Bank, Rand Merchant Bank, Skye Bank, Stanbic IBTC Bank, Standard Chartered Bank, Sterling Bank, Union Bank, UBA, Unity Bank, Wema Bank and Zenith Bank.

    Chief executive officer, Nigerian Stock Exchange, Mr. Oscar Onyema, congratulated the dealing members and urged them to adhere to FMDQ’s rules.