The Nation Newspaper

Category: Investors

  • Nigerian Breweries to pay N19.4b net profit to shareholders

    The board of directors of Nigerian Breweries Plc has recommended payment of the entire net profit of N19.4 billion recorded in 2018 as cash dividend to shareholders for the business year, despite the decline in the company’s performance.

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

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

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

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

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

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

     

  • N89.2b rights issue: Lafarge Africa seeks approval for allotment

    Lafarge Africa Plc is seeking Securities and Exchange Commission’s (SEC’s) approval for the adoption of allotment results for its recent N89.2 billion rights issue.

    Its board of directors last weekend approved the proposed allotment for the rights issue, authorising the joint issuing houses to file the proposed allotment for clearance by SEC.

    Acceptance list for the N89.2 billion rights issue closed on January 28, 2018. It  had opened on December 17, 2018. Lafarge Africa had offered 7.43 billion ordinary shares of 50 kobo each at N12 per share. The rights were pre-allotted on the basis of six new ordinary shares for every seven ordinary shares held as at the close of business on December 4, 2018.

    The N89.2 billion rights issue was Lafarge Africa’s second issue in 14 months. Lafarge Africa had sold its November 2017’s rights issue of about 3.1 billion ordinary shares of 50 kobo each at N42.50 per share. The N89.2 billion rights issue was also structured like the November 2017 rights issue, including a convertible deal that allowed the majority core investor- LafargeHolcim, to convert its debts to equities.

    There are fears that with the debt-to-equities conversion and investors’ apathy at the primary market, the percentage shareholding of the majority core investor-LafargeHolcim, may increase after the latest rights issue.

    The November 2017’s rights issue had increased LafargeHolcim’s majority shareholding to 76.32 per cent. Lafarge Africa needs to maintain a minimum of 20 per cent of its shareholdings in the hands of minority shareholders to sustain its listing on the Nigerian Stock Exchange (NSE). With 76.32 per cent majority equity stake, LafargeHolcim already has the much-needed three-quarters percentage shareholdings necessary for major corporate changes.

    LafargeHolcim had taken advantage of the November 2017’s rights issue to increase its majority equity by 4.97 percentage points from pre-rights issue position of 71.35 per cent to 76.32 per cent after the rights issue.

    LafargeHolcim had picked up its rights fully and further subscribed to the un-allotted shares, thus raising its percentage shareholding. It subscribed fully to its rights under a debt-for-equities deal that saw conversion of LafargeHolcim’s dollar-based loan to equities.

    Lafarge Africa Plc Chairman, Mr Mobolaji Balogun, has said the additional capital raised from the latest rights would further help to deleverage the company’s balance sheet and provide head room for the expansion of its business.

    He said the company foresees a stable pricing environment and favourable economic conditions in its Nigeria market while its South Africa operations are undergoing a turnaround plan.

    Chief Executive Officer, Lafarge Africa Plc, Mr. Michel Puchercos said the company’s refinancing plan is aimed at preparing for future development in Nigeria by improving the company’s leverage as well as strengthening its profitability.

    Key extracts of the interim report and accounts of Lafarge Africa for the nine-month period ended September 30, 2018 had shown that sales rose from N223.67 billion in third quarter 2017 to N234.30 billion in third quarter 2018. With cost of sales rising from N165.76 billion to N178.21 billion, the cement company however, ended with a pre-tax loss of N14.36 billion in 2018 as against pre-tax profit of N1.09 billion in comparable period of 2017.

    After tax gain of N4.04 billion, net loss after tax stood at N10.37 billion in third quarter 2018 compared with net profit after tax of N937.91 million in comparable period of 2017. With these, loss per share for the nine-month period stood at N1.20 in 2018 as against positive earnings per share of 10 kobo in corresponding period of 2017.

     

  • NSE to launch new trading platform for mutual funds

    Authorities at the Nigerian Stock Exchange (NSE) will this weekend launch a new trading platform for collective investment schemes (CIS), otherwise known as mutual funds.

    The platform is expected to facilitate electronic transactions with seamless connection among key parties in transactions, including the Exchange, Central Securities Clearing System (CSCS), stockbrokers and fund managers.

    The NSE said the new platform aims to improve and enhance access of listed mutual funds to investors.

    “The overarching goal is to enhance visibility for the listed funds and promote financial inclusion, while stimulating retail investor participation in our market,” the NSE said.

    The new platform is also expected to engender listing of more mutual funds at the Exchange.

    The Nigerian mutual fund industry is a growing market as fund managers continue to float new funds to provide alternative investment windows for the investing public. Official report by the Securities and Exchange Commission (SEC) showed that there were some 74 registered mutual funds in Nigeria with total net asset value (NAV) of about N552 billion as at April 20, 2018. There are 47 mutual funds listed on the Memorandum Quotation of the NSE.

    A mutual fund is a pool of funds brought together by a professional fund manager from several investors to invest in selected underlying securities. The underlying securities can be one or a combination of the following: stocks, fixed income securities, real estate and commodities. A mutual fund portfolio is structured and maintained to match different investment objectives. The type of mutual fund an individual invests in depends on their financial objectives and appetite for risk.

    As professionally-managed joint investment vehicles through which investors can pool funds and invest in chosen basket of securities, mutual funds have proven to be a veritable means to optimise returns and reduce risks. With track records of above-average returns and stable performance, mutual funds provide common window for all cadres of investors-high and low networth, to invest in the various segments of the Nigerian economy and earn competitive returns.

    Most mutual funds are open-ended investment schemes. This means that the fund manager can create additional units for new investors on demand. The fund manager is also able to provide active liquidity by redeeming units from existing investors who want to sell units for cash. Through this pool of funds, an investor creates wealth over a long period of time by making the money work for him through regular saving and investment.

    In addition to liquidity, mutual funds offer a range of benefits to investors, including portfolio diversification and lower transaction costs. The existence of a Trustee and Custodian to a mutual fund ensures the safety of investments, as the Trustee ensures that the fund is managed in line with approved investment guidelines, and the Custodian holds the fund assets.

    Mutual fund investments are affordable for low-income investors, as some funds require an initial investment of only N5,000. The mutual fund assets in Nigeria have grown significantly in the last five years. This is an indication of the growing interest in this class of investment.

    Data from SEC on the Net Asset Value (NAV) of all registered mutual funds in Nigeria showed that the collective NAV grew by 349 per cent between November 01, 2013 and November 02, 2018. This translated to a Compound Annual Growth Rate (CAGR) of 35 per cent during the period.

    However, participation in the Nigerian mutual fund industry has been low, partly due to generally low level of investor education and awareness and particularly, the absence of good understanding and awareness about the mutual fund industry.

     

  • Govt, stockbrokers to join hands for economic growth

    The Federal Government and stockbrokers have reiterated their commitment to work towards the development of the economy.

    At an interactive session in Lagos, key members of the government’s Economic Management Team and capital market operators agreed on the importance of the capital market in national economic growth and development.

    Representative of the Vice President and Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah said the government was willing to partner the market operators to achieve growth.

    Outlining the government’s plans and achievements, Enelamah said the government has been making efforts to ensure sustainable economic growth.

    According to him, programmes, such as Ease of Doing Business in Nigeria, industrial policy and competitiveness, special economic zones, targeted sector policy reforms and trade agreements, among others, are aimed at providing enabling environment for sustained economic development.

    He urged stockbrokers to continue to make input to government policies as well as specific requirements for the market, assuring that government will always consider such input.

    Nigeria Investment Promotion Commission (NIPC) Chief Executive Officer, Ms Yewande Sadiku outlined efforts being made by the Commission to attract investors across the globe into Nigeria through an array of incentives.

    She advised stockbrokers to visit the NIPC website regularly and make input on how to attract investors.

    The interactive session generated discussions on how taxation is impacting negatively on stockbrokers’operations and the way forward.

    At the event organised by the Chartered Institute of Stockbrokers (CIS), stockbrokers urged the government to further take advantage of investment opportunities in the capital market to mobilise funds to execute development projects.

    Besides, they identified communication gap between the government and the market as one of the reasons for the government’s inability to put the market on the front burner of Nigeria’s economic revival strategy, urging the government to place the market on the same pedestal with money market without delay.

    Chartered Institute of Stockbrokers (CIS) President, Mr.Adedapo Adekoje said the government should use the market to fund this year’s  fiscal budget with ease.

    According to him, the government’s investment through savings bond and similar asset classes could not fully finance infrastructural deficit, hence, the urgent need to float revenue bonds in addition to general purpose bonds.

    He reiterated the need to re-constitute the board of the Securities and Exchange Commission (SEC) and accord the Commission a status of independence like the Central Bank of Nigeria (CBN) in line with the global best practices.

    In his presentation on “Strategies to achieve double-digit growth for Nigeria: The capital market option”, Mr. Mike Itegboje noted that developed economies leveraged  the market for growth and development.

    He urged the government to borrow a leaf from countries, such as the United States and China, which  place premium on the use of their  markets for development.

    “The U.S. capital markets are the bedrock of the nation’s economy and the deepest and most liquid in the world. That depth and efficiency is evidenced by the size of the gross domestic product, the strength of the US commercial sector, the level of home ownership, and the vast national infrastructure across the fifty states in comparison to the rest of the world”, Itegboje, a former president of CIS, said.

    SEC Acting Direcctor-General Ms Mary Uduk called for privatisation of moribund government enterprises through the market.

    According to her, such move this would not only ensure revival of the companies, but also deepen the market after listing.

    Uduk said the essence of the Commission’s Ten-Year Development Plan was to make market competitive.

     

  • Good times return at Lafarge

    Lafarge Africa Plc has re-turned to the path of profitable growth as the cement group started to reap the benefit of a new strategic plan aimed at improving operating efficiencies and connection with the market.

    Chief Executive Officer, Lafarge Africa Plc, Mr. Michel Puchercos, who spoke during awards for the company’s customers in Gombe, said the company embarked on a business transformation project,  aimed at improving operating efficiencies and interactions with its customers for a mutually beneficial relationship.

    According to him, the company is set to improve on the way it does its business by empowering its customers to become partners.

    “Our new strategy has started to deliver results and we are on a new path of profitable growth,” Puchercos said.

    He noted that customers helped the company to maintain its market position as its brand continues to enjoy the trust and respect which it has built with Nigerians over the years.

    Key extracts of the interim report and accounts of Lafarge Africa for the nine-month period ended September 30, 2018 had shown that sales rose from N223.67 billion in third quarter 2017 to N234.30 billion in third quarter 2018. With cost of sales rising from N165.76 billion to N178.21 billion, the cement company however ended with a pre-tax loss of N14.36 billion in 2018 as against pre-tax profit of N1.09 billion in comparable period of 2017.

    After tax gain of N4.04 billion, net loss after tax stood at N10.37 billion in third quarter 2018 compared with net profit after tax of N937.91 million in comparable period of 2017. With these, loss per share for the nine-month period stood at N1.20 in 2018 as against positive earnings per share of 10 kobo in corresponding period of 2017.

    Lafarge Africa held the awards ceremony to reward its performing trade partners for excellent performance in the year 2018. The Customer Appreciation Awards which held in three cities including Gombe, Ibadan, and Enugu, celebrated customers who distribute Lafarge Africa’s range of products from Ewekoro and Sagamu in the South West, Mfamosing in the South-South and Ashaka in the North East of Nigeria. Prizes given to outstanding customers include 11 tonne trucks, 5 tonne trucks commercial tricycles and an all-expense paid trip to Saudi Arabia, among others.

     

     

  • Royal Exchange’s directors hold emergency meeting on recapitalisation

    Directors of Royal Exchange Plc are to meet tomorrow in an emergency meeting aimed at reviewing ongoing recapitalisation process of the company.

    The board of the company indicated that the emergency meeting will receive and consider “update on the proposed investment in the company” among other businesses.

    Earlier, he board met to consider capital raising proposals and restructuring of the insurance-led investment group. The previous meeting had reviewed proposed investment in the company and other restructuring issues as well as the then National Insurance Commission (NAICOM)’s tier-based minimum solvency capital policy for the insurance industry. NAICOM subsequently cancelled the new capital structure.

    Royal Exchange Plc Company Secretary, Sheila Ezeuko, confirmed tomorrow’s meeting in a regulatory filing at the Nigerian Stock Exchange (NSE).

    Market analysts said the latest meeting indicated progress has been made in the supplementary capital issue, aimed at boosting the capital base of the insurance-led group and put it in stronger position to withstand any regulatory headwinds in the industry.

    Many analysts believed that insurance companies are still wary that NAICOM may reintroduce its new capital requirement or related policies. Under the aborted 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 are 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 are 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, will be required to have minimum capital base of N7.5 billion. Tier 3 companies will 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, 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.

     

  • NSE strengthens management with top appointments

    The Nigerian Stock Exchange (NSE) has announced the appointment of Mr. Jude Chiemeka and Mr. Olumide Bolumole to its executive management team. Bolumole joins NSE as Divisional Head, Listing Business while Chiemeka joins as Divisional Head, Trading Business.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, said the Exchange was excited to have attracted such outstanding young business leaders to its management team at a time it is executing organisational growth and market wide initiatives.

    “I look forward to working with Jude and Olumide to continue executing our strategy of becoming the preferred African Exchange hub. Also, I will like to express my deep gratitude to Tony Ibeziako, Head, Primary Markets and Olufemi Onifade, Head, Secondary Markets, for leading the teams during the transition period,” Onyema said.

    Chiemeka expressed his pleasure to join the Exchange during this important stage when the NSE is evolving into a demutualised Exchange.

    “The Exchange has undergone a lot of transformation and I look forward to working alongside the great teams at the Exchange to accelerate the execution of the company’s strategy and drive greater value for our investors,” Chiemeka said.

    Bolumole expressed readiness to work with other talented employees and seasoned leadership team at the NSE to create an even stronger globally competitive market that is the preferred choice of discerning issuers across continents.

    Chiemeka comes with over 24 years’ experience in securities trading and asset management across markets in Africa. He joined NSE from United Capital Securities Limited a subsidiary of United Capital Plc, where he was the managing director. He had previously led other leading investment banking firms in Nigeria including Chapel Hill Denham Securities and Rencap Securities (Nigeria). He is a Fellow of the Chartered Institute of Stockbrokers and an alumnus of University of Lagos, Lagos Business School as well as University of Oxford, United Kingdom.

    Bolumole is a financial market professional with close to two decades of experience in capital markets across; asset management and merchant banking.

     

  • Sterling Bank’s Specta extends five-minute loan to non-salary earners

    •Targets N40b loans for 50,000 customers

    Sterling Bank Plc’s innovative online lending platform, Specta, has extended its celebrated fast and immediate loan scheme to people who are engaged in personal businesses. The extension of the platform, which started with salary earners, to non-salary earners followed the huge success recorded by the platform in its first year of operations.

    Specta is an instant lending platform that offers consumer loans of up to N5 million in five minutes. The lending platform uses proprietary data and analytics to process and disburse consumer loans to salary earners who belong to pre-approved communities in less than five minutes without paper work and collateral.

    Divisional Head, Retail and Consumer Banking, Sterling Bank Plc, Mr. Shina Atilola, said the extension was due to the platform’s capacity to pre-screen borrowers and safely provide them with faster approvals and funding.

    He said Sterling Bank is keen to position Specta as Nigeria’s fastest lending platform as part of its strong desire to empower businesses and enable startups.

    Atilola, who spoke at a media interactive session to mark one year anniversary of Specta, said the platform has revolutionised convenience banking and opened up access to financial solutions.

    In her remarks, Head, Value Chain Banking, Sterling Bank Plc, Mrs. Benedicta Sadoh, said the bank was able to offer about N10 billion in loans to more than 11, 000 customers while also introducing credit cards, among others, to customers last year.

    She added that the bank is looking at giving out N40 billion in loans to 50, 000 customers this year.

    Responding to questions from journalists on how Sterling Bank hopes to attract and accommodate more customers of the bank on Specta, Atilola said the bank plans to achieve this through the use of social media while relying on a credit bureau to ascertain the customer’s character and capacity.

    He said the bank decided to expand the coverage of the product to accommodate more customers outside the bank’s customers because of the yearnings of other potential customers.

     

     

  • Stakeholders stress investment promotion in national growth

    •CEO launches book

    Nigerian investment experts and entrepreneurs have emphasised the need for collaborative efforts on investment education and promotion with a view to stimulating foreign and domestic investments in the country.

    At the  launch of ‘Riding The Eagle, A Guide to Investing In Nigeria’, a book written by Mrs Toyin Sanni, at the Nigerian Stock Exchange (NSE) in Lagos, the stakeholders noted the importance of investment in national development.

    Mrs Sanni, Chief Executive Officer of Emerging Africa Capital Group, said the book was written to help drive investment flow and make Nigeria a preferred destination for investments by providing detailed and concise information to investors.

    According to her, the book discusses Nigeria’s current economic challenges and proffers solution to some of them while providing a general overview of risk-return analysis to guide investors.

    “’Riding the Eagle’ is a guide for local and international investors seeking to exploit the unique opportunities in the Nigerian Economy,” Sanni said.

    Executive Vice Chairman, FAMFA Oil Limited, Mrs Folorunsho Alakija said the book was an appropriate and timely information guide for all stakeholders in the Nigerian investment sector.

    Acting Director General, Securities and Exchange Commission (SEC), Ms. Mary Uduk urged investment professionals to continue to take positive steps to attract and retain both local and foreign investments to stimulate economic growth and developed critical infrastructure necessary for the country’s development.

    She noted that stated that during the decision-making process, investors want to be sure of the rational basis of their investment decisions before transferring resources, and this is why quality information is needed.

    According to her, providing information to investors will enhance transparency in the Nigerian markets and improve our global reputation in the investment community.

    “’Riding the Eagle’ meets this imperative by providing comprehensive and up-to-date information on investing in the Nigerian markets via a roadmap and guide for foreign, domestic, institutional and individual investors alike. It also examines the challenges faced by the Nigerian economy across sectors, past and recent success stories and solutions to some of the nation’s economic and development challenges,” Uduk said.

    She pointed out that the book provides details on the key sectors that drive the performance of the Nigerian economy and what investment opportunities are available for interested investors and motivated entrepreneurs.

    She praised Sanni for putting at the disposal of the industry, the value of over one decade in the money market and another two decades in the capital market.

    “The book serves investor interests through this comprehensive and authoritative work on investment opportunities in the Nigerian economy. It is imperative therefore that we all as stakeholders continue to take positive steps to attract and retain both local and foreign investments to stimulate economic growth and develop critical infrastructure necessary for our country’s development,” Uduk said.

     

  • Afrinvest posts positive outlook on Seplat

    Analysts at Afrinvest Securities Limited have said Seplat Petroleum Development Company Plc has the potential to deliver above-inflation high returns in the months ahead.

    In a review of upstream oil and gas industry, Afrinvest outlined positive outlook for Seplat, noting that the company’s growth history and industry outlook make it a desirable stock for investors.

    “We are positive about the company’s prospects going forward. Over our forecast period, we expect Seplat’s revenues and overall profitability to be impacted by three major factors over our forecast period: stable oil production and an improvement in uptime to an average of 80.0 per cent, the success of the company’s diversification in its export route and stability in oil prices above US$50.0/barrel and persistent improvement in gas production,” Afrinvest stated.

    According to the report, in valuing Seplat, analysts used a blended valuation of the dividend discount model, residual income model, net asset valuation, EV/EBITDA and forward P/E valuation models. The model assumes a sustainable growth rate of 2.0 per cent and produced a blended 12-month target price of $1.78 per share share. Similarly, analysts deployed the relative valuation methodology using EV/EBITDA and forward P/E to arrive at respective value prices of $2.22 and $1.86 per share. Analysts then consolidated the various methodologies to arrive at 12-month blended target price of $1.86 or N681.50, utilising the one-year futures foreign exchange rate of N366.24.

    “Consequent on the estimated target price and the current market price, the stock presents an upside potential of 28.3 per cent from current price of $1.45 as at January 29, 2019. Hence, we place a ‘BUY’ rating on Seplat,” Afrinvest said.

    The report noted that in Seplat’s first five years of operations between 2011 and 2015, revenue grew at a five-year CAGR of 5.0 per cent, despite deep contractions in revenue by 12.0 per cent and 26.4 per cent in 2014 and 2015 respectively. This came even as oil production rose by 3.3 per cent and 19.6 per cent respectively to 24,252 boepd and 29,003 boepd in 2014 and 2015 respectively. The decline was largely due to the abrupt fall in oil prices which began in second half of 2014 and extended into 2015. Revenues were also further impacted by lower production uptime due to third party operated infrastructure, Trans focados, being shut-in for significant periods of time.

    For the 2018 business year, Afrinvest’s revenue estimate of $757.3 million was based on the company’s nine-month report by September, 2018, which showed that the company’s production operations were stable. Analysts projected revenue between 2019 and 2022 to grow at a CAGR of 13.0 per cent to $828.33 million, before moderating to a 6.0 per cent decline in 2023.

    Seplat had emerged as the 2018 overall winner of PEARL Awards.

    Managing Director, Seplat Petroleum Development Company Plc, Mr Austin Avuru, said the company’s recognition at the PEARL awards and others was a clear testimony to the modest successes so far achieved by it, for which he thanked the staff and management.

    Seplat and the Nigerian National Petroleum Corporation (NNPC) had in August 2018 signed joint ownership agreement in a joint venture floated to process gas production from upstream assets.

    Seplat signed the shareholder agreement and share subscription agreement with the Nigerian Gas Processing and Transportation Company (NGPTC), a wholly owned subsidiary of NNPC.

    Under the deal, NGPTC will subscribe for 50 per cent of the shares in ANOH Gas Processing Company Limited (AGPC), a company that was incorporated in 2017, for the purpose of processing future wet gas production from the upstream unitised gas fields at OML 53 & OML 21, which is operated by Shell.

    The signed shareholder agreement will govern Seplat’s and NGPTC’s respective interests in the AGPC incorporated joint venture. Other commercial agreements with NNPC and the Nigerian Gas Marketing Company (NGMC) were also executed during the signing ceremony held at NNPC headquarters in Abuja yesterday.