The Nation Newspaper

Category: Investors

  • Low share price threatens Mutual Benefits Assurance’s N2b rights issue

    TRading in shares of Mutual Benefits Assurance Plc opens today at the Nigerian Stock Exchange (NSE) at 37 kobo

    ‑  26 per cent below the insurance company’s rights issue price of 50 kobo, which also opens today. The company has traded within a high of 50 kobo and a low of 24 kobo in the past 12 months.

    The company is opening application list for a rights issue of N2 billion as part of efforts to increase its capital base. It  is offering 4.0 billion ordinary shares of 50 kobo each to existing shareholders at 50 kobo per share. The rights issue has been provisionally allotted on the basis of one new ordinary share of 50 kobo each for every two ordinary shares held as at the close of business on November 1, 2017.

    Application list for the rights issue will close on Friday, September 14, 2018. Both the Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) had earlier approved the supplementary offer.

    Market analysts said minority retail investors might find the secondary market more attractive, given the double-digit discount to the offer price. However, major investors will need to pick their rights to avoid share dilution and retain the current shareholding structure.

    Shareholders of the insurance company had at an Extraordinary General Meeting in Ibadan, Oyo State on June 27, 2018 approved the recapitalization plan. Mutual Benefits Assurance has an authorised share capital of N10 billion and a paid up capital of N4 billion.

    The company had, last year, started implementation of a five-year strategic plan aimed at repositioning it for future opportunities and challenges.

    The five-year plan focused on four key areas of the group’s business including deepening market penetration and customer acquisition, customer service delivery excellence, transformation of its people and culture and operational effectiveness.

    Its Chairman, Dr. Akin Ogunbiyi, said the net proceeds of the rights issue would be used to finance the company’s growth plan including provision of additional working capital and expansion of information and communication technologies to support the company enlarged operations.

    He said the strategic goal of the company is to become the number one insurance company in Nigeria in terms of growth and profitability.

    He said new investments in technologies would help the company to eliminate delay in its processing and focus more on customer satisfaction.

    Mutual Benefits Assurance’s bouquet of insurance products include aviation, oil and gas, marine cargo and hull business and other non-life insurance underwriting, including motor, fire and special perils, goods-in-transit, engineering insurance and retail insurance.

     

  • GNI’s minority shareholders get October deadline on delisting offer

    The board of Great Nigeria Insurance (GNI) Plc has given minority shareholders October 24 deadline to accept payment in consideration for voluntary delisting of the insurance company from the Nigerian Stock Exchange (NSE) or elect to be part of an unquoted company.

    In a circular at the weekend, GNI stated that shareholders who wish to sell their shares and exit the company as a result of ongoing process of delisting from the NSE may trade their shares at the secondary market or accept exit consideration being offered by the majority core investor in the company.

    Shareholders of GNI penultimate week approved a proposal by the board of directors for immediate delisting of the insurance company from the NSE.

    As part of the delisting process, Insurance Resourcery and Consultancy Services Limited (IRCSL), which owns majority equity stake in the company, is offering to pay cash consideration of 50 kobo per share for every share surrendered by minority shareholders. The exit price of 50 kobo is based on the highest price of 50 at which GNI has traded in the last six months.

    The total payment accruing to minority shareholders that elect to accept the exit consideration shall be collated on October 24, 2018, the deadline for the acceptance of the offer. Thereafter, payment will be made to the bank accounts of the shareholders within 24 hours.

    The board of the company assured that shareholders that intend to continue to be a member of an unlisted GNI shall be free to remain and they have no obligation to receive the exit consideration.

    In an explanatory statement on the proposed delisting, the board of the company noted that the voluntary delisting will shield it from any enforcement action that may arise as a result of the outstanding free float deficiency at the NSE.

    The board also noted that over the last five years, there has been little or no trading on the shares held by the minority shareholders, pointing out that there has also been a considerable fall in trading volumes over the last 12 months with an average daily volume of circa 1,200 shares during the period between March 2017 to March 2018.

    The board argued that shareholders were not benefiting from the continued listing as shareholders were not getting any exit opportunity and their investments have been locked up and they found it difficult to dispose of their shareholding.

    The board added that the company has neither benefitted from the continuing listing as its shares continue to trade at a significant discount to the intrinsic value.

    “Furthermore, through the voluntary delisting process, the company will be providing an exit consideration to minority shareholders who do not wish to remain in an unlisted company,” GNI stated.

    The board of directors said the delisting will afford the company opportunity to further an imminent corporate restructuring exercise to take advantage of emerging opportunities, noting that the company may consider re-listing on the Exchange in the future if the market conditions are favourable.

     

     

     

    According to the company, the voluntary delisting will not occasion loss of business opportunities as there are similar unlisted insurance companies who are commanding significant share of the insurance market.

    Also, minority shareholders will not lose their shares because of the voluntary delisting and such shareholders may retain their membership in the unlisted company. However, through the voluntary delisting, the minority shareholders – who do not wish to be members of an unlisted company – will have an opportunity to exit the company.

  • ‘Why Great Nigeria Insurance is delisting’

    Great Nigeria Insurance (GNI) Plc is pushing  to be delisted  from the Nigerian Stock Exchange (NSE) mainly because majority core investors are unwilling to dilute their shareholdings to free up more shares for minority retail investors.

    GNI Shareholders are scheduled to meet today in Lagos at an extraordinary general meeting to consider a proposal by the board of directors for the delisting of the insurance company from the NSE.

    In a statement on the proposed delisting, the board of the company noted that GNI’s free float currently stands at 16.03 per cent, significantly below the NSE’s minimum free float of 20 per cent for company listed on the main board of the Exchange.

    While the Quotations Committee of the National Council of the Exchange has extended the timeline for GNI to free up more shares to May 2020, the company stated that it may not be able to improve its free float within the period.

    “We do not expect that this deficiency will be cured during that period and we expect the NSE to initiate a regulatory delisting,” GNI stated.

    According to the board, through the voluntary delisting of GNI, the company will be exercising a regulatory provision that will shield it from any enforcement action that the Exchange may effect, which may arise as a result of the outstanding free float deficiency.

    The board also noted that over the last five years, there has been little or no trading activity on the shares held by the minority shareholders, pointing out that there has also been a considerable fall in trading volumes over the last 12 months with an average daily volume of about 1,200 shares between March 2017 and last March.

    The board argued that shareholders were not benefiting from the continued listing as shareholders were not getting any exit opportunity and their investments have been locked up and they found it difficult to dispose of their shareholding.

    The board added that the company has neither benefitted from the continuing listing as its shares continue to trade at a significant discount to the intrinsic value.

    “Furthermore, through the voluntary delisting process, the company will be providing an exit consideration to minority shareholders who do not wish to remain in an unlisted company,” GNI stated.

    The board of directors said the delisting will afford the company opportunity to further an imminent corporate restructuring exercise to take advantage of emerging opportunities, noting that the company may consider re-listing on the Exchange in the future if the market conditions are favourable.

    According to the company, the voluntary delisting will not occasion loss of business opportunities as there are similar unlisted insurance companies who are commanding significant share of the insurance market. Also, minority shareholders will not lose their shares because of the voluntary delisting and such shareholders may retain their membership in the unlisted company. However, through the voluntary delisting process, the minority shareholders – who do not wish to be members of an unlisted company – will have an opportunity to exit the company.

    As part of the delisting plan, Insurance Resourcery and Consultancy Services Limited (IRCSL), which owns majority equity stake in the company, has expressed willingness to pay a cash consideration of 50 kobo per share for every share surrendered by minority shareholders. The exit price of 50 kobo is based on the highest price of 50 at which GNI has traded in the last six months.

    “Shareholders that intend to a member of an unlisted GNI Plc shall be free to remain and there is no obligation to receive the exit consideration,” the board stated.

     

  • NIPCO shareholders okay N563m dividend

    Shareholders of NIPCO Plc have approved the payment of N563 million as dividends for last year. This represents a dividend per share of N3.

    At the Annual General Meeting (AGM) in Abuja, shareholders commended the board and management of the company for the consistent payment of dividend since the company started operations in 2004.

    A shareholder, Sani Yau, said shareholders were excited by the fact that the company had been paying dividend yearly, despite the economic headwinds.

    He added that the company had  shown a lot of concern in social investment through its plethora of interventions in education, donations for the upkeep of children in orphanages and sports promotion.

    Key extracts of the audited report and accounts of NIPCO for the year ended last December 31 showed that turnover rose by 35 per cent from N170 billion in 2016 to N205 billion this year while profit after tax rose from N1.8 billion in 2016 to N2.1 billion last year.

    NIPCO Plc Managing Director, Mr Sanjay Teotia, in his maiden address to shareholders, said the management team has remained focused on pursuing its major targets, especially growing its market in petroleum products marketing.

    According to him, management would continue to emphasise the transformation of the company’s systems and processes to deliver  value to shareholders and other stakeholders.

    He outlined other major targets of the company to include making steady progress to ensure more visibility of NIPCO stations nationwide; ensuring friendly customer care at all its business lines across the nation; aligning with government in providing access to LPG at affordable price and supporting government in providing fuel to motorist through use of Compressed Natural Gas (CNG).

    “We are not oblivious of the fact that to take the organisation to the next level, we must improve on our core competencies and explore other business ventures and opportunities. We are upbeat of improving performance taking into consideration the organisation highly motivated and skilled employees as well as exemplary customer service at all our strategic business units,” Teotia said.

  • Cutix declares 880m bonus shares

    •N176.13m dividend

    Shareholders of Cutix Plc will receive 880.66 million ordinary shares of 50 kobo each as bonus shares in addition to cash dividend of N176.13 million, as the cable-manufacturing company continues to improve its operations.

    Shareholders will receive a dividend per share of 20 kobo and a bonus share of one new ordinary share of 50 kobo each for every one ordinary share of 50 kobo each held as at the closing date. The dividend payment is expected to be approved at the Annual General Meeting (AGM) scheduled for Friday, October 26 in Nnewi, Anambra State.

    Company Secretary, Chinwendu Nwokporo, said the board also approved draft annual report and accounts of the company for the year ended April 30, 2018 as well as the appointment of three non-executive directors for election at the annual general meeting.

    The board of directors of Cutix Plc approved the combined bonus share and cash dividend distribution at their meeting on Thursday July 19, 2018.

    Cutix is an indigenous company wholly owned by Nigerians. Incorporated in 1982, the company gradually transformed from a private limited liability company formed and owned by friends and family members to become a publicly quoted company.

    Cutix recently invested about N300 million on a new extension of its factory as part of efforts to increase the installed production capacity of the cables-manufacturing company. The new factory extension was expected to impact positively on the production capacity and efficiency of the company and to enable it to further improve its performance notwithstanding the increasing competition in the cables industry.

  • NSE lifts suspension on Royal Exchange

    The Nigerian Stock Exchange (NSE) has lifted suspension on trading in the shares of Royal Exchange Plc, after the insurance and investment holding group submitted its full-year audited report for the 2017 business year.

    The NSE had on July 5 suspended trading on shares of eight 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.

    The suspended companies included seven insurance companies and an auto company, namely African Alliance Insurance, Cornerstone Insurance, RT Briscoe, Royal Exchange, STACO Insurance, Standard Alliance Insurance, Universal Insurance Company and Veritas Kapital Assurance.

    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.

     

  • Lafarge Africa grows H1 turnover to N162b

    •Plans N90b rights issue

    Lafarge Africa Plc grew its top-line by 11 per cent to N162 billion in the first half of this year as a strong performance in the group’s Nigerian operation mitigated drawback from South African operations.

    Key extracts from the interim report and accounts for the six-month period ended June 30, 2018 showed that group turnover rose from N154.81 billion in first half 2017 to N162.29 billion in first half 2018. Gross profit and operating profit stood at N38.96 billion and N16.34 billion in 2018.

    The board of Lafarge Africa has also approved the extension of existing shareholder loan and a right issue of up to N90 billion, as part of efforts to reduce the company’s leverage position as well as strengthen its profitability.

    The company’s Chief Executive Officer, Mr. Michel Puchercos, said the group continued to deliver strong margins in its Nigerian business as a result of its commercial and energy strategies.

    He noted that the group performance was adversely impacted by timing of inventory movements and performance of its South African business.

    According to him, Lafarge Africa’s commercial, logistic and industrial operations in second quarter of 2018 continued to improve strongly despite inflation and foreign exchange impacts.

    “We continued to deliver on our energy improvement plan, with notable increased use of alternative fuel and coal. Our logistics and commercial initiatives such as improved product visibility and fast tracking of the new route to market also contributed to the strong performance in the second quarter,” Puchercos said.

    He added that the group is focused on executing its turnaround plan and improvement of margins in its South African operations.

    “Full year outlook for the cement market in Nigeria remains favourable with positive signs of recovery since March. Lafarge Africa Plc’s business turnaround actions will continue to deliver in 2018 through energy optimization as well as commercial and logistic improvement,” Puchercos said.

    He noted that as the South African economy is expected to grow in 2018, the turnaround plan of the South African operations is focused on cost containment, commercial transformation and industrial stabilisation. Further analysis of the results showed that the group recorded net loss of N3.90 billion in first half 2018 as against net profit of N19.73 billion in first half 2017, largely due to the decline in the South African business.

    “The overall goal is to create shareholder value by returning the South African business to profitability through improved margins,” Puchercos said.

     

  • How to tackle illicit trade in Africa – Alessandro Poggiali

    Mr. Alessandro Poggiali is Philip Morris International’s Vice President, Corporate Affairs Middle East, and Africa. In this interview, the renowned expert shares insight on the role of governments, private sector investors’ across-borders in the bid to effectively stop illicit trade of tobacco products in Africa, its addendum risk and security matters.

    He granted the interview at a two-day meeting of the National Employers’ Confederation of Senegal (CNES) in Dakar, on critical issue of illicit trade with high-level stakeholders from the continent for strong recommendations toward finding a lasting solution.   Excerpts

    What is the overall situation of illicit trade worldwide and particularly in countries in sub-Saharan Africa?

    We have given two quality days to discussing this critical issue, which, to me is a common issue of different factors. I would say illicit trade of goods in general is pretty important all over the world. The more there is a demand of the product, the more the smugglers are interested in supplying it. So you will find illicit trade in different domains, from electronics, to medicine, toys, tobacco or whatever and just to give you a few figures, the size of illicit trade of tobacco is one thousand billion of US dollars. If we situate it in the context of the financial volume and the missed fiscal revenue generated from it that can be accounted to 50 billion dollars. You can imagine things you can do with 50 billion dollars. I am sure if those 50 billion dollars were available in any country in the world, the government would be able to do many things with it. Illicit trade is a complex issue as we said because it includes a number of interests which are being touched. It includes the consumer interest being damaged because they have access and purchase products which are not legally compliant with the specific regulations of a market.

    Some anti-tobacco organizations, particularly in Senegal, claim that the tobacco industry is involved in the organization of the illicit trade. What can you say about that allegation?

    I can say that it is an allegation! Our company, Philip Morris International, is doing really their best to fight illicit trade. I can give you few examples. Firstly, we have established a department which is fully dedicated to illicit trade, with expertise coming from different countries in the world and with different type of expertise dedicated just to fight that phenomenon. Secondly, we are entering into corporation agreement with multiple countries throughout the world to fight this phenomenon, specifically we have signed around 50 memorandum of understanding all over the world and the signers of those memorandums of understanding have identified and helped shut down almost 50 illicit factories last year. Thirdly, we are putting a significant amount of resources in a fund which is called PMI IMPACT managed by a group of independent experts, we just provide the funds, we don’t interfere with how it will be used, and we have put in this fund a total of 100 million US Dollars and it will be accessible to public and private institutions with projects to fight criminality and illicit trade. I think illicit trade is a complex issue which needs to be fought collectively. We can do our part and we are ready to do our part but we also need to have clear views from regulators on what is a legal operator, what is not a legal operator and we need a system of sanctions.

    There is a lot of talk about the security aspects of illegal trade, is there really a link between illicit trade of tobacco products and terrorism for instance?

    This was what came out very strongly during these two days at the conference, that illegal trade is not only an issue when it comes to tobacco because the profit of those illegal trades tends to go to organized crime, with a likelihood of financing terrorism and moreover the routes that those products go through are very much similar to the routes for other illegal products. For instance, weapons, drugs, etc., so it’s definitely a risk we would say.

    What are the solutions to be put in place and what is Philip Morris committed to doing to fight against illicit trade?

    I think illegal trade can only be fought if we are all together, because of its magnitude being very big, we need to fight it collectively. So definitely, public-private partnership is an approach which we support and we believe we can contribute to the solution this way. Being part of the solution, we can share with the authorities intelligence, experience, and also facilitate access to technology. This is part of why as I said before, we are entering into multiple memoranda of understanding in many countries to address that specific need.

    We are doing all we can. And, why are we? We are doing all we can because first of all, it is the right thing to do. Secondly because it is the right thing

  • Transcorp grows net profit by 161% to N10.9b

    Transnational Corporation of Nigeria (Transcorp) Plc recorded impressive growths in turnover and profitability in the first half with net profit rising by 161 per cent to about N10.9 billion.

    Key extracts of the interim report and accounts of Transcorp for the six-month period ended June 30, 2018 showed that turnover rose from N34.17 billion in first half 2017 to N54.09 billion in first half 2018. Profit before tax jumped by 163.6 per cent to N11. 94 billion in first half 2018 as against N4.53 billion recorded in comparable period of 2017.

    After tax, net profit grew by 161.2 per cent from N4.16 billion in 2017 to N10.88 billion in 2018. Earnings per share also leapt from 3.87 kobo in first half 2017 to 11.60 kobo in first half 2018.

    The first half performance further reinforced Transcorp’s turnaround after the conglomerate recovered from a pre-tax loss of N5.93 billion in 2016 with a pre-tax profit of N12.31 billion in 2017. The audited report and accounts of Transcorp for the year ended December 31, 2017 showed that turnover rose by 35 per cent from N59.42 billion in 2016 to N80.28 billion in 2017. Gross profit increased by 21 per cent to N36.42 billion in 2017 compared with N30.17 billion in 2016. Operating profit increased by 25 per cent from N20.72 billion in 2016 to N26.03 billion in 2017.

    Foreign exchange loss reduced to N4.55 billion in 2017 as against N18.7 billion in 2016 while net finance cost also improved from N26.64 billion to N13.73 billion. The company made provisions for N1.7 billion taxes in 2017 compared with tax credit of N4.80 billion received in 2016. With these, it reversed from a loss before tax of N5.93 billion in 2016 to profit before tax of N12.3 billion in 2017. After, taxes, net profit stood at N10.61 billion in 2017 as against net loss of N1.13 billion in 2016.

    The balance sheet position of the conglomerate also improved in 2017 as total assets rose by 23 per cent to N285.52 billion in 2017 as against N232.16 billion in 2016. Shareholders’ funds rose by 11 per cent from N86.45 billion in 2016 to N95.71 billion in 2017.

    Transcorp Plc Chief Executive Officer, Mr. Adim Jibunoh said the conglomerate’s businesses are in good position to sustain growth going forward.

    “We are confident of improved fundamentals going forward, as we increase our available generation capacity to above 800 megawatts by year-end taking advantage of improving gas situation. We equally expect to benefit from the upside of the new improved infrastructure upon completion of our upgrade project in Transcorp Hilton Abuja. The upgrade project is currently on track,” Jibunoh said.

    Transcorp’s group strategic investments include power, hospitality, agribusiness and oil and gas sectors. The group’s notable businesses are Transcorp Hilton Hotel, Abuja; Transcorp Hotels Calabar; Transcorp Power Plc, Teragro Commodities Limited and Transcorp Energy Limited.

  • eTranzact to deepen financial inclusion

    ETranzact is set to deepen financial inclusion by expanding its PocketMoni service with 10,000 active mobile money agents within the next 24 months. The expansion comes under the Shared Agent Network Expansion Facility (SANEF) initiative being funded by the Central Bank of Nigeria (CBN).

    The SANEF initiative is an effort by the apex bank to spur quick growth in the level of financial inclusion through availability of financial access points, especially in the Northern part of the country.

    This is also intended to drive the Federal Government’s Social Investment Programme (SIP), which relies on improved banking agent network coverage points.

    To ensure effective results, eTranzact was certified as one of the 10 mobile money operators and super agents to roll-out 500,000 agent locations within the next 24 months.

    eTranzact has recorded success in its PocketMoni mobile money service which has empowered over 9,000 agents and two million end-users with ready access to financial services, is well position to deliver on its new SANEF mandate.

    Managing Director, eTranzact, Mr. Niyi Toluwalope, said the company as a global leader in the electronic and mobile payment industry is well-positioned to deliver and attain the goals set by the CBN for the project.

    According to him, over the next 23 months, eTranzact plans to leverage its mobile financial services business to deliver an additional 1,000,000 active end-users, by deploying its innovative distribution capabilities anchored on its active agents.