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Tag: nestle

  • New Maggi Chicken Cube launched

    New Maggi Chicken Cube launched

    Nestle Nigeria Plc, makers of the Maggi cube, has launched a new flavour of the product, ‘The New Maggi Chicken Cube’.

    It was part of the effort to improve the company’s products and make them tastier, healthier and affordable with better nutritional value, the company said.

    Addressing reporters at its Ilupeju, Lagos office, Category Business Manager (Culinary) Guy Kellaway said the brand would always bring the best products to its consumers.

    He said: “With the new Maggi Chicken Cube added to our seasoning range, we aim to deliver the best chicken seasoning in the market, delighting our consumers and maintaining the highest levels of quality that Maggi is known for.”

    The manager explained that the new product contains iodine, salt and iron, perfect colour, inviting aroma and irresistible taste.

    He said the product could be used for rice and other dishes.

    Kellaway stressed that beyond what consumers wanted, the company would ensure it gained their trust and loyalty.

    Also, the company’s Managing Director and Chief Executive Officer Dharnesh Gordhon said: “We have always considered how to deliver the brand’s promise on nutrition, health and wellness.

    “We like to keep our promise, to improve the nutrition foundation across our portfolio. We have reduced the amount of those nutrients that have negative effect on health when consumed in excess and added food components and nutrients required to maintain good health.” he said.

    The product’s brand ambassadors are Tiwa Savage, Toke Makinwa and Dupe Killa, among others.

  • Nestlé records $11.14b profit amid challenges

    Swiss-based Nestlé, the world’s biggest food company, over the weekend announced a net profit of 10 billion francs ($11.14 billion) for 2013, down from 10.6 billion francs ($11.7 billion) in the previous year.

    In an interview with newsmen, the Global Chief Executive Officer, Nestlé, Mr Paul Bulcke said the macro-environment in 2013 was one of soft growth, minimal in the developed world and below recent levels in the emerging markets. He said despite this, the company was able to record a net profit of 10 billion francs.

    He added that the company recorded 44 percent sales worldwide, with 4.6 percent organic growth and 3.1 per cent real internal growth.

    “The macro-environment in 2013 was one of soft growth, minimal in the developed world and below recent levels in the emerging markets.

    “Our response was to increase brand support, accelerate innovation, and to ensure our pricing was sensitive to consumer needs.

    “This gave impetus to our real internal growth and, together with efficiencies and structural cost savings, contributed to our margin improvement and strong cash flow.

    “We also intensified our portfolio management which resulted in some charges in 2013 but ensures we are putting our people and resources behind the best opportuinities,” Bulcke said.

    He said the company’s long-term strategic is to be the leader in nutrition , health and wellness.

    “Our long-term strategic direction is to be the leader in nutrition, health and wellness. We reinforced this strategy with the creation of Nestle health science, and we are extending it now to the field of specialized medical skin treatments by setting up Nestle skin heaith”, he said.

    He said the company expect more challenges in 2014, adding that it will be very difficult to maintain the price of its products. But, he said the company will do everything to maintain a good price.

    He, however, commended West African region of the company, adding that the company has put in place a fantastic management in the region, in order to maintain a stronger growth.

    “The price of our products may not be easy to maintain in some countries, but we will do everything to maintain it. Our West African region is maintaining its growth. Thanks to the fantastic management we put ther,” Bulcke said.

  • Nestle considers sale of frozen food business

    Nestle considers sale of frozen food business

    Nestle is exploring a possible sale of frozen foods business Davigel for about $400 million as part of a drive to trim its sprawling portfolio, three sources familiar with the matter told Reuters.

    The world’s largest food company, which said on Monday it sold its PowerBar business, is close to appointing a bank to advise on the possible sale, the sources said. Nestle declined to comment.

    Potential buyers were likely to include food service providers such as Brake Brothers, Booker Group and Sodexho as well as private equity firms, the sources said. Bain & Co and Clayton, Dubilier & Rice are obvious choices, one said, since both have invested in food service in the past.

    Davigel’s 2012 earnings before interest, taxes, depreciation and amortization were between 30 million and 35 million euros and the business could sell for a mid- to high-single-digit multiple of that, two bankers said.

    Davigel – which supplies frozen and chilled meals and ice cream to restaurants and hospitals – was part of the Buitoni frozen food business Nestle bought in 1989.

    Nestle has not yet officially mandated a bank to sell Davigel but has worked closely with Credit Suisse in the past and is expected to appoint that bank for this deal. Credit Suisse declined to comment.

    Nestle – whose wide range of products includes Gerber baby food and Perrier bottled water – said in October it would divest underperforming businesses.

    It announced the sale of PowerBar and Musashi to Post Holdings on Monday, the sale of its US frozen pasta business to Brynwood Partners in January and the bulk of its Jennie Craig business in November.

    Nestle sold a 10 percent stake in fragrance and flavor maker Givaudan in December.

     

  • Contractors celebrate Escravos gas project

    Contractors celebrate Escravos gas project

    It was a ceremony that no doubt cemented the growing peace and trust between the ethnic groups in the area of operation of the American oil firm, Chevron Nigeria Limited. Hundreds of Itsekiri, Ijaw and Ilaje indigenous contractors gathered at the prestigious Wellington Hotel in Effurun, Delta State, to celebrate the completion of the construction stage of the CNL’s EGTL (Escravos Gas-to-Liquids) project in Ugborodo, Escravos, Warri Local Government Area. The ceremony was aptly tagged ‘EGTL Family Party’.

    Over 50 major local community contractors, who worked on the history-making $8.4 billion EGTL project, came together in a re-union, ending the ethnic tension and squabbles over contracts which greeted the project.

    The event was an opportunity for recognition and awards, singing and dancing and presentations by various stakeholders in the Oil and Gas industry.

    There were representatives of the Delta State Government, the Nigerian Police, the Management of Chevron Nigeria Limited, Local Community Contractors, traditional rulers and community leaders, men and women from all walks of life in the various communities. They all gathered to mark the successful completion of the construction phase of the EGTL project and to appreciate Chevron for the enormous socio-economic benefits the EGTL project afforded them as individuals and their communities in general.

    As one of the projects that has benefited local contractors the most in the region, it was not surprising that all the speakers took turns to praise the commitment of Chevron to building the capacities of the local community contractors and empowering them to compete favorably with their counterparts including established foreign firms, in various aspects of project construction in such a complex project as the EGTL.

    The EGTL construction work involved hundreds of contractors that embarked on engineering, procurement, fabrication and storage activities. Records of the project showed that more than 350 companies from Nigeria have supported the project since its inception in 2005. This, in turn, brought immense socio-economic benefits to the Niger Delta communities.

    Most stakeholders at the event conceded that the EGTL project contributed to peace and security in Delta State through infrastructure development such as the utilization of the NPA Delta Port in Warri, a scale of capacity building never before attempted and empowerment through contracts awarded to local contractions and job creation.

    It was gathered that over 15,000 Nigerians have benefitted from employment opportunities related to the project in the past eight years. More than 9,000 (or 60 percent) are believed to be from the Niger Delta. Also, hundreds have been specially trained to facilitate commissioning, start-up, operation and maintenance of the facility, which is scheduled to commence in the coming months.

    The contractors said the successful completion of the construction phase of the EGTL project has proved that Warri and the Niger Delta are investment-friendly. They also expressed delight that the EGTL has provided a model for Nigeria on how to work with communities to advance future projects that could provide similar benefits to other parts of Nigeria.

    Chairman of the organising committee of the event, Mr. Edmund Doyah-Tiemo, a former Chairman of the Egbama-Gbaramatu Communities Development Committee (EGCDC) and CEO, Broad Global Investment, said the NNPC/CNL’s Global Memorandum of Understanding (GMoU) helped to improve relationship with the communities.

    Speaking in the same vein, Chief Thomas Ereyitomi, CEO, Tomba Resources Limited, said the EGTL project created the window of opportunities for the integration of members of the local communities, particularly indigenous contractors, to play leading roles in the oil industry.

    Ereyitomi, a Warri Kingdom traditional titleholder, said: “The transformation witnessed by local contractors cannot be over-estimated and their involvement in the EGTL interestingly gave credence to the local content policy of the Federal Government,” he said.

    Mr. Geoffrey Mason, EGTL Director, Southern Gas Constructors (SGC) said: “EGTL stands as a testament to what can be achieved in Delta State; and it is a project that brought together people from many ethnic groups and allowed them to work peacefully side by side.”

    His counterpart, Mr. Mick Kraly, EGTL Project Manager, noted that the project created an atmosphere of unity, trust, love and learning for the participating contractors and workers on the project.

    For Mr. Deji Haastrup, General Manager, Policy, Government and Public Affairs (PGPA), it was delightful to see the LCCs put up such a wonderful occasion which testifies to the commitment of the company in building relationships that will engender peace, security, and socio-economic development of communities neighbouring its operations in the Niger Delta.

    The contractors were later assisted by traditional rulers, stakeholders and other guests to cut the party cake. The high point of the occasion was the presentation of awards to some key EGTL stakeholders including; Chevron Nigeria Limited, Messrs. Andrew Fawthrop, Chairman & Managing Director, Kevin Owens, Jide Ajide, Mick Kraly, John Ashima, Chima Nwogu, Trust Inimgba, Tim Hennessey and Geoffrey Mason.

    Representatives of CNL at the event include Emmanuel Imafidon (Director, Business Services); Kevin Owens, (GM, Delta Operations – represented by John Ashima, former EGTL Deputy Project Manager); Deji Haastrup (GM, Policy Government and Public Affairs); Michael Waters, (EGTL Strategic Manager), Chima Nwogu, (Warri Area Manager), Tunji Idowu, (Manager, PGPA West) and Trust Inimgba, (PGPA Superintendent, EGTL) and from SGC: Geoffrey Mason (EGTL Director, SGC) and Tim Hennessey (EGTL Site Business Manager).

    Other guests include Chief Alfred Makaraba Bubor, Mr. Joseph Atseyinku and Mr. Billie Mami.

     

     

     

  • Nestle launches school age health scheme in Ondo

    Nestle launches school age health scheme in Ondo

    Determined to raise awareness on importance of good nutrition and active lifestyle among many school age children, Nestle Nigeria Plc has inaugurated the ‘healthy kids’ programme in Ondo State.

    It also organised the maiden training programme for 100 teachers in 25 public primary schools in the state. This is in line with the company’s objective of being the trusted leader in nutrition and health to create shared value.

    Speaking at the event, the Managing Director/Chief Executive of the firb, Dharnesh Gordhon, said the programme launched in Lagos in 2011, had made significant progress in sensitising people about maintaining active lifestyles, particularly for children.

    According to him, the healthy kids programme forms an integral part of Nestle’s commitment to improve global nutrition through the promotion of greater awareness, improved knowledge and regular physical activities, which will have positive impact on health.

    He said: ”Education is therefore a powerful tool to ensure that children understand the value of nutrition and physical activity to their health throughout their lives.

    “As a leading nutrition company, we believe we can make significant contributions to the development of nutrition education through our extensive knowledge of nutrition, business competencies and resources including funding.”

    Gordhon said the organisation was collaborating with the Ondo State Universal Basic Education Board (SUBEB), the ministries of education and health, as well as Centre for Health Education, Population and Nutrition (CHEPON) to implement the healthy kids programme in Nigeria.

    The Executive Director of CHEPON, Prof Tola Atinmo, commended Nestle for its initiative which he said was also timely because of the poor state of nutrition among young children in various primary schools.

     

     

    Also, ondo State permanent secretary, SUBEB, Mrs Grace Ajayi, urged corporate bodies to partner with the state government for qualitative education.

     

  • Nestle Nigeria: Getting better

    Nestle Nigeria combined appreciable growth in sales with more efficient cost management and substantial deleverage of its balance sheet to deliver its most impressive results in recent years. Audited report and accounts of Nestle Nigeria for the year ended December 31, 2012 showed that significant reduction in financing charges and improved cost management accentuated top-line growth. Total sales grew by 19 per cent but pre and post tax profits rose by 38 per cent and 28 per cent respectively.

    With 28 per cent increase in net earnings per share, the board of the food and beverage multinational has recommended increase in cash payout by 59 per cent. The company is distributing about 75 per cent of net earnings for the year, gradually moving back to Nestle Nigeria’s traditional payout policy of almost distributing net earnings to shareholders. Besides, net assets improved by 47 per cent, underlying increase in equity funds due to improving retained earnings.

    The balance sheet position of the company emerged stronger with better financial structure and improved liquidity.

    Financing structure

    With zero immediate gearing ratio, the proportion of equity funds to total assets improved from 30 per cent to 38 per cent. The proportion of long-term liabilities to total assets dropped from 38 per cent to 33 per cent while current liabilities amounted to 28 per cent of total balance sheet size in 2012 as against about 32 per cent in 2011.

    Nestle Nigeria’s total assets increased by 14.5 per cent from N77.73 billion in 2011 to N88.96 billion in 2012. Long-term assets had increased by about 13 per cent from N55.5 billion to N62.61 billion. Current assets rose by 19 per cent to N26.36 billion as against N22.21 billion in previous year. Total liabilities remained almost flat at N54.78 billion in 2012 compared with N54.52 billion in 2011. Current liabilities stood at N25.18 billion as against N24.82 billion while long-term liabilities slipped from N29.70 billion to N29.60 billion. Paid up share capital remained unchanged at N396 million. Shareholders’ funds meanwhile grew by 47.3 per cent from N23.21 billion in 2011 to N34.19 billion in 2012.

     

    Efficiency

    Average number of employees increased marginally from 2,168 persons in 2011 to 2,179 persons in 2012. The company’s cost efficiency improved during the year as the company reined in relative cost of sales. Average cost of sale per unit of sale decreased in 2012, providing early headroom for profit growth. While average cost per staff increased from N5.21 million in 2011 to N6.08 million in 2012, average contribution of each employee to pre-tax profit improved from N8.39 million to N11.50 million.

    Overall outlook suggests improved productivity alongside the improvement in cost efficiency. Total cost of business, excluding finance charges, dropped slightly from 78 per cent in 2011 to 77.7 per cent in 2012.

     

    Profitability

    Nestle Nigeria recorded appreciable improvements in both underlying and actual profit and loss items. Substantial growths in sales and profit translated into equally significant increase in cash distributions to shareholders. The congruence between outward profit and loss items and key indices indicated a major rebound for a company that had struggled with higher costs and declining margins in the previous year.

    Total turnover rose by 19 per cent from N97.96 billion to N116.71 billion. Cost of sales increased by 16 per cent from N57.37 billion to N66.54 billion, providing impetus for 46 percent increase in gross profit from N40.59 billion to N59.17 billion. Total operating expenses however rose by 27 per cent from N19.08 billion to N24.18 billion. With about 72 per cent reduction in interest expenses from N3.32 billion to N939 million in 2012, profit before tax rose by 38 per cent from N18.2 billion to N25.05 billion. After taxes, net profit increased by 28 per cent from N2.08 billion to N2.67 billion.

    Earnings per share stood at N26.67 in 2012, representing an increase of 28 per cent on N20.81 recorded in 2011. Gross dividend increased by 59 per cent from N9.95 billion for 2011 to N15.85 billion for 2012, representing dividend per share of N20 for 2012 as against N12.55 distributed for 2011. Net assets per share also improved by 47 per cent from N29.28 to N43.13.

    Beyond the surface, underlying profitability indices improved considerably. Gross profit margin increased from 41 per cent to 51 per cent. Profit before tax margin also improved from 18.6 per cent to 21.5 per cent. Return on total assets stood at 28.2 per cent in 2012 as against 23.4 per cent in 2011. Return on equity however dropped from 71 per cent in 2011 to 62 per cent in 2012. Sustainable dividend outlook diminished slightly with a dividend cover of 1.3 times in 2012 as against 1.7 times in 2011.

    Segmental analysis showed growths across the two business segments. Turnover in the food business improved from N60.73 billion to N70.4 billion while profit in the segment increased from N13.40 billion to N16.05 billion. Sales in the beverage segment also improved from N37.23 billion to N46.31 billion. Profit before tax within the segment stood at N10.04 billion in 2012 as against N8.22 billion in 2011.

     

    Liquidity

    Nestle Nigeria emerged with stronger liquidity, signposted by positive working capital and better financial coverage for immediate liabilities. Current ratio, which measures the financial agility of a company by relating current assets to relative liabilities, improved from 0.90 times in 2011 to 1.05 times in 2012. Working capital/turnover ratio stood at 1.0 per cent in 2012 as against negative rate of 2.7 per cent in 2011. Debtors/creditors ratio stood at 70.8 per cent in 2012 compared with 76.1 per cent in 2011.

     

    Governance and structures

    Nestle Nigeria is a member of the Nestle Group, which holds about 62.76 per cent equity stake mainly through its Ghana-incorporated Nestle CWA Limited. There were no major changes in the board and management of the company. Chief Olusegun Osunkeye still chairs the board while Mr. Martin Woolnough, an Austrian, directs the executive management team. Nestle Nigeria subscribes to many international codes as well as Nigerian code of corporate governance for public companies. The annual report also contained corporate governance report detailing key principles, methodologies and actions. The highest-priced stock at the Nigerian stock market, Nestle Nigeria has also been hailed severally as the icon of good corporate governance. It has usually been the first quoted company to submit its audited report and accounts well ahead of due date and its forecasts are mostly reliable.

     

    Analyst’s opinion

    The latest report underlined the benefits from recent expansions, which have continued to stimulate the top-line performance of the company. With efficient cost management strategy, the company emerged with better profitability. Balance sheet restructuring, with attendant reduction in financing charges, had removed a major snag that had undermined the overall return outlook in previous years.

    The company appears to have found the right mix. Stable cost management strategy, deleveraged balance sheet and aggressive sales growth strategy should provide impetus for future growth. The company should remain focused on this three-prong strategy. Against the background of its market valuation, which had moved closer to historic six-digit level, Nestle Nigeria needs to justify investors’ confidence with higher earnings and dividend yields. Overall, there is reasonable basis to assume that the company would sustain its positive performance outlook.

  • Nestle grooms teachers

    In pursuit of its commitment to inculcate the importance of healthy lifestyle in school children, Nestlé has organised a workshop for teachers in Lagos and Abeokuta. The workshop was facilitated by the Centre for Health Education, Population and Nutrition (CHEPON), a worldwide organisation.

    The group, which was launched in Nigeria in 2011, aims at improving the nutrition, health and well-being of children aged six to 12 years old by promoting nutrition education, balanced diet, better physical activity and healthy lifestyle.

    During the workshop, teachers were equipped with useful insights and learning tools that will enable them to promote nutrition, health and well-being of students.

    The teachers were trained in nutrition education; use of teachers’ manual, children’s manual and some innovative ways in using food models, rhymes, poems and songs in the classroom setting. This aims at enhancing learning and promotion of healthy eating habits.

    Corporate Communications and Public Affairs Manager of Nestlé Nigeria, Samuel Adenekan said: “One of the objectives of the Nestlé Healthy Kids Teachers’ Workshop is to ensure that teachers deploy new nutritional education techniques. This is because classroom teachers often need more innovative teaching techniques than content.”

    He added that the workshop would focus on giving teachers the needed skills, non-lecture and active learning methods.

    With support from the Centre for Health, Population and Nutrition (CHEPON) in Nigeria, the initiative also received backing from Lagos State and Ogun State governments.

    Speaking at the workshop in Abeokuta, the Ogun State Commissioner for Education, Science and Technology, Segun Odubela commended Nestlé Nigeria Plc for its contributions to the advancement of education through the Healthy Kids Programme.

    Mr. Odubela said: “This programme is a powerful tool that ensures that children understand the value of nutrition and physical exercises. It also helps them to imbibe such values for healthy living throughout their lifetime.”

    Speaking at the event, a lecturer in the Department of Sports and Exercise Science at the Tai Solarin University of Education, Ijebu-Ode Ogun State Prince Folusho Onagoruwa said regular physical exercises could help the process of digestion, blood flow, emission of waste products, development of brain power, coordination of various body parts as well as encourage fair play in sports.

  • Why Nestle opened N5.4b Distribution Centre

    Food manufacturing giant Nestle Nigeria PLc scored another first in the sector when it inaugurated a N5.4 billion Distribution Centre in Agbara, Ogun State.

    Declaring the centre open, the Chairman, Nestle Nigeria Plc, Olusegun Osunkeye, said with the centre, goods such as beverages, maggi and golden morn would get to consumers faster than before.

    He said the centre is Nestle’s biggest factory not only in Nigeria, but also in West Africa.

    “Spread over an area of four hectares, the new 17,000-pallet capacity warehouse facility is designed to manage the capacity increases following massive infrastructural up- grades at the Agbara factory in the last five years,” Osunkeye said.

    The Managing Director, Nestle Nigeria Plc, Mr Martins Woolnough, said the centre was built in two years, adding that it uses Radio Shuttle Automatic Racks, a technology which moves goods faster, adding that the centre provides jobs for over Nigerian 1,800 staff.

    He said: “This new state-of-the-art Distribution Centre reflects more than just an important investment to broaden our nutrition, health and wellness business platform; it illustrates also our commitment to the growth of the economy.”

    He said Nestle has been doing business in Nigeria for over five decades, during which it brought value to the society by sourcing locally for maize, soya beans and other products, creating employment, offering high quality nutritious products to Nigerians.

    He said by “opening our distribution centre in Agbara, we will be closer to our consumers now and thus serve them better.”

    The facility, Woolnough added,wouldfurther strengthen Nigeria’s role as the largest manufacturing operation for Nescafe in the West and Central Africa region and that it is key to Nestle’s growth.

     

     

     

     

     

     

  • Nestle Nigeria declares N16b dividend

    •NSE’s index rises by 1.1 per cent

    Nestle Nigeria Plc has announced that it would distribute N14.66 billion as final cash dividends for the 2012 business year. This brings the total cash payouts for the year to N15.85 billion. The food and beverage giant had earlier declared interim dividend of N1.19 billion.

    In a statement made available to the investing public yesterday, Nestle Nigeria again blazed the trails as the first quoted company to release its audited report and accounts for the year ended December 31, 2012.

    The board of Nestle Nigeria indicated it would recommend a final dividend per share of N18.50 in addition to interim dividend of N1.50 paid in December 2012, bringing total dividend per share to N20.

    Key extracts of the audited report and accounts showed a general improvement in the profitability of the company. On the average, Nestle Nigeria made N21.46 in pre-tax profit on every N100 unit of sales in 2012 as against N18.58 recorded in previous year. Gross profit margin also improved from 41.44 per cent in 2011 to 42.99 per cent in 2012.

    While total sales rose by 19.1 per cent, improved cost management magnified the impact of sales growth on the bottom-line, pushing pre and post-tax profits up by 37.64 per cent and 28.12 per cent respectively.

    Total sales stood at N116.71 billion in 2012 as against N97.96 billion in 2011. Gross profit rose from N40.59 billion to N50.17 billion. Profit before tax increased to N25.05 billion in 2012 compared with N18.20 billion in 2011. Profit after tax rose from N16.50 billion to N21.14 billion. With these, earnings per share improved from N20.81 in 2011 to N26.67

    Nestle Nigeria, the highest-priced stock on the Nigerian Stock Exchange, rallied further on the back of the results, leading the advancers with a gain of N71 to close at a high of N981.

    With highly capitalised stocks leading the rally, the main index at the NSE, the All Share Index (ASI) rose by 1.12 per cent to close at 33,708.18 points as against its opening index of 33,335.11 points.

    Aggregate market capitalisation of all equities increased by N12 billion to close at N10.8 trillion as against its opening value of N10.7 trillion.

    Other top gainers included Nigerian Breweries, which rose by N7.99 to close at N169.99. Dangote Cement added N1.99 to close at N146.99. Presco rose by N1.65 to close at N25.90 while Cadbury Nigeria added N1.59 to close at N40.80 per share.

    On the downside, Julius Berger Plc led the decliners with a loss of N5.99 to close at N54 per share. Guinness Nigeria followed with a loss of N5 to close at N275. PZ Cussons Nigeria dropped by N3.25 to close at N37. Okomu Oil Palm lost N2.99 to close at N58 while GlaxoSmithKline Consumer Nigeria slipped by N1.77 to close at N47.96 per share.

    Turnover stood at 434.2 million shares valued at N4.35 billion in 7,293 deals. FBN Holdings was the most active stock with a turnover of 39.51 million shares valued at N790.01 million in 755 deals. Fidelity Bank was the second most active stock with a turnover of 32.50 million shares worth N108.32 million in 210 deals while Unity Bank placed third with a turnover of 29.95 million shares valued at N26.78 million in 224 deals.

     

  • What’s the next level for Nestle Nigeria?

    What’s the next level for Nestle Nigeria?

    Nestle Nigeria opens today with a year-to-date gain of 29.6 per cent, about 7.4 percentage points above the average return of 22.22 per cent at the Nigerian stock market. For a highly capitalised company with locked in volumes in the hands of core investors and long-standing buy-and-hold minority investors, this is a significant capital appreciation.

    With record personal and countrywide new high month-on-month, Nestle Nigeria is unarguably the best performing stock. At current market consideration of N577.50, is latest high, Nestle Nigeria is nearly twice the value of the closest-priced stock. All through the ups and downs, the stock has consecutively increased its share price in the past eight months.

    The 2012 performance reflected the historic trend of the food and beverages stock over the years. While the market tottered on the negative, Nestle Nigeria has consistently delivered positive full-year returns.

    As the recession shook the market in 2009, it more than doubled its share price from a low of N104.50 to a high of N247.72 and eventually closed at N239.50. The closing price for 2009 became the lowest price for 2010 as the company’s share price rose to a high of N401 and eventually closed the year at N368. In 2011, as the market stumbled with a negative year-to-date return of 19.5 per cent, Nestle Nigeria posted a positive return of 20.92 per cent, setting a new high of N470 per share.

    The company’s share price closed at N445.66. Besides setting new highs, Nestle Nigeria has also continuously set a higher low, indicating strong resilience that reassures on the share price. Lowest market value per share rose from N104.50 in 2009 to N239.50 and N367.83 in 2010 and 2011 respectively. It has maintained a down limit of N400 so far this year.

    Relating earnings to price

    Nestle Nigeria’s upwardly share price reflected the company’s strong fundamentals. With a dividend per share of N12.55 in 2009, bonus of one for five shares and cash dividend per share of N12.55 for the 2010 business year and another N12.55 for the 2011, Nestle Nigeria has consistently declared profit and made returns to shareholders over the decades. This sense of reliability reinforces the blue chip status of the stock. Latest audited report and accounts for the year ended December 31, 2011 still showed strong fundamentals, although the company appeared to be struggling with operating and interest expenses.

    Total assets rode on the back of significant increase in fixed assets to N76.94 billion compared with N60.35 billion in 2010, an increase of 27.5 per cent. Nestle Nigeria had sustained appreciable growth in sales during the year but rising costs, especially surging finance expenses, counterbalanced sales growth, leaving the company with profit growth of 1.6 per cent in 2011 as against 32.4 per cent in 2010.

    Total sales rose by 22.3 per cent from N80.11 billion to N97.96 billion. Profit before tax was almost unchanged at N18.54 billion in 2011 as against N18.24 billion in 2010. Profit after tax rose by 33.4 per cent from N12.60 billion to N16.81 billion. With these, basic earnings per share improved by 11 per cent from N19.08 in 2010 to N21.20 in 2011. Net assets per share rose by 32 per cent from N22.50 in 2010 to N29.62 in 2011.

    Dividend expectation

    But while the fundamental performance in 2011 showed a mixed-grill, Nestle Nigeria appears set for improved performance in 2012. Already, the board of the company has forecast that turnover would rise to N112.97 billion in 2012 while profit before tax and profit after tax could be N19.77 billion and N16.89 billion respectively. This implies possible earnings per share about N21.30 for 2012.

    But emerging results indicate that the company may surpass the fundamental targets for this year. Interim report for the first quarter ended March 31, 2012 showed a net profit of N6.17 billion in 2012 as against N2.57 billion in comparable period of 2011. Profit before tax had risen from N3.46 billion in first quarter 2011 to N7.35 billion in 2012. Turnover stood at N28.67 billion in 2012 as against N20.38 billion in 2011.

    By the second quarter, the food and beverages company witnessed substantial growths in sales and profitability. Turnover rose by 27 per cent to N56.68 billion by the six-month period ended June 30, 2012 as against N44.62 billion recorded in comparable period of 2011. Profit after tax jumped by 51.6 per cent to N9.85 billion in 2012 as against N6.49 billion in 2011. This indicated net earnings per share of N12.42 in first half 2012 compared with N8.18 in corresponding period of 2011.

    With these, Nestle Nigeria has made enough within the first half to cover its full-year dividend for 2011. Besides, the earnings outlook appeared strong. Given the first half performance, there is possibility that the company may surpass its modest full year profit forecast by double digit, giving the dividend-paying stock a new impetus for sustained rally.

    Besides, in a market still characterised by uncertainties and questions about corporate governance, Nestle Nigeria’s overall image of stability and consistency will continue to be major attraction. The compact nature of the outstanding shares of the company and the preponderance of buy-and-hold retail investors that see the stock as their nest eggs will also continue to mediate the share price fluctuation, making it resistant to downtrend.

    Most investors holding the free float shares don’t easily sell off. As a consistent dividend-paying stock, Nestle Nigeria provides cushion against the downturn at the secondary market. With recent huge investments in new factory and innovations, the company appears to have operational supports to drive fundamentals and by extension, market consideration.

    However, the general recovery at the stock market might embolden and turn the attention of investors to valuable low-priced stocks, with temptation to capitalise gains from stocks such as Nestle Nigeria to spread to other equities. But for investors in Nestle Nigeria, the assurance of the irreversible low is quite more certain.