UAC Nigeria Plc released its 9 months 2012 unaudited accounts with revenue rising 9% year on year to N47.5billion. The company also grew operating profits by an impressive margin of 23.6% to N12.6billion. The company posted a pre-tax profit of N5.8b at the end of the period resulting in a 31% increase year on year.
UAC is one of the biggest companies in Nigeria and has remained profitable over the years. With strong balance sheet size of about N130billion the company is able to leverage on its size to drive turnover. Asset turnover for the period was an impressive 38% even as operating profit margin rose to 14.5% for the period. The company also posted strong ability to generate cash as its net cash flow from operations was over N11billion just as it was a year ago. UAC is currently priced N39 trading at 11x its pre-tax earnings and 16X its trailing earnings for the last financial year. Is there a buy opportunity for me? Certainly, provided the price drops below N33.
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