Redstar Express Plc in a facts behind the offer presentation held last week at the Nigerian Stock Exchange (NSE) highlighted the motives behind its planned capital raise. The company had last month gotten approval from shareholders to raise fresh capital and transit to a holding company structure. Managing Director of the company Olusola Obabori said the capital raise will be done in two tranches.
Where will the money be used for?
Proceeds of the capital raise will be used to expand the company’s operations to other countries, Redstar Express Plc opened an office in the Republic of Niger in March this year. In addition, the company plans to invest in new ventures such as agro chain services, pharmaceutical logistics, technological services, prints and packaging.
The agro space in Nigeria is beginning to experience some buoyancy. Quite a lot of countries, especially in Europe and the United Kingdom, are beginning to request for products in Nigeria to be shipped to them. In the last 18 months, people have gone so much into farming in Nigeria trying to create new wealth in that environment. So, for us as a company we are beginning to look at the agro chain services, so we can move our products and services into that environment
Targets for the year
The company has set a year end target of N8.1 billion for turnover, while profit before tax and after tax of N883 million and N618 million respectively. First quarter results for the company show turnover increased from N1.5 billion in 2016 to N2.0 billion in 2017. Profit before tax increased from N159 million in 2016 to N176 million in 2017. Profit after tax also increased from N108 million in 2016 to N120 million in 2017.
Red Star Express Plc was incorporated in as a private limited liability company on 10 July 1992 and it commenced business on 12 October 1992. The company became a public company on 9 July 2007 and subsequently listed its shares on the NSE on 14 November 2007. Redstar Express Plc shares are currently trading at N5.46 in today’s NSE session.