The Nigerian Stock Exchange (NSE) yesterday placed the shares of the following companies on full suspension.
1) African Alliance Insurance Plc
2) Cornerstone Insurance Plc
3) R. T. Briscoe Plc
4) Royal Exchange Plc
5) STACO Insurance Plc
6) Standard Alliance Insurance Plc
7) Universal Insurance Company Plc
8) Veritas Kapital Assurance Plc
The NSE also stated that the suspension would only be lifted upon the submission of relevant accounts, which complied with all applicable rules of the Exchange.
Full suspension means there will be no trading in the company’s shares, and their share prices will be frozen.
Usual suspects abound
Some of the suspended firms are perennial offenders. African Alliance Insurance has been suspended several times in the last few years.
An X compliance report released in April this year, revealed the company was fined N46.1 million in 2017. The company in July 2013 was among several firms fined by the NSE for late submission of their audited results.
In July 2017, the company once more fell under the NSE hammer as it was suspended for non-submission of its audited results. It blamed the delay in the submission of results on a delay by a foreign subsidiary, which was yet to release its results.
Signs of a deeper issue
The non-release of their results are a sign some of the companies are struggling. Most recent results by R.T Briscoe for the 9 months ended September 2017 show the firm made a loss after tax of N1.7 billion.
The company also has negative retained earnings of N8.5 billion and negative cash flow. In essence, it is surviving on bank loans.
African Alliance Insurance ‘s most recent results for the 9 months ended September 2017 show it made a loss after tax of N2.1 billion and negative retained earnings of N24.8 billion.
Universal Insurance, a sister company to African Alliance has also performed poorly. The company made a loss after tax of N237 million for the half year ended June 2017. Universal also has negative retained earnings of N2.9 billion as at June 2017.
African Alliance Plc was incorporated as a private limited liability company in 1960. The company became a Public Liability Company following the successful completion of a private placement exercise in June 2008.
Investors are perhaps better off avoiding these companies pending when their suspension is lifted and they publish their most recent results. Being suspended also means you cannot purchase their stock and can’t sell either.