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Markets

Corporate Actions: Mixed signals and new board members

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Corporate Actions, NSE

Corporate actions are decisions taken by companies’ boards of directors or management teams, that could have impact on the firms themselves or shareholders.

Examples of corporate actions include the payment of dividends, closing of shareholders’ registers, announcing qualification dates and Annual General Meeting (AGM) dates.

Here is a review of corporate actions that took place last week

Mixed signals 

Continental Reinsurance gave mixed signals pertaining to its delisting (or otherwise) from the Nigerian Stock Exchange (NSE). The  company, in a notice to the NSE, debunked a report by the Punch newspapers denying delisting plans, saying that its MD was misquoted.

The report (which is still on the Punch website, as at the time of writing this) cclearly quotes the MD of the firm as saying:

“We need all the capital we can get for this restructuring. So, it is not even a wise decision to delist. People saying that we plan to delist are spreading rumours.

We have no plans to delist or to do a change of name for the company.”

While the firm has not categorically stated that it is delisting, the NSE, in a notice released last week, stated that it had removed the firm from its Corporate Governance Index

 following the company’s application to The Exchange to delist from the Daily Official List of The Exchange.

The firm may have decided to stay silent on the delisting, in order to rile the minority shareholders that opposed its planned restructuring.

The NSE also disclosed this week that full suspension had been placed on trading in the company’s shares effective December 31st 2018, following a request by its stockbroker, Chapel Hill Denham Securities Limited.

Resort Savings and Loans resumes trading 

On the flip side, Resort Savings and Loans Plc has resumed trading following the lifting of a full suspension placed on the firm for failing to submit its results as at when due.

Earlier in the week, the company had continued its release of a backlog of results, the most recent being for the 3rd quarter ended September 30, 2018.

The lifting of the suspension also brings the firm closer to a planned capital injection by private equity firm, Milost Global, whose previous transactions on the NSE have terminated abruptly.

Two others 

The NSE also removed NEM Insurance and Diamond Bank Plc from its corporate governance index.

African Alliance’s losses mount 

African Alliance Insurance Plc also released several overdue results, the most recent being for the nine months ended September 2018. The firm recorded a loss after tax of N4.7 billion, an indication that it could record a full year loss, for the second year running.

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MRS Oil relocates head office

In a notice sent to the NSE last week, MRS Oil Plc disclosed that  its board of directors has approved the relocation of the company’s head office from No. 8, Macarthy Street, Onikan, Lagos to No. 2, Tin Can Island, Apapa, Lagos.

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Notore makes board changes

Notore Chemical Industries Plc announced several board changes. Chief Odiloyi Lolomari retired from the board after serving for 11 years. Bernard Longe, and Geoffrey  Diedeu resigned from the board.

The company also announced replacements: Ovie Ukiri, Olusoji Adekunle Emiola, and Tseyi Louis Hammond respectively.

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A key board meeting

Guaranty Trust Bank stated that its board of directors would be meeting on the 30th of January, 2019 to consider its full year 2018 results. This could be an indication that its results would be released earlier than the prior year.

The bank will commence a closed trading in its shares. During this period, insiders with access to sensitive information cannot trade their shares.

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Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training.He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE).He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy.You can contact him via [email protected]

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Stock Market

Nestle Nigeria’s parent company to earn N32 billion in dividend from subsidiary

Nestlé S.A, the parent company of Nestlé Nigeria looks set to earn a mega dividend.

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The parent company of Nestlé Nigeria Plc, Nestlé S.A, is set to earn a whopping sum of N32 billion in dividend for the financial year ended December 2020.

The multinational food and drink processing conglomerate corporation, headquartered in Switzerland is the single majority shareholder of Nestlé Nigeria Plc, with 527,080,970 units of the total issued shares of its subsidiary.

This puts the ownership stake of the Swiss multinational at 66.5%, ahead of Stanbic IBTC Nominees Limited with 6.28% ownership stake.

Recall that the Board of Directors of Nestlé Nigeria in a statement released via the Nigerian Stock Exchange proposed a final dividend of N35.5 per share. This puts the total dividend payout of the company at N60.5 per share for the financial year 2020 (interim: N25.0).

When converted to dollars, the dividend amounts to about $78 million based on an exchange rate of N410/$1.

This proposal reflects the resilience of Nestlé despite the disruption occasioned by the pandemic. As the FMCG company was able to maintain its tradition of dividend payment to shareholders in 2020, despite taking a major shock in its profit during the year (-14%).

  • Nestlé delivered a consistent result in terms of revenue, amidst the ongoing COVID-19 pandemic which disrupted supply chains globally.
  • The revenue of the FMCG company increased by 1% in 2020 (N287 billion), compared to FY’19 figures (N284 billion).
  • However, the increase in the prices of materials, foreign exchange restrictions, and a spike in finance costs placed pressure on the company’s profitability in 2020.
  • At the back of these pressures, Nestlé’s PAT declined by 14% in 2020 (N39.2 billion) compared to FY’19 figures (N45.7 billion).

What you should know

Nestlé S.A is one of the largest food companies in the world in terms of revenue. The Switzerland-based consumer goods behemoth is the parent company of Nestlé Nigeria PLC – a leading food and beverage company in Africa.

Nestlé has grown its operation in Nigeria, as well as its presence in the Central and West Africa region over the years.
Its factory in Nigeria has grown from one – with the establishment of the Agbara Manufacturing Complex which commenced operation in 1981 – to three in recent times, following the inauguration of the Flowergate factory, a factory initially dedicated to the production of MAGGI products, and the set-up of the Abaji factory complex in 2016.

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Market Views

Bears take Nigerian stocks hostage, investors lose N82.4 billion

Investor sentiment as measured by the market breadth closed negative with 12 advancers and 47 decliners.

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Bears

Nigeria’s all-share index fell further at the close of trading today, down by -0.40% to 39,364.67 points. Investors losses today stood at N82.35 billion.

  • Year-to-date return and market capitalization settled at -2.26% and N20.5 trillion, respectively.
  • Investor sentiment as measured by the market breadth closed negative with 12 advancers and 47 decliners.
  • Across coverage sectors, the performance was bearish. The NSE insurance, banking, consumer goods, and oil & gas sectors dipped 4.04%, 1.54%, 1.47%, 64 basis points, and 0.65%, respectively.
  • The flip side saw only the industrials improved marginally by 0.19%.

Top gainers

  1. UPL up 9.91% to close at N1.22
  2. MORISON up 9.09% to close at N0.6
  3. CAP up 5.26% to close at N20
  4. WAPCO up 3.59% to close at N20.2
  5. LIVESTOCK up 3.17% to close at N2.28

Top losers

  1. FIDSON down 10.00% to close at N4.41
  2. NNFM down 9.97% to close at N6.32
  3. ENAMELWA down 9.95% to close at N19.9
  4. NEM down 9.95% to close at N1.72
  5. NCR down 9.91% to close at N3.09

Outlook

Nigerian stocks ended the fourth trading session on a weaker note amid soaring oil prices prevailing at the U.S trading session.

  • Today’s bearish trading session was inclined by sell pressure on consumer ticker, DANGSUGAR which lost -6.25%. JBERGER, ARDOVA, and UBA also declined by -7.88%, 9.85%, and -3.64%, respectively.
  • Nairametrics expects intending buyers to seek the advice of certified stockbrokers.

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