Three years ago, Primero Transport Services Limited was established and positioned to change the history of transportation in Nigeria. The company is a modern transportation outfit whose entry into the market was as forceful, as it was calculated. Just three years into the journey, a lot has already been accomplished. However, in an exclusive interview with Nairametrics, the company’s CEO, Mr. Fola Tinubu, revealed that there are still many more plans to be unveiled. Before we get into all that, let us first go back to how it all began.
The beginning of an era: Primero’s aim to revamp a megacity’s archaic road transport system
Just a few years ago, the sight of a blue BRT bus in Lagos would have been unusual. Back then, little effort was being made to change the system for the better, even as Lagosians bore the brunt of traffic issues. And then seemingly out of nowhere, the now well-known blue buses are all over Lagos, providing affordable and comfortable transport services to local commuters.
Primero was masterminded by Mr. Fola Tinubu, who founded the company and raised the investments needed to kick-start it. According to him, the vision for the company was born when, in early 2015, the Lagos State Government put out a Request for Proposals (RFP). Back then, the State Government was just completing the Ikorodu Road renovation project in conjunction with The World Bank. Therefore, proposals were sought from qualified and capable private investors who were interested in operating the Bus Rapid Transport scheme in the state.
From studying the RFP, Mr. Tinubu and his partners bought in to the government’s vision. Consequently, they submitted an expression of interest alongside a proposal. And at the end of the competitive bidding process that ensued, Primero emerged the winner.
Partnership with Sterling Bank Plc
One of the requirements set out by the Government was that whoever won the bid to run the blue BRT scheme must start out with a specified number of busses. In specific terms, the winner must have a total of 434 buses. Therefore, after Primero Transport Services Limited won the bidding process, it had to prepare for the Government’s inspection. And to do that, the company sought Sterling Bank’s help in order to obtain the credit facilities needed to purchase the buses. In his own words-
“We went to Sterling Bank, showed them what we were trying to do, and they supported us. Their support led to us being able to secure the buses from China. And the rest is history.”
Three years down the line, Primero is a force to reckon with
Today, any resident of Lagos who has ever commuted in a Primero bus can, indeed, attest to the fact that the company makes all the difference. The buses are neat, with air conditioning, comfortable sitting arrangements, in bus wi-fi, and very well-trained and meticulous drivers. And, most importantly, the service delivered by Primero is quite affordable.
In the course of preparing this report, Nairametrics visited (twice) the company’s main depot at Majidun in Ikorodu. The first visit was for a tour of the facility. It was around mid-day, the end of the early morning rush hour. We observed as the blue buses were being washed and prepared for the afternoon/evening rush hour. Here, all the ultra-modern equipment needed to maintain the buses was readily available.
We saw the automated washing machine which cleans the buses, and we were privy to see the mechanic workshop, alongside the auto mechanics, all of whom busied themselves fixing the possible defaults in the vehicles. There is even a filling station, which takes care of all the buses diesel needs.
We also toured the communications and control room, which is manned by young and vibrant Nigerians. Their jobs are to monitor the busses and address customers’ complaints (if any), in order to improve the overall quality of services rendered.
More than 400 buses currently in operation, and more to come
Needless to say, no transport company in Lagos has ever done it as well as Primero has. And this manifests in their numbers and expansion. Primero currently has fleet size of 434 buses, a number that is projected to rise to 800 by the end of 2019. According to the CEO, the company has submitted yet another proposal to the Lagos State Government, indicating interest to operate the Abule-Egba to Oshodi BRT lane which is currently under construction. If the bid is won, Primero will import an additional 350 buses.
Revenue is streaming in
In the meantime, the company is earning millions of naira on a monthly basis. Monthly income increased from an average of N50 million per month in 2015, to more than N600 million in 2017. The average income generated per month is currently estimated at N1 billion. These figures show an impressive growth trajectory. And there is still room to accomplish much more as the years go by.
But Fola Tinubu doesn’t take the credit for the recorded success
As the brainchild behind the company as well as the current CEO, one would expect Mr. Tinubu to take all the credit for Primero’s accomplishments. But he does not. Instead, in the course of our discussion, he kept referring to, “his incredible team members”, which is comprised of about 1,500 employees. According to Mr. Tinubu, they have contributed immensely to the company’s success. Without them, the project would be a failure, he added.
Yet, the truth remains that the man is the poster child of the company. After all, he is the Chief Executive Officer. And that is why we asked to know more about him.
Focus on the man behind the success story
Mr Tinubu was born and raised in Lagos, Nigeria in the mid-1960s. He recalled growing up as a teenager in the 1970s, when Nigeria’s economic prospect was vibrant due to the then recent discovery of crude oil in the country.
After early studies in Nigeria, he travelled to the United Kingdom where he obtained a BA in Economics and Politics from the University of East Anglia. He later graduated with an MBA from the University of Stirling.
Upon graduation, Mr. Fola worked for roughly eighteen years in the US mortgage industry; reaching top management positions. And now, he has brought home his excellent managerial and leadership experience, and channelled it into transforming the Lagos transportation system. Needless to say, he is doing an excellent job. When asked to talk about the best thing about being a CEO, Mr. Fola said the following –
“Everyone thinks being a CEO is glamorous. They don’t see the other side of it; that is the responsibilities that come with the role. With the position comes the responsibilities. It is like when you are young, you want to grow up quickly because you think you can have so much fun without being questioned. But you don’t realise that growing up comes with responsibilities.
“So, what’s the best thing about being CEO? I think for me it’s the ability to take tough decisions which sometimes can be the worst thing about the position. Also seeing your vision actualize, you can afford to dream about something and work hard until you actualize it.”
Back to primero, what are the company’s growth prospects?
Mr. Tinubu told us that Primero is currently focused on consolidating on the success that has been recorded in the past three years. According to him, the company’s dream is to have, at least, 2000 buses commuting one million Lagosians on a daily basis. By the end of 2020, the company is optimistic that this dream would be half-way accomplished. This is because as mentioned earlier, Primero is working to bring in an additional 350 new buses to operate the Abule-Egba to Oshodi BRT axis.
Therefore, on whether the company plans to expand beyond Lagos, it is a possibility that is largely dependent on its ability to first expand in Lagos. As the CEO emphasised, they are bullish on Lagos State. And it is not difficult to see why. After all, there are lots of opportunities inherent in the city of 24 million people, all of whom need comfortable and affordable means of transportation.
A potential joint venture partnership with Yutong to set up a bus assembling plant in Nigeria
In the meantime, Primero Transport Services Limited has been getting offers by people in Abuja and elsewhere, to operate similar BRT buses already existing in such places. Mr. Tinubu disclosed that there is an ongoing negotiation for Management Service Agreement with the Oyo State Government which would see the company managing the state’s Pacesetter’s bus company.
But overall, the focus remains on Lagos State. And as part of the growth plans for the State, the company is also working to offer specialised charter services-
“Charter Services – Primero Transport is currently working on a model that would provide specialised services both during the week and weekends. Due to the numerous enquiries for that service, the business has decided to invest in more buses so that the normal bus operations are not affected. As a result of a potential a Joint Venture Agreement with Yutong (the bus manufacturer), the new buses may not be imported, but rather assembled locally. A temporary plant in Epe would happen first and then a permanent plant would be built in the Badagry area of Lagos State. The assembled buses would cater for Primero Transport requirements, and be sold to other customers within Nigeria and West Africa.
“Primero is currently negotiating a Management Services Agreement with the Oyo State Government. Once signed, this transfers the management of over 150 buses from the government to Primero Transport Services Limited for an initial 12 months. The goal for Primero is to convert the Management Service into a full Franchise right, giving the business the opportunity to acquire more buses and operate them in Oyo state (as well as the interstate concessions that currently exists).”
Attention to investors: The Company plans to list on the Nigerian Stock Exchange soon
In view of the company’s expansion efforts, a potential listing on the Nigerian Stock Exchange could help to raise capital. And Mr. Tinubu seemed to agree. As a matter of fact, he laughed very excitedly when Nairametrics asked if such a plan is in the offing. And yes, there is such a plan, he said. According to him, they are in the process of raising a bond.
“Do we want to be quoted on the Nigerian Stock Market? Yes. We will be going to the Nigerian Stock Exchange probably by the end of next year. This is because the rule is that you need to have been in operation for four years before you can go to the market so that people will know your track-record and see what you’ve done and how you’ve done it. So, by the third quarter of 2019, we will be preparing to go to the market. And hopefully, by the first quarter of 2021, we will be quoted on the Nigerian Stock Exchange.”
Competition is not a problem for Primero
On competition, the CEO said there is room enough for all to play. As mentioned earlier, Lagos State has an estimated population of 24 million people. At least, half of these people move from one location to the other on a daily basis. And they also need affordable and comfortable means of transportation. Moreover, the Lagos State Government has a strategic plan to establish fourteen BRT corridors across the state. At the moment, there is only one that is currently operational. Thirteen more are still on the way. So, there is room for everyone to operate.
Primero Transport Services Limited is changing the transportation paradigm in Nigeria. What they are doing and the scale at which they are doing it, has never been done before in the country. Of course, it hasn’t been smooth sailing all along. There have been challenges, as Mr Tinubu admitted. But despite all, the company is poised to accomplish more feats in the coming years. And Nairametrics will be here to share the good news as they unfold.
Access Bank Plc reports profit of N40.9 billion for Q1 2020
Access Bank Plc recorded a profit after tax of N40.9 billion in the first quarter period ended March 31st, 2020, according to the company’s latest earnings report which was released earlier this afternoon.
Access Bank Plc recorded a profit after tax of N40.9 billion in the first quarter period ended March 31st, 2020. This is according to the company’s financial statement for Q1 2020, which was released earlier this afternoon. Other key details about the company’s Q1 financial performance can be seen below.
Net Interest Income: Access Bank’s net interest income for the period under review stood at N72.2 billion. This indicates a 27% increase compared to N56.8 billion that was recorded in Q1 2019.
Personnel and Operating Expenses: In Q1 2020, the tier-1 bank incurred a total cost of N19.6 billion in personnel expenses. This shows a 53.5% jump compared to N12.8 billion in Q1 2019. In the same vein, other operating expenses also jumped sharply to N63.5 billion, marking a 69.8% increase when compared to N37.4 in Q1 2019.
Profit before tax & profit after tax: Access Bank’s profit before tax for Q1 2020 stood at N46.2 billion. This is 2.6% more than N45.1 billion reported in Q1 2019. On the other hand, profit after tax decreased slightly by 0.53% to N40.9, down from N41.1 billion.
Note that Access Bank’s earnings per share (basic) for the period decreased to 121 kobo as against 139 kobo. Diluted earnings per share also decreased to 119 kobo in Q1 2020 as against 137 kobo in Q1 2019.
You may download the full report right here.
SumoBank rebrands to SumoTrust, introduces bank account numbers
An online savings platform, SumoBank has rebranded as it metamorphosed to SumoTrust to continue the race of digital savings App in Nigeria.
The firm, launched its operation as a digital savings and investment platform, has grown from 0 to serving about 4000 customers.
An online savings platform, SumoBank has rebranded as it metamorphosed to SumoTrust to continue the race of digital savings App in Nigeria.
The firm launched its operation as digital savings and investment platform, and has grown from 0 to serving about 4000 customers.
The development was announced on the Sumobank blog on the 27th of December 2019 by the Chief Executive Officer, Igwe Chrisent.
“In 6 months, we have grown from 0 to serving almost 4000 customers and to serve you better; we decided to carry out a product-service survey which will help us to do more.
“Based on the feedback we got from our ‘Esteemed users’ on our Product and service survey; we’re happy to announce that our vision just got bigger and we’ve set out to give you the very best of platform for Savings, Investment, learning and more.
“Because our vision got broader and clearer, it is important to know that having ‘Bank’ attached to our name will not serve the product updates which will be effected in the coming months/years, so we decided to pick a new name.”
Highlights of rebranding: The Change of name from SumoBank to SumoTrust also came with some updates on the SumoTrust savings App which include:
- Addition of NUBAN ACCOUNT numbers which allow users to have their unique bank account numbers for transactions (deposits) in their SumoTrust account.
- Group Saving feature which allows users to go on a savings mission with a group of friends, family, associations, challenges, etc to reach a savings goal. See image below:
- The article also mentioned that their Learn feature (Motute) which will enable you to teach or learn anything from anywhere in the world will be ready and announced in a few months and will be released on Entrepreneur Platform. This means the Sumotrust’s partnership with Entrepreneur Platform will enable you to access the company’s course for free and get third party course at a discounted rate.
From this, it is clear Sumobank (SumoTrust) is preparing to become another big company to come out of Nigeria or there’s something else we don’t know yet, whichever it is, Both names sound alike and non will be forgotten easily since they are all ‘Sumo’.
Cornerstone Insurance in consolidation talk with two underwriting firms
Cornerstone Insurance Plc is planning to consolidate with some insurance companies ahead of the recapitalization deadline set by NAICOM.
Cornerstone Insurance Plc is in merger talks with some insurance companies ahead of the recapitalization deadline set by the National Insurance Commission (NAICOM) for the insurance sector.
The move is to strengthen its capital base. The Group Managing director of the company, Ganiyu Musa, said consolidation with other market players was more efficient compared to just seeking fundraising.
Although Musa didn’t reveal the names of the insurance companies negotiating with Cornerstone Insurance, he said consolidation would place the firm in a stronger position, boost expertise, improve technical capacity and even strengthen the capital base of Cornerstone Insurance.
While the consolidation is expected to aid the company’s recapitalization process, Musa said the Cornerstone Insurance had already met the recapitalization request by NAICOM.
According to him, the company has exceeded the N18 billion new minimum capital required by the insurance market regulator. Musa said the sale of its property and head office boosted the liquidity of the company, placing its finances in a better footing.
“The sale of our new property along Lekki axis has further increased the liquidity of the company to meet and surpass expectations. The company would have loved to keep the property for the long run, but we were challenged with the fact that real estate investment is not admissible in the ongoing recapitalisation.
“This necessitated the sale of the building for a handsome amount that covers the cost of the building project and still left with profit. At present, we are in a stronger financial position to scale through the exercise as our balance sheet is stronger and healthy,” he said.
He added that, “The company came out from its loss position of N1.7 billion in 2017 to N1.8 billion profit in 2018, even as the 2019 profit outlook is showing sign of higher profit from that of the previous year, judging from its 2019 third-quarter report.”
While the insurance companies don’t have a choice but meet the deadline through fundraising and consolidation, the chairman of Mutual Benefit Assurance, Akin Ogunbiyi, said the company was against the planned recapitalisation scheme by NAICOM.
The company has said it could survive the wave of the recapitalisation, it said its concern was for other players who might become victims to the plan. Mutual Benefit also condemned the handling of foreign acquisitions in the Nigerian market.