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Company Profile: How profitable is Cutix Plc considering its dominance?

It is in this regard that Cutix Plc has been playing a major role over the past three decades, manufacturing and distributing assorted, quality cables used in the conduct of electricity across the country.

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Cutix Plc, dividend

The importance of stable electricity in the quest for economic development can never be overstated. Unfortunately, many factors (mainly infrastructural inadequacies) have continually militated against the actualisation of stable electricity in Nigeria. It is in this regard that Cutix Plc has been playing a major role over the past three decades, manufacturing and distributing assorted, quality cables used in the conduct of electricity across the country.

For our company focus this, we shall be focusing on this Nigerian company. Let’s take you through everything you need to know about Cutix Plc’s effort to redefine the cable industry. We shall also be examining the company’s business model, products, target market, ownership structure, investment prospects, and most important the financials.

About the company

Incorporated in 1982, Cutix Plc is an Nnewi-based cable manufacturing company which was established in 1982. The company manufactures and distributes various kinds of cables such as electrical wires, telecommunication wires, to automobile wires. Some typical examples of the company’s wide range of products are insulated copper conductors, PVC insulated, and sheathed flat twin/three-core copper cables. Others are low tension bare aluminium conductors and reinforced aluminium conductor steel wires.

Cutix Plc also manufactures bare stranded copper conductors as well as bare copper conductors which are used for earthing electrical installations and the production of copper cables.

[READ: FOCUS: The drum business has failed Greif Nigeria Plc in 2018]

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The company’s incorporation and NSE-listing

Cutix Plc is the brainchild of Dr Ajulu Uzodike who resigned from a well-salaried job at Raychem Corporation in 1981, to establish one of the foremost wire manufacturing companies in Nigeria. In the early days of the company, he used Adtec Limited (a venture capital firm he also founded) to kick-start some of the initial projects.

According to information available on the company’s website, Cutix Plc started operations with a startup capital of about N400,000 which was collectively raised by the founder and eighteen others; consisting of his friends and his family members.

Cutix Plc

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The company was initially incorporated on November 4th, 1982 as a private limited company before it transformed into a publicly-owned company. Its shares were then listed on the Nigerian Stock Exchange’s main board on December 8, 1987. Cutix Plc currently has a market capitalisation of N2,906,181,342.90. 

[READ THIS: Focus on Notore Chemical Industries Plc’s commitment to Africa’s food security]

Following Cutix’s listing on the NSE, which made it the first Eastern Nigeria-based company to do so, it was able to raise the necessary capital to facilitate its expansion drives. Consequently, the company built its own factory/several cable production lines, installed and commissioned more machines, and obtained more licenses from the authorities. 

The company’s ownership structure

About 60.38% of the company’s shares are currently held by the investing public. The remaining 39.62% shares are split thus:

  •         Uzodike Gilbert Obiajulu: 90,172,226 units, holding (10.24%).
  •         R.C Onyeje And Company (Nig) Ltd: 55,416,000 units holding (6.29%).
  •         Nsoedo Samuel: 54,333,333 units holding (6.17%).
  •         Nigerian Reinsurance Corporation: 53,333,333 units holding (6.06%).
  •         Nzewi Christopher Emengini: 50,571,310 units holding (5.74%).
  •         AMI Nigeria Limited: 45,093,991 units holding (5.12%).

The company’s founder and other top executives

Dr Gilbert Obiajulu Uzodike is the Founder of Cutix Plc. Born in 1949 in Onitsha, he studied for his primary and secondary school education in Eastern Nigeria before proceeding to the University of Lagos where he obtained a B.Sc. Mech. Engineering in 1974. He then proceeded to Harvard Business School, where he obtained an MBA in 1977.

He has founded and managed several companies asides Cutix Plc, following his successful career as an employee business executive. These companies include cosmetics manufacturing company Ugora Limited, Raychem Adtec Limited, Adswitch Plc etc.

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He currently sits on the board of quite a number of establishments, including his position on the Board of Trustees of the Anambra State Security Trust Fund.

Other notable executives/board members of the company are-

  1. Mrs Uche C. Igbokwe (CEO)
  2. AMB. Okwudili Nwosu (Chairman)
  3. Mr. Nnamdi Ike (Non-Executive Director)
  4. Mr. Mathias Umego (Independent Non-Executive Director)

[READ FURTHER: Focus on this small-cap company and its very ‘salty’ business]

The company’s target market

Cutix Plc targets everyone, particularly real estate developers, governments, electricity companies, private companies, and anyone else who deals in the construction of residential and office buildings. It also targets telecommunications companies like MTN and 9mobile, who make use of telecommunication wires such as those manufactured by the company.

But the company faces competition

Cutix Plc faces competition from various quarters, including those posed by other cable manufacturers in Nigeria such as Coleman Technical Industries Limited which, though not listed on the Nigerian bourse, is still one of the biggest names in the sector. Other competitors are Sinitor & Co Nigeria Limited, Emarvel Electrical Cables, Berliac Engineering Cables Limited, and Vecan Cable Limited, etc.

Note that out of all the cable manufacturing companies in Nigeria, Cutix Plc is the only one whose shares are publicly traded on the Nigerian Stock Exchange.

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Focus on the company’s financial performance

The company’s unaudited third quarter 2019 result shows that it earned a total revenue of N4.1 billion as against N5 billion worth of revenue earned during the comparable period in 2018. Unaudited profit for Q3 2019 stood at N300 million as against N440 million in Q3 2018.

Over the past five years (i.e., between 2014 and 2018) Cutix Plc’s revenue has been on a steady rise. The company reported N2,234,959,000 for the year ended April 2014. By the end of FY 2015, revenue had increased to N2,358,412,000. The rise is similar to 2016, with N2,835,863,000. By 2017, total revenue had reached N3,675,712,000 and in 

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[READ: Is Nestle Nigeria’s recently-launched seasoning brand even necessary?]

Similarly, Cutix Plc performed relatively well in terms of profits. The company recorded a profit after tax of N207,116,000 in 2014. However, profit decreased to N149,209,000 in 2015, only to increase yet again to N190,551,000 in 2016, N257,498,000 in 2017, and N440, 295 in 2018.

In conclusion, Cutix Plc is doing okay, although it can do better. This is a truth that even the management of the company acknowledges. This explains why they are making serious plans for the future by developing “a new power plant, where power cable of all sizes in low voltage varieties of PVC, PE and XLPE will be produced.” It is expected that this move will, among other things, build capacity, while ensuring that they reach newer markets even as they, in turn, make profits.

Image depicting assorted cables manufactured by Cutix Plc

Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs. He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor. Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan. If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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Company Profile

NPF Microfinance Bank: Providing ‘friendly’ financial services for almost 3 decades

NPF microfinance bank has shown resilience over the years, and this is reflected in its consistent positive performance.

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NPF Microfinance Bank: Providing 'friendly' financial services for almost 3 decades

The Police is your friend is a cliché many are familiar with, but most do not know that this friendship extends to financial services. Incorporated as a community bank in 1993, with License No. FC 00200, the Nigerian Police Force (NPF) Microfinance bank has been providing banking services to the Nigerian banking public for almost three decades.  

However, it is one of those stocks that hardly make the headlines, except for landmark events. This friendly microfinance bank is the pick for Nairametrics corporate profile this week.  

READ: CBN releases new capital base, sanctions for Microfinance Banks in new draft guidelines

Incorporation  

NPF Microfinance Bank Plc (Formerly NPF Community Bank Ltd), was incorporated on 19th May, 1993, to provide services such as retail banking, loans and advances, and other allied services to both serving and retired officers and men of Nigeria Police Force, its ancillary institutions, and later on, the general banking public.  

The Bank mission says it is targeted at providing banking and other permissible financial services to poor and low-income households and micro enterprises, with emphasis on members of the NPF Community. 

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It commenced operations on 20th August, 1993 with a single branch in Ikoyi, having obtained a CBN provisional license to operate as a community bank. The bank obtained its full license to operate as a Community Bank on 24th January 2002. Five years later, it converted from its Community Bank status to a Microfinance Bank, following CBN directive which allowed it to open branches in all the states. It was registered as a Public Limited Company on 13 July, 2006, and received an approval-in-principle to operate as a Microfinance Bank on 10 May 2007. 

NPF microfinance bank obtained the final license on December 4, 2007, but its stocks did not get listed on the main board of the NSE, until December 2010, after 17 years of operations. 

READ: Strong performance from Stanbic IBTC, despite weak retail banking position

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Its stock price is considered quite stable, trading within a narrow band, with its price-earnings ratio estimated to be about 9.45 times earningsslightly higher than the 9.3 times earnings, which is the average PE ratio on the NSE. 

The bank’s authorized capital at inception was N500,000.00, made up of 500,000 ordinary shares of N1.00 each. This has grown over the years to its current level of N2 billion, made up of N4 billion ordinary shares of 50k each, of which 2,286,637,766 ordinary shares of 50k eachare issued and fully paid up. 

At a share price of N1.22, the current Market Cap is put at N2.789 billion.  

Branch network has increased to about 35 branches across several states in the country. In August 2019, the bank reaffirmed an earlier decision to embark on another public offer to raise funds for the purpose of incorporating Information Technology to meet customers needs and branch improvement, and to fund a three-year strategy from 2019 to 2021. 

READ: UBA Plc H1’2020 results, a true reflection of its rightsizing decision? 

Management  

Mr. Akinwunmi M. Lawal has been Managing Director since June 2014, while the Board of Directors has been chaired by Azubuko Joel Udah (Esq.) since 2015. 

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Mr. John Kwabe Tizhe and Mr. Francis C. Nelson are Executive Directors; while Mr. Usman Isa Baba, Mr Aminu Saleh PaiMr Jibrin G. Gane, Mr. Salihu Argungu Hashimu, Mr. Abdulrahman SatumariMr. Dasuki Danbappa GaladanchiMrs. Rakiya Edota Shehu, and Mr. Mohammed D. Saeed are Non-Executive Directors. 

Recent financials 

Although the NPF microfinance bank may not boast of a large customer base like most of the popular commercial and microfinance banks in the country, the bank has consistently shown favorable financials over the decades. The bank stocks is highly illiquid, but it has consistently and successfully paid dividends for the last 21 years, paying as much as N114.3 million in dividends for 2018.  

The audited results for FY 2018, shows a N300 million growth in gross earnings from N3.6 billion in 2017 to N3.9 billion in 2018, while there was a decline in profitThis decline is partly traceable to the 128.6% increase in marketing expenses from N63 million in 2017 to N144 million in 2018, while Directors’ remuneration rose 63%, from N65 million in 2017 to N106 million in 2018. 

READ: Access Bank posts Profit Before Tax of N74.31 billion in H1 2020

Profit before tax fell sharply from N819 million in 2017 to N287 million in 2018, and Profit after tax also dropped from N631 million in 2017 to N195 million in 2018.  For 2019, the Profit Before tax shot up to over N1 billion, while Profit after tax grew to N796.4 million.  

Within the 2018 financial year, customer deposit grew by 14.67% from N9.126 billion to N10.465 billion, while total asset increased from N15.952 billion in 2017 to N17.597 billion in 2018. In comparison, 2019 customer deposits grew further to N11.32 billion, and total assets increased further to N19.58 billion.  

The bank attributed the poor performance in 2018 to the adoption of the IFRS 9, which caused a rise in net impairments, a N700 million growth in operating expenses, as well as a N266.48 million fraud committed by one of its middle management staff in the Sokoto branch. Although N35 million was recovered of the sum, shareholders bore the brunt of the loss, as dividend per share dropped from 17 kobo in 2017 to 5 kobo in 2018.  

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READ: Transcorp Hotels to raise N10billion through Rights Issue 

Whatever steps the company took to prevent a repeat of frauds, it was not effective; because 2019 saw an increase in frauds committed by members of its staff. The bank recorded frauds amounting to N2.1 million in four separate incidences, and another N12.26 million ATM electronic fraud. Though some of the money was recovered, over N12 million remained unrecovered at the end of the financial year.   

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Conclusion 

NPF microfinance bank has shown resilience over the years, and this is reflected in its consistent positive performance. However, it will have to work more on tightening lose ends to prevent cases of fraud and forgeries, which dips into its yearly profits and takes a chunk from shareholders dividends. 

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Company Profile

Julius Berger to diversify into Agro-processing industry

Julius Berger has resolved to diversify into Agro-processing in its quest for more rigor in its operations.

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Expatriates, Julius Berger to diversify into Agro-processing industry

The Board of Julius Berger has approved a diversification opportunity for the company in Agro-processing, at the board meeting held on Tuesday, September 22, 2020.

The company made this known in an Adhoc announcement sent to the Nigerian Stock Exchange (NSE), the investing public, and other stakeholders in the Capital market. The Adhoc announcement, which is dated 23rd, September 2020, was signed by the Company’s Secretary, C.E. Madueke.

Explore the Nairametrics Research Website for Economic and Financial Data

Nairametrics found that the board’s decision to seek out opportunities in the Agro-processing industry, is based on its quest for more operational rigor, given the widespread economic vulnerabilities in the country, and also the resultant reforms by the Government.

READ: Julius Berger’s latest earnings report shows 56.1% profit growth in 9 months 

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The board reiterated that Julius Berger’s business is centered around a long-term strategy, and the board is keen to deliver on that strategy, by maintaining and strengthening the Company’s competitive advantages in the Construction sector, and Capital market.

(READ MORE: Julius Berger Nigeria Plc announces N2 dividend payout to shareholders)

The Board of Directors and the Executive Management of Julius Berger, strongly believe that this diversification direction would support the continued success of the Group in the future, and align with the government’s strategic objectives to stimulate value creation in Nigeria.

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Back-story: It is important to note that, in November 2019, Nairametrics reported that Julius Berger announced its diversification into the oil and gas industry, with the acquisition of a 20% equity stake in Petralon Energy Limited.

READ: Can Berger Paints increase market dominance by reducing prices?

The Board stated that the investment is in line with the strategic goals of Julius Berger on diversification, and would enable the acquisition of know-how and experience in the oil and gas sector.

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Company Profile

Jaiz Bank: First shared-profit bank in Nigeria approaches 10 years

Nigeria’s first non-interest bank has moved from being a regional bank to a national bank.

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Jaiz Bank Plc, First shared profit bank in Nigeria approaches 10 years

When the idea of a Non-interest banking was first broached in Nigeria in the late 90s, it was greeted with suspicion. This was probably because its more popular name ‘Islamic banking’ had non-muslim Nigerians thinking it was a ploy to eventually Islamize the country.

Two decades and several sensitization campaigns later, Nigeria’s first non-interest bank has moved from being a regional bank to a national bank, with several branches and customers.

Nairametrics company profile this week looks at this trail-blazing bank; how it has survived its first decade, while operating a system that is completely different from that of other banks in the country, yet still holds its own in the industry.

READ: UBA Plc H1’2020 results, a true reflection of its rightsizing decision? 

History

The JAIZ movement in Nigeria dates far back to 2001, when Justice Imam Muhammad Taqi Usmani and Sanusi Lamido Sanusi, both guest speakers at a seminar hosted in Sheraton Hotel Abuja, advised the different groups clamoring for a non-interest bank in Nigeria to come together under one group, if their aim was to be achieved.

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In response to this advice, the Halal group and the JAIZ group united, combining influence and resources to drive for the establishment of a Nigerian non-interest bank.

Jaiz International was set up in 2003, and after almost 8 years of trying to meet the guidelines, and capital requirements of the Apex bank (amid the Soludo-led recapitalization exercise which shook the industry) and other factors, the bank received a regional license from CBN on a historic date.

JAIZ International Plc was established on 11th of November 2011, and began the long walk to the actualization of their dreams.

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(READ MORE: Jaiz Bank reports 45.3% profit increase in H1 2020, involved in 21 litigations)

On 6 January 2012, operations commenced at the branches in Abuja, Kaduna and Kano. Hassan Usman, is now Managing Director of the bank, while Alhaji Dr Umaru Abdul Mutallab, heads the Board of Directors, with Alhaji Dr Umaru Kwairanga, and Alhaji Dr Muhammadu Indimi as members.

Other members include Abdulfattah O. Amoo; Alh. (Dr.) Aminu Alhassan Dantata; Alh. (Dr.) Musbahu Bashir; Alh. Mukhtar Danladi Hanga; Alhaji Mamun Maude; H.R.H. Engr. Bello Muhammad Sanni; Mahe Abubakar Mahmud; Mall. Falalu Bello; Mall. Hassan Usman; Mr. Seedy Njie; Nafiu Baba-Ahmed; and Prof. Tajudeen Adepemi Adebiyi.

In 2013, when the bank started expanding to other urban centers, it was permitted to increase shareholding capital to $92.3 million (NGN14.3 billion), and subsequently applied for a national banking license which it received in 2016. At the end of FY 2019, it had 38 branches with over a thousand employees.

Stockholding was and is still shared among Nigerian and foreign individuals, and institutional investors, while the number of issued shares as at December 2019 was 29.46 billion.

READ MORE: Diamond Bank rebounds after hitting 5 year low

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Banking with a human face

Non-interest banking is touted to be a more ethical form of banking, with less emphasis on profit, and more on societal and individual development.

Like other banks, Jaiz Bank Plc provides banking products and services like savings, current, salary, and kids savings accounts, but with slightly different terms. The bank also provides online banking, leasing, cards, bonds and guarantees, and several other investment products tailored to its principles. Customers’ deposits are used for business operations, with the understanding that the profit will be shared between the bank and customers. While sharing profit with customers, in the event of a loss, the bank tries to weather it out, since the customers’ deposits are already insured with the NDIC.

In offering its credit facilities, the bank tends to adopt a religious perspective, looking beyond an individual’s ability to repay the loan. The impact of such a business or project on the society is a priority consideration, and could be the sole reason for refusing a loan. In this regard, business ideas which go against morality or societal growth, are not given loans.

READ: Dangote Sugar Refinery: Revenue soars amid rising cost of sales

The bank also offers its loans in a manner that creates a partnership between the bank and the borrower, towards improving the society. A profit for the company is a profit for the bank, while a loss for the company is also a loss for the bank, even though steps are taken to recover the capital.

How many people will be employed by the business? How will it impact the environment and the economy? These are some of the questions considered before a loan is either granted or refused. This is why bankers in the space like to refer to it as “banking with a face” or ethical banking.

(READ MORE: Jaiz Bank Plc appoints new directors)

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No matter how profitable a venture is, if any part of its operations is considered detrimental to societal welfare, it will be declined. If, for any reason, a customer is to be penalized for default, the proceeds cannot be listed as part of profits for the bank, but is ploughed into the society as charity.

Financials

Audited financials from the company shows that the company is fast growing to make up for the early years of little or no profit.

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The FY 2019 audited reports show that the company declared dividends of 3 kobo per share, an improvement on previous years’ performances, where no dividend was declared. Total assets grew 54% YOY, from N108.4 billion in 2019 to N167 billion in 2019, while deposits rose 50% to N127 billion, from the N85 billion recorded in 2018.

READ: Why Ripple might be the future of digital payments

Gross earnings grew from N8.7 billion to N14.7 billion, and Cost to Income ratio improved from 87.28% in 2018 to 80.21% in 2019, with return on assets and equity rising to 1.26% and 13.57% respectively.

Profit before tax shot up 135% from 898 million in 2018 to N2.1 billion in 2019, and earning per share grew to 8.29 kobo from 2.83 kobo in 2018.

The recently reported Q2 2020 unaudited reports show that in spite of the COVID-19 challenges in the country, the bank had a fair outing in the second quarter of the year, with a clear improvement across all indicators in comparison to Q2 2019.

(READ MORE: CBN allows banks to pay winnings, salaries for 7 banned betting & gaming companies)

Conclusion

JAIZ Bank Plc is fast-growing, achieving much in good time, although Nigerians are yet to fully understand this system of banking. There is also the supervision of the Advisory Committee of Experts (ACE), which ensures that banking operations are done in line with the dictates of Sharia law.

The bank includes non-Islamic employees in its workforce, a point to back the claims that it is not religiously inclined, though more needs to be done in its board composition to fully corroborate this, and show the public that it is a bank that accommodates all religions.

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