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CORPORATE ACTIONS: ‘Deap’ Changes and Sweet Tales

@mtnng and @zenithbank amongst other firms will hold board meetings this week to consider H1 2019 results

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Corporate Actions

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

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

Here is a review of corporate actions that took place last week, and those expected this week. 

Corporate Actions from last week 

Markdowns  

C and I Leasing Plc was marked down by 7.5 kobo last week. Ex dividend price was N5.45 

Red Star Express Plc was marked down by 43 kobo. Ex dividend price was N5.28. 

A mark down means that a proposed dividend is subtracted from a company’s share price.  

Sins forgiven  

Following the release of its results, a technical suspension placed on LASACO Assurance Plc was lifted. 

 A full suspension placed on Continental Reinsurance was lifted, as the firm will hold another court ordered meeting. The suspension was placed in December last year at the instance of the company’s broker, Chapel Hill Denham Securities. The Securities and Exchange Commission had cancelled the previous meeting following a few irregularities.  

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Appointments and Resignations  

May and Baker Plc announced the appointment of Senator Daisy Danjuma as a Non Executive Director. The appointment was part of the resolutions following the AGM, which was held in May. No word on if she would serve as alternate director to her husband, TY Danjuma, or both of them will serve on the board. 

 Meyer Plc has appointed Rotimi Alashe as the Chief Financial Officer, effective 1st of July, 2019. 

Transcorp Hotels Plc announced the appointment of Alexander Adeyemi as a non Executive Director effective 15th of July, 2019. Dr Wadinga Bakari also retired from the board effective same date. 

Major moves  

Fidson Healthcare Plc announced a strategic alliance with Ohara Pharmaceutical Co. Ltd, a Japanese Healthcare company. Following Fidson’s recent rights issue, Ohara’s shareholding in the company has increased to 21.75%. 

Shareholders of Abbey Mortgage Bank have given the company’s board of directors approval to issue 2,261,538,462 ordinary shares at the rate of N1.05 to VFD Group Plc. The private placement is however subject to regulatory approval. Following the announcement, the bank’s shares were on full bid and the stock was one of the best performing last week.  

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A buy in  

Royal Exchange Plc announced that InsurResilience Investment Fund had acquired a 39.25% stake in Royal Exchange General Insurance Limited. InsurResilience was set up by Kfw on behalf of the German government and is managed by BlueOrchard Finance, a Swiss-based impact investment manager. 

A merger in the works  

Lafarge Africa Plc’s Facts Behind the Figures session, which was to hold on Thursday, was postponed. The company’s Extraordinary General Meeting (EGM) is also scheduled to hold on Monday July 22, 2019. The firm will seek approval from shareholders for the merger of Lafarge Ready Mix Plc with Lafarge Africa Plc 

Numbers on the way  

Seplat Petroleum Development Company will release its H1 2019 results on July 30, 2019, and hold a conference call immediately after.  

Omatek Ventures Plc held  a board meeting on the 18th of July, 2019, at the Muson Centre, Onikan, Lagos.  

The board has approved the company’s audited financial statements for the year ended 31st December, 2017 and 31st December, 2018.  

Cutix Plc and Unilever Plc have indicated their intentions to release H1 2019 results on or before the 28th and 29th of July 2019 respectively. 

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Results released  

United Capital H1 2019  

United Capital released its half year results for the 2018 financial year. Gross earnings declined slightly by 15.7% from N3.8 billion in 2018 to N3.2 billion in 2019. 

Profit before tax fell from N2.3 billion in 2018 to N1.9 billion in 2019, down 17.3% year on year. Profit after tax also dropped from N2 billion in 2018, to N1.6 billion in 2019, down 20%.  

Earnings per share also fell by 17.6% from 34 kobo in 2018 to 28 kobo in 2019.  

Africa Prudential H1 2019  

Africa Prudential Plc released its results for the half year ended June 2019. Gross earnings fell by 4.7% from N2.1 billion in 2018 to N2 billion in 2019.  

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Profit before tax rose slightly from N1.1 billion in 2018 to N1.2 billion in 2019. This was largely due a sharp fall in finance costs, which fell by 76.3% from N427 million in 2018 to N101 million in 2019.  

Profit after tax also rose marginally by 4.3% from N985 million in 2018 to N1 billion in 2019.  

Earnings per share rose marginally by 4% from 49 kobo in 2018 to 51 kobo in 2019. For most investors, that’s the koko of the matter. Financial service firms have had it a bit tough this year.  

Transcorp Plc H1 2019  

Transcorp Plc released its results for the half year ended June 2019. 

Revenue fell from N54 billion in 2018 to N37.7 billion in 2019, down 30.1% year on year. Profit before tax dropped sharply by 57.9% from N11.9 billion in 2018 to N5 billion in 2019. Profit after tax also declined from N10.8 billion in 2018 to N4.6 billion in 2019.  

Sweet tales at Cadbury  

Cadbury Nigeria H1 2019 Cadbury Nigeria Plc released its results for the 2018 financial year. Revenue increased by 11% from N17.5 billion in 2018 to N19.4 billion in 2019. The firm made a N957 million profit in 2019, as against a N423 million loss before tax recorded in 2018. Profit after tax stood at N669 million in 2019, as against a N423 million loss after tax in 2019. 

 ‘Deap’ changes 

Deap Capital Management and Trust Plc released its overdue results after trading hours on Friday. The firm has just completed a 5year suspension from the capital market and is repositioning to resume normal operations. 

Under the special items contained in its AGM notice, are the following resolutions:  

  • That the directors be authorized to convert N1.6 billion owed to creditors of the company into 1.5 billion ordinary shares.  
  • That the name of the company be changed from Deap Capital Management and Trust Plc to Deap Plc.  
  • The firm also intends to sign a 5year agreement with Collaboration and Consulting Company (management consultants) to undertake the turn-around of the firm.  
  • The duration of the proposed agreement will be from October 2019 to September 2024.  

The AGM is scheduled for the 22nd of August, 2019.  

The company also announced a series of board changes, following a board meeting held on the 7th of June, 2019.  

  • Mr Joe Idudu and Mr Emmanuel Ugboh re-joined the board after a 5-year suspension placed on the firm came to an end on the 27th of March, 2019. 
  •  Dr. Kenneth Olise, Edmond Ani, and Joel Omole were appointed to the board as part of the turnaround team that had made a proposal to the board to manage the firm for 5 years. 
  • Elder Williams Odudu resigned from the board, due to the new structure which comprises 2 persons from the current board, 2 from the old board which was suspended by SEC, and 3 from the turnaround team.  

 Corporate Actions taking place this week  

AGMs and a Court Ordered Meeting  

A number of firms will be holding their Annual General Meetings this week. 

 Ikeja Hotels will be holding its AGM on the 22nd of July, 2019. Lafarge Africa has a Court Ordered Meeting on the same date. 

 Presco Plc will hold its AGM on the 24th of July, 2019.  

CCNN, Studio Press Nigeria, Sovereign Trust Insurance and NPF Microfinance Bank will hold their Annual General Meetings on the 25th of July, 2019. 

Nigerian Aviation Handling Company Plc and John Holt Plc, will hold their Annual General Meetings on the 26th of July, 2019.  

Board meetings  

A number of firms will also hold board meetings to consider their H1 2019 results and other matters.  

MTN Nigeria, LASACO Assurance Plc, Chemical and Allied Products (CAP) Plc and Royal Exchange Plc will hold board meetings on the 24th of July.  

Regency Alliance Plc and AXA Mansard Insurance Plc will hold a board meeting on the 25th of July.  

Access Bank Plc,  Nestle Nigeria Plc, Dangote Cement Plc and The Initiates Plc  will hold board meetingon the 26th of July 2019.  

The Initiates and UPDC will hold board meetings to consider H1 2019 results. For UPDC, the results could be released shortly after the meeting. 

 SEC vs JAT and Mofe continues  

Further hearing on the suit between the Securities and Exchange Commission (SEC) and the duo of Wale Tinubu and Mofe Boyo continues this week. 

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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Business

Lagos eases restrictions on social, event centres, sets new occupancy limit

The state government has pegged the occupancy limit for event centres in Lagos to 500 people while social events can now have 200 people at a time.

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The Lagos state government has further eased restrictions on social and event centres in the state. This follows due consultations and deliberations between the Lagos State Governor, Babajide Sanow-Olu, and relevant stakeholders and MDAs.

The state government has pegged the occupancy limit for event centres in Lagos to 500 people while social events can now have 200 people at a time.

This disclosure is contained in a statement by the Lagos State Commissioner for Tourism, Arts and Culture, Uzamat Yusuff, and the Director-General of the Lagos State Safety Commission, Mr Lanre Mojola, on Friday, April 9, 2021.

The statement noted that safety marshals will be deployed to any social event with over 200 people and event centre exceeding the 500 limits.

The statement partly reads, “All event centres must hold a valid license of The Lagos State Ministry of Tourism, Arts and Culture prior to operating as an event centre in the State.

“All event centres must be duly registered and verified on The Lagos State Safety Commission website www.lasgsafetyreg.com prior to holding any event.

An Event Safety Clearance must be obtained from the Lagos State Safety Commission through the website www.lasgsafetyreg.com for any proposed event or exhibition.

Safety Marshals shall be deployed by an accredited event safety consultant from Lagos State Safety Commission for every social event with attendance exceeding over 200 people.

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Occupancy limit at any event must not exceed 50% of the maximum design capacity of the hall, wherein Occupancy Limit stickers provided by the Lagos State Safety Commission must be boldly posted at the entrance of the event hall.

Maximum allowable capacity for event centres irrespective of the occupancy limit is 500 people. Deep cleaning must be carried out before and after every event. Physical distancing shall be maintained between seated guests and a maximum number of seated guests should be 6 (six) people on a table of 10 persons.

Event duration should not exceed a maximum period of 6-hours. All guests and service providers at the facility must wear a nose mask and make use of hand sanitisers All guests and service providers must endeavour to wash their hands before entering the venue or in the alternative use hand sanitisers. Temperature checks must be taken at all entry points into a facility.

Guests and service providers with temperature (above 37.5) are to be politely turned back and referred to paramedics or the emergency response team on the ground. Hand sanitizers must be positioned at the entry points and different spots within the hall.

All event centres must endeavour to display standard COVID-19 safety signs. The signs must be bold and installed at conspicuous locations. Event centre owners/ planners/vendors would be responsible for any breach of protocols by their staff.

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In case you missed it

  • It can be recalled that in July 2020, the Lagos State Government had issued fresh guidelines on the reopening of event and social centres following their shutdown as part of measures to contain the spread of the coronavirus pandemic.
  • The state government insisted that the owners of such facilities must register with the government pending further directives.

 

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Billionaire Watch

Reinvestment: The powerful strategy used by the 2 richest men in the world

Bezos and Musk increased the stock value of their companies by investing back into the company, the proceeds they made from it.  

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Reinvestment: The simple but powerful strategy used by the two richest men in the world. 

Jeff Bezos and Elon Musk are collectively worth $372bn. They are the two wealthiest individuals on earth. Their wealth has grown significantly over the years and it looks likely to remain so.

To give you a clear picture of the significant increase in the wealth of both men, read the points below.

  • According to Business Insider and Bloomberg, Jeff Bezos’ net worth increased by 59.1% in 2020. The tech billionaire added a humongous $67.9bn to his fortunes in 2020 and is currently worth $197bn.
  • According to CNBC Elon Musk started 2020 with a net worth of $28bn, he is currently worth $175bn.

Both men have employed some interesting strategies in growing their wealth to the point that it currently is, and this article will harp on one of these strategies.

Reinvestment

Reinvestment as an investment strategy is defined by Investopedia as the practice of using dividends, interest, or any other form of income distribution earned in investment to purchase additional shares or units, rather than receiving the distributions in cash.

In very simple terms, it means ploughing the income you make from an investment back into it, rather than receiving the income as cash. Jeff Bezos and Elon Musk both employed this strategy to grow their wealth in one year.

How the multi-billionaires did it 

The Reinvestment strategy has been proven over time to increase the value of a stock or mutual fund. Buying a huge stake in your own company shares encourages more investors to also buy your company shares. Jeff Bezos and Elon Musk increased the stock value of their companies by reinvesting some of their profits and in so doing, they significantly got richer.

Jeff Bezos’ reinvestment strategy

Jeff Bezos retains part of his wealth in his company’s stocks. This means that instead of collecting all of his profits in cash, he retains some in his company by buying its shares. He currently owns about 11% of Amazon’s shares according to a November 2020 SEC filing.

The result 

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  • Jeff Bezos added an extra $67.9bn to his net worth in 1 year.
  • Amazon’s stock price rose by a staggering 70% in a calendar year.
  • Jeff Bezos is currently the richest man in the world.

Elon Musk’s reinvestment strategy

Like Bezos, Elon Musk also retains part of his wealth in his company’s stocks. He owns over 20% of Tesla stocks. His reinvestment strategy played a major role in driving Tesla shares to a whopping 740% increase in 2020.

The result

  • Elon Musk’s Tesla Stock price increased by 740% in just 1 year.
  • His net worth increased by over 500% from 2020 to 2021.
  • His company got into the S&P 500 index and he became the second richest man in the world.

What you should know

Jeff Bezos is the world’s richest person for the fourth year running, according to Forbes while Elon Musk moved from his 31st position to his current 2nd place on the Forbes billionaire ranking for 2021.

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