According to data from the Nigerian Stock Exchange, as at August 16th, 2019, the market capitalization of the entire 170 listed stocks was valued at about N13.1 trillion. Out of these 170 stocks, the big six, made up of Dangote Cement, MTN Nigeria, Airtel, Nestle, GTB and Zenith Bank, have a combined market capitalization of about N8.95 trillion — about 68% of the market capitalization of the exchange. Whenever these stocks sneeze the stock market catches a cold.
Conversely, there are also stocks that are at the lowest tier with market capitalizations that fall below what you will expect of a company listed in the upper tier of the Stock Exchange. One company holds the unenviable title of being the least capitalized stock on the Nigerian Stock Exchange. That stock is none other than Thomas Wyatt Nigeria Plc.
Market Cap: According to the latest stock exchange data, Thomas Wyatt has a market capitalization of a meagre N92.4 million or $257,000 only. A few months ago, it was worth about half of this amount and valued at just about N46 million.
- The stock has a year low of N0.23 and is ironically one of the best-performing stocks, after gaining a whopping 82.6%, since it hit bottom in March.
- Its current share price of N0.42 is currently its year high and has remained that way since July 2019.
- Its highest share price over the last 5 years was N0.79, last achieved in December 2014. It has not touched this level since then.
What does Thomas Wyatt do? According to information on its website, the company is majorly into paper manufacturing, the printing of books and other stationery items, and manufacturing printers. Some of its products include exercise books, ruled papers, duplicated books, spiral and quarter-bound books, photocopying and typing papers and full complements of envelopes. The company also prints calendars, diaries, toilet rolls, and facial tissues. You may have seen exercise books with the brand name “Apex Mill”, this belongs to them.
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Who are their customers?: The company claims that its customers include the likes of “Unilever Nigeria Plc, Nigerian Bottling Company, MTN Communications, Flour Mills of Nigeria Plc, Mr. Biggs, College of Medicine, University of Lagos, Obafemi Awolowo University, Corona School Trust Council, Queen College, etc.” Whether these companies still patronize them is another issue.
Cursory Financial Analysis: According to the company’s 2019 full-year results ended March 2019, Thomas Wyatt reported revenues of N58.1 million, a drop from N86.3 million reported a year earlier. Losses also ballooned to N56.7 million, compared to N98.5 million losses a year earlier. The company is technically insolvent, with about N343 million in negative equity.
How is it still afloat?: Thomas Wyatt remains afloat because of Leadway Assurance, and the Bank of Industry. It also is in business because some of its related parties often give it a lifeline in credit purchases.
It owes Leadway Assurance about N265 million, and the Bank of Industry N185 million (Finance Lease). It appears that it has not paid down the principal and only paid about N18 million in interest and N500k in lease rentals during the year.
Who owns Thomas Wyatt? The company’s majority shareholders are Moorehouse Management Ltd with 22.3% of the equity of the company. It is closely followed by Nova Finance and Security with 10.6%, and Ojukwu Transport with 5%. Nigerians own the rest of the company.
Moorehouse Management invested in the company in 2005 as a core investor, but it appears that the benefits of that deal have not materialized as expected.
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Buying Opportunity? Well, on paper the company is worth N92.4 million; however, it could be worth more than that at true cost. Anyone who buys this company will still need to pay for what you can call a control premium. The company also owns property plants and equipment with a book value of N391 million. It could be worth much more based on market value.
Who could be interested in buying? Thomas Wyatt is one of the oldest companies listed on the Nigerian Stock Exchange, and it was incorporated in 1948. Acquiring the company shouldn’t be difficult if the price is right and the owners are willing to sell. However, simple things can be quite onerous in Nigeria.
Those interested could be:
- Existing shareholders who want to take it private.
- Any private company or private equity firm looking for a reverse listing. This basically means listing on the stock exchange by acquiring an already listed firm.
- Any group of sharp investment firms looking for a challenge — a company they can turn around.
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