Would you stake your money on Roads Nigeria Plc?

Investors, both local and foreign, are always on the lookout for favourable investment opportunities. It is for this reason that Nairametrics constantly profiles little-known companies on the Nigerians Stock Exchange, with special focus on the opportunities (or lack therefore) available for potential investors. This week, we are focusing on Roads Nigeria Plc, a not-so-popular company that engages in a really viable business venture.

Would you ever consider investing your money in this company? Well, hold your answer until you’re done reading through this piece.

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A corporate overview of Roads Nigeria Plc: history, business model, share price, and market capitalisation

The aptly-named Roads Nigeria Plc is a Nigerian civil engineering firm whose business model encompasses the construction of roads, bridges, dams, airfields, and even real estate. The company is headquartered in the Northern Nigerian city of Sokoto and has been operating since 1974 when it was incorporated. The company has a market capitalisation of N165 millionhas a market capitalisation of N165 million and total outstanding shares of 25 million. Note that share price has remained mostly unchanged at N6.60 for many months.

The company’s ownership structure

At this juncture, it is important to mention that Roads Nigeria Plc has not released any financial statement for many quarters. Precisely, no financial statement has been released by the company for three straight years. As such, it is difficult to easily ascertain the ownership structure, seeing as such information is typically contained in the financial statement of quoted companies. That said, Road Nigeria Plc’s ownership structure remains a mystery in the meantime.

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Overview of the company’s board of directors

Going by information available in the company’s last-released financial report, the company has seven executives on its board of directors. It is unclear if this number has changed or even if the named executives still retain their positions till date. It would have been easier to verify this information if, at least, Roads Nigeria Plc had a functional website, which it does not. Anyway, the executives are listed below:

1. J. M Dansu: Chairman/Chief Executive Officer
2. P. E Oriwoh: Executive Director (Finance)
3. J. O Obayemi: Non-Executive Officer
4. C.B.J Ribbert: Non-Executive Officer
5. Alhaji Muhammed U Sokoto: Non-Executive Officer
6. Alhaji Musa Suleian Lllela: Non-Executive Officer
7. Hajiya A. Hassan: Non-Executive Officer

The company’s target market

As a civil engineering outfit, Roads Nigeria Plc basically specialises in the provision of infrastructural amenities in cities, towns, and villages. As such, its target audience cuts across the following: real estate agents, architecture firms, local, state, and federal governments, contractors, lawyers, etc. It is unclear how the company has been able to take advantage of its target audiences, considering its lack of financial reports.

The company’s financials

Again, Roads Nigeria Plc has not been up to date with its obligated financial disclosures. The last financial result by the company was released as far back as 2015. The last result, which was for the period ended March 31st 2015, indicated an abysmal performance. Revenue declined by as much as 41.69% from N3.26bn to N1.90bn. Similarly, the company had recorded a loss of N227.7 million for the period under consideration, compared to a profit after tax of N136.9 million for the comparable period in 2014.

Now, it is unclear what exactly is happening to Roads Nigeria Plc. Could the company’s absence of financial reports be as a result of poor performance? And if that is the case, then what could possibly be responsible for the poor performance?

Inasmuch as it is easy to name competition as the factor responsible, an expert who chose not to be named (due to the uncertain nature of the situation), stated the following:

“Roads Nigeria Plc could actually be struggling to find business. As a civil engineering firm, its primary target market is government. Sadly, the government is not exactly spending as much money as it ought to for the construction of roads and other amenities. With a situation like this, it becomes utterly impossible for the company to make money. It doesn’t also help that it seems to be all the way up north, with little or no influence down south.”

The role of competition

Competition is yet another factor that might be affecting Roads Nigeria Plc’s financials. This is because there are a number of other construction firms in the country, including Julius Berger Nigeria Plc, Setraco Nigeria, Interfem Reconstruction Company Ltd, H&M Nigeria Ltd, Dantata & Sawoe Construction Company, a growing list of Chinese construction companies, etc. All of these companies are constantly in competition for the next available government contract.

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Would you invest In this company?

Having learnt the basic information there is to know about this company, the question remains – would you ever consider investing in it? Your answer is probably “NO” and it is understandable. First, it is hard to ascertain the opportunities in the company, no thanks to the lack of necessary financial information. No sane investor would ever want to invest in a company without first obtaining full knowledge of such a company’s financial well-being.

More so, Roads Nigeria Plc’s corporate compliance record is rather unimpressive, at least judging by its recent non-compliance to the listing rules of the Nigerian Stock Exchange. No investor wants to invest in a company with this kind of record.