Becoming a listed company on the Nigerian Stock Exchange (NSE) is a thing of prestige, no doubt. However, that is not all there is to guaranteeing the success of a business. Little wonder there are many underperforming quoted companies in Nigeria today. It may even interest you to know that out of the 170 companies on the Nigerian bourse, only about six of them account for as much as 68% of the entire market capitalisation of the NSE. The rest are mostly kobo stocks, with market capitalisation so small that they can easily be acquired by a startup. One of such companies is Trans-Nationwide Express Plc.
The company’s market cap
The latest stock market data released by the NSE shows that Trans-Nationwide Express Plc is among the least-capitalised companies in Nigeria. The company has a market cap of merely N328.1 million, which converts to approximately $1 million. A company’s market capitalisation is typically calculated by multiplying the outstanding shares of such a company by the current market price of its shares.
Speaking of share price, Trans-Nationwide’s stock ended last week at N0.70, having remained unchanged throughout the month of August. Year to date, the stock recorded its lowest ebb on Monday, February 21st when it closed trading at N0.63. Its year high was N0.82 on Tuesday, April 16th, 2019.
The company’s business model
According to information available on its website, Trans-Nationwide Express Plc claims that it “is a leading Logistics Company engaged in domestic and International Express delivery, haulage, freight and other ancillary transportation and storage services.” In other words, the company engages in the business of both local and international parcel delivery, whilst offering haulage services.
The company’s target market
Due to the nature of its business, the company has a diverse market audience. According to information available on its website, some of its clients play in such areas of the economy as oil and gas, e-commerce, education, banking, and even the public service.
Considering the wide spectrum of customers the company targets, it is expected that its financial growth will be exponential. But this is not exactly the case. Instead, the company’s H1 2019 financial results show that a total revenue of N410.3 million was realised. Out of this amount, the company’s courier services generated the most amount at N246.6 million, while its warehouse generated the least amount at N4.5 million.
Meanwhile, the total direct operating cost incurred during the period was N158.3 million. In the same vein, administrative expenses stood at N235.7 million. Profit after tax only stood at N10.5 million.
The company’s ownership structure
Information available in the company’s full-year 2018 financial result shows that the company’s substantial shareholding is in the following order:
- MWML Nominees Ltd: 124, 600, 616 units representing 26.58%,
- Saham Unitrust Insurance Ltd: 99, 609, 000 representing 21.25%, and
- Adebayo Thomas Bandele (Otunba): 30, 367, 861, representing 6.48%.
Together, the three substantial shareholders make up 54.31% of the company’s shareholding. The remaining 45.69% are held by retail investors.
Why a startup could buy the company
Trans-Nationwide is currently in dire need of cash to boost its operation. It is rather intriguing that the company is still scrambling to scale/expand 35 years after it was founded in 1984. This is because one of its newest competitors in the market space – Kobo 360 – is expanding aggressively. Though established some years ago, Kobo 360 has made innovative use of technology to expand its operations. Its viable operation has also helped it to raise a lot of money, including the most recent $30 million capital raise which was backed by Goldman Sachs.
The $1 million valuation for Trans Nationwide is merely a fragment of the $30 million Kobo 360 recently raised. What this means, therefore, is that Kobo 360 could easily stake $1 million to buy out the company.
Other delivery startups that could potentially buy this company include GIG, which has grown to become a major player in the Nigerian logistics market. In the same vein, Chinese-owned OPera has the financial clout to cough out $1 million for quick acquisition of this company. Even Max.ng could afford $1 million to acquire Trans Nation-wide. The company recently raised $7 million for expansion purposes.
However, a possible acquisition may never happen. In a recent notice sent by Trans–Nationwide informing the NSE of its intent to raise fresh capital to the tune of N1.33 billion, the company specified that the right issue is limited to its existing shareholders.
Carbon Tax: A market-based alternative to carbon emissions in Nigeria
A carbon tax is a way to have users of carbon fuels pay for the climate damage caused by releasing carbon dioxide into the atmosphere.
Fossil Fuel is hurting us. It is an undeniable truth. I have heard in many conversations more often than not a very solid support for the fossil industry. Rather simple conversations on its perils and disadvantages always end with resignation by the other party that “fossil has come to stay.”
While not doubting that premise, I rather believe a lot can be done to limit the harmful effect of what is here to stay with us. A lot can be said about how beneficial fossil fuel is to the economy and how it is initially cheaper and more available but, in truth, the harms still exists.
Sadly, these harms are more than good. The clarion call to stop these emissions has been on for a very long time, but the reality remains the attention span of the larger consumer population is very very short when it comes to that discourse.
I would say, the essence and need for us to look to further means to mitigate the harm from fossil fuel is not just for a cleaner environment but also for an environment to still exist. The constant clamour for a change in our perspective is not just for the growth of the alternative sector but also a struggle for survival, because we will all lose if we do not stop.
Now, since we have declared to ourselves that we wouldn’t stop, it only makes sense if we can effectively checkmate how we continue with fossil, adopt Carbon Capture techniques and in an attempt to make sure no one goes overboard, impose fines on the amount on those that burn beyond their limit and on fossil that enters the country. This is a concept that, rather thankfully, already exists. Carbon Tax.
A carbon tax is a fee imposed on the burning of carbon-based fuels (coal, oil, gas). A carbon tax is a way — the only way, really — to have users of carbon fuels pay for the climate damage caused by releasing carbon dioxide into the atmosphere.
It is a market-based alternative that helps the government reduce the carbon footprint and also allows them make money as a government when there is a breach of this solemn oath to stay in check. In Nigeria, The Carbon Tax Act came into force on 1 June 2019. The carbon tax was designed to apply to direct emissions in the following categories as specified in the National Greenhouse Gas Emission Reporting Regulations:
- Fuel combustion, which relates to emissions released from fuel combustion activities;
- Fugitive emissions from fuels, which relates to emissions mainly released from the extraction, production, processing, and distribution of fossil fuels; and
- Industrial processes emissions, which relates to emissions released from the consumption of carbonates and the use of fuels as feedstock or as carbon reductants, and the emission of synthetic gases in particular cases.
It is trite to say that this entire scheme is altogether ineffective and barely surviving. It is sad to note because there are numerous benefits to Carbon Tax. The advantages of doing this asides still having a healthy civilization in the next 100 years are numerous. First, it would be creating a very profitable system of revenue for the government. Here, the government will not need to spend much on the initial cost of having this revenue stream in place. Aside from the need to establish an agency to enforce the limits and payment of fines and the adequate system of calculating and verifying the amount consumed, the expenses on the government is almost Zero. This agency unlike many others in this country will be more active than idle, considering the existence of various fossil burning industries in Nigeria and being largely oil-dependent.
Secondly, this would help Nigeria join the global effort to reduce the carbon footprint and in turn put Nigeria on the good pages of the global community as a contributor to green energy. This will birth a host of benefits for the Nigerian Community and also assist the domestic green energy advocates.
Furthermore, this system will help to promote the alternative energy industry. The renewable energy industry will from this initiative be able to sufficiently measure the actual impact of their activities on the environment and the economy as well as challenge the growth of new innovations to grow it. The campaigns will no longer be dependent on cancelling out the large emissions killing the environment since more revenue now streams for the government from them, but to the actual direct benefits of renewable energy.
This alternative will also assist the government in assessing the benefits of reducing emissions and growing the renewable energy industry. The implementation of this will serve as a step for the assessment and understanding of the dynamics, policies and funding needed for the full inevitable integration of Green Energy.
The advantages are numerous and as such need Carbon Taxing to be revived in the country. In all sincerity to the dynamics of Nigerian politics and due respect to our exalted government, it is almost too easy for these things to be put in place seeing they will also have a fresh channel to loot from while saving our dear lives and making the air cleaner. A Win-Win for all the parties involved.
Written by Ude Fortune Chiziterem
Nigerian states generate N1.31 trillion IGR in 2020 as Lagos dwarfs others
The 36 states and the Federal Capital, generated a sum of N1.31 trillion as Internally generated revenue (IGR) in 2020
The 36 states and the Federal Capital Territory generated a sum of N1.31 trillion as Internally generated revenue (IGR) in 2020. This was contained in the state IGR report, which was recently released by the National Bureau of Statistics (NBS).
According to the report, the states’ IGR declined by 1.93% from N1.33 trillion, recorded in the previous year to N1.31 trillion in 2020. It however increased by 11.7% compared to N1.69 trillion recorded in 2018.
The decline may be due to the effects of the covid-19 pandemic on the various states of the federation, as they were forced to implement lockdown protocols to curb the spread of the disease in the country.
- States generated N1.09 trillion from taxes in the year 2020, accounting for 83.3% of the total IGR received in the year.
- Tax revenue also declined, when compared to N1.11 trillion collected in the previous year. This represents a 2.25% decline year-on-year.
- Lagos State recorded the highest Internally Generated Revenue of N418.99 billion, accounting for 32.1% of the total and closely followed by Rivers State with N117.19 billion.
- Others with the highest IGR in 2020 include Abuja (N92.06 billion), Delta (N59.73 billion), and Kaduna (N50.75 billion).
- Kebbi State recorded the highest year-on-year growth of 87.02%, closely followed by Ebonyi at 87.3%. Oyo State grew its IGR by 42.23%, Borno (41.63%), while Katsina grew by 34.16%.
- On the flip side, Benue State recorded the highest year-on-year decline of 41.38%, followed by Sokoto State, which dipped by 37.93%, Kwara (36.03%), Jigawa (32.95%), and Ogun State (N28.44%).
A cursory look at the data shows that the States recorded the highest quarterly IGR in the first quarter of the year, before the covid-induced lockdown in March 2020. It however dipped significantly by 25.53% to stand at N269.88 billion in Q2 2020.
States generated a sum of N338.57 billion in Q3 2020 and then recorded a marginal decline in Q4 2020 to stand at N335.25 billion.
Lagos dwarfed others
Lagos State recorded the highest internally generated revenue in 2020, having made N418.99 billion, accounting for 32.08% of the total states’ IGR recorded in the period under review.
- It is no surprise that Lagos State makes this much revenue as it is regarded as the commercial hub of Nigeria.
- According to the data from NBS, Rivers State is a distant second on the list with N117.19 billion as IGR, representing 8.97% of the total, while the Federal Capital Territory, Abuja followed closely with N92.06 billion, representing 7.05% of the total recorded in the year.
- Others on the list include Delta State (N59.73 billion), Kaduna State (N50.77 billion), Ogun (N50.75 billion), and Oyo State with N38.04 billion.
Kebbi, Ebonyi boosted revenue by over 80%
Kebbi State and Ebonyi State grew their internally generated revenue by over 80%, with Kebbi recording 87.02% growth in IGR to stand top on the list of states with the highest growth rate; followed closely by Ebonyi State with 82.3% growth in IGR to stand at N13.59 billion.
- Oyo State grew its IGR by 42.23%, Borno (41.63%), Katsina (34.16%), and Gombe (25.5%).
- Meanwhile, 18 out of the 37 states of the federation recorded a decline in IGR in 2020, a list led by Benue State, having dipped its annual IGR by 41.38%, followed by Sokoto with 37.93%, Kwara (36.03%), Jigawa (32.95%), and Ogun State with a decline of 25.44%.
What this means
- The decline in states’ internal revenue was caused by the pandemic which struck earlier in 2020, disrupting economic activities in the country.
- Nigeria recorded a recession in the third quarter of 2020, after a consecutive economic contraction, recorded in Q2 and Q3 2020.
- It, however, recovered from the recession in the fourth quarter. It is therefore hoped that as economic activities resume fully in the country, the states will be able to boost their revenue in the short-to-medium term.
Nairametrics | Company Earnings
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- UACN Property Development Company Plc appoints Ojo Odunayo as new CEO.
- Unilever Nigeria Plc reports a loss of N492 million in Q1 2021.
- Nigerian Breweries publishes names of over 100,000 shareholders who are yet to claim their dividends.
- 2020 FY Results: Sovereign Trust Insurance Plc records a 37% increase in profit after tax.
- CSCS Plc posts profit after tax of N6.93 billion in FY 2020