Nestlé S.A, Switzerland, the parent company of Nestlé Nigeria Plc, has increased its stake in the Nigerian subsidiary with the purchase of 229,697 additional units in the shares of the company.
This was disclosed by the company in a notification sent to the Nigerian Stock Exchange, which was seen by Nairametrics.
The purchase according to the notification signed by the Company’s Secretary, Bode Ayeku, was made on the bourse in a single transaction on 11th, September.
This disclosure is a regulatory requirement that must be reported to the Nigerian Stock Exchange, especially when a major shareholder or director of a publicly quoted company purchases or sells shares in the company they own.
The breakdown of the transaction, shows that the purchase consideration for the 229,697 additional units of Nestlé Nigeria shares at an average price of N1,249.65 per unit is put at N287 million.
This purchase and previous purchases strengthen Nestlé S. A’s status as the parent company of the subsidiary. So far, the company has accumulated a total of 977,744 additional shares worth N1.165 billion since 20th August.
As of June 30th, in line with the shareholding analysis of Nestlé Nigeria in its half-year financial results, the company had exactly 792,656,252 shares outstanding, with Nestlé S.A being the majority shareholder with 524,559,457 units, which amount to 66.18% of the total shares of the company outstanding.
Hence, with the purchase of 229,697 additional units, and previous purchases from 20th August till date, which amount to 977,744 units. Nestlé S. A’s ownership percentage of Nestlé Nigeria is now put at 66.30%.
What it means: Insider transactions, both sales and purchases, are often a sign of how shareholders perceive a company’s valuation. It could also mean a possible capital raise or that the major shareholders are strengthening their existing holdings.
The purchase of the shares of Nestlé Nigeria by Nestlé S.A has reduced the volatility of the company share price, with the parent company consistently mopping up stray volumes on the bourse.
About the company
Nestlé Nigeria PLC is one of the largest foods and beverage companies in Africa, and the largest consumer goods company by market capitalization. Nestlé Nigeria Plc engages in the manufacturing, marketing and distribution of food products including purified water. It also exports some of its products to other countries within Africa.
It has three product segments: Food, Beverages, and seasoning. The Food segment engages in the production and sale of Cerelac, Nutrend, Nan, Lactogen and Golden Morn. The Beverages segment engages in the production and sale of Milo, Chocomilo, Nido, Nescafe and Nestlé Pure Life. While the seasoning segment engages in the sale of Maggi cubes.
Four FMCG companies lost 15.2 billion in value in a single day
FMCG companies declined by N15.2 billion in a single day.
The prevailing sell-offs on the Nigerian Stock Exchange has extended the loss in the share price of key FMCG companies as well as their market capitalization on the Nigerian Stock Exchange.
Data tracked on the NSE website from the close of trade on the 3rd of March till the close of trading activities on the local bourse on the 4th of March 2021, revealed that the market capitalization of these FMCG companies declined by N15.2 billion in a single day.
FMCG companies declined by N15.2 billion in a single day.
Northern Nigeria Flourmills (NNFM)
NNFM is a flour milling company founded in October 1971, with key focus on the business of milling wheat, maize, and similar grain. The company printed one of the highest loss on the Exchange on Thursday.
The share price of the flour milling company dropped by 9.97% to close the day lower at N6.32. This move significantly affected the market capitalization of the company, which culminated in a loss of N125 million in value.
Champion Breweries (CHAMPION)
Champion Breweries Plc has been in the news for a while, following the acquisition of 1,903,609,538 ordinary shares of the company by Heineken through its wholly-owned subsidiary, Raysun Nigeria Limited, at a price of N2.6 per share.
This move saw the share price of the brewing company surge from N0.93 on January 8 2021, to N3.76 on the 2nd of February 2021. Since then, the share price of Champion Breweries has continued to suffer significant losses.
At the close of trade on NSE yesterday, Champion Breweries shares suffered a 9.19% decline to close the day lower at N1.68.
This move significantly affected the market capitalization of the brewer, taking its loss on the exchange in a single day to N1.331 billion.
This decline is a potential opportunity for bargain hunters to key in once more, with the expectation to enjoy a gain of about 55%, should Heineken launch a takeover bid of N2.60 per share for the balance of 17.3% or 1,351,954 units of Champion Breweries shares with shareholders.
Honeywell Flour Mill (HONYFLOUR)
The share price of Honeywell Flour Mills Plc has suffered major declines in recent times. The flour milling company, who is also an important part of the Honeywell Group -a foremost indigenous Nigerian conglomerate engaged in select businesses in key sectors of the Nigerian economy- has seen its shares gone from being valued at N1.40 in February to trading at N1.20 towards the end of the same month.
Worthy of note is the fact that the shares of the company during trading activities on NSE yesterday, went as low as N1.13 per share, before buying pressures on the exchange pushed the price back to N1.20 per share.
This move significantly affected the market capitalization of the indigenous flour milling company as it approximately lost N397 billion in a single session.
Dangote Sugar Refinery (DANGSUGAR)
Dangote Sugar has seen its share price decline by more than 8% since declaring a 33% growth in its bottom-line in 2020. The company also proposed a better than the expected dividend of N1.50, 36.36% higher than 2019 dividend (N1.10).
However, despite this impressive performance, Dangote Sugar continues to be punished on the exchange, as wary investors offload the shares of the company, to hunt for yields in the money market.
At the close of trade on NSE yesterday, Dangote Sugar shares suffered a 6.35% decline, to close the day valued at N16.25.
The sell-off in the shares of Dangote’s integrated sugar business on the floor of the Nigerian Stock Exchange yesterday culminated into a loss of N13.4 billion in a single day.
NSE CGI depreciates by 8% in February, recording highest decline since March 2020
The NSE Consumer goods index shed a total of 49.84 index points in February, the highest loss on the index since March 2020.
The Nigerian Stock Exchange Consumer Goods Index (CGI), an index that tracks the performance of consumer goods companies, depreciated by 8.12% in the month of February at the back of sell-offs and building negative sentiments in the market.
A preview of the performance of the index revealed that as of the close of trading activities on Friday 26th February 2021, the index stood at 563.85 index points, from 613.69 index points at the open of trade for the month.
In line with this, the Consumer Goods Index shed a total of 49.84 index points – the highest since March 2020 (-132.53 index points)- as wary investors offload shares of top consumer goods company on NSE, leading to the decline in the share price of Nestle, Dangote Sugar, Flour Mills, NB and eight (8) others.
What you should know
- The NSE Consumer goods Index was designed to provide an investable benchmark to capture the performance of companies in the consumer goods sector. The index comprises the most capitalized and liquid companies in food, beverage, and tobacco.
- The index is based on the market capitalization methodology, as it tracks the performance of fifteen consumer goods companies on the Nigerian Stock Exchange which includes, Nestle, Nigerian Breweries (NB), Dangote Sugar, and Flour Mills.
- The overall performance of the companies was bearish, as the index closed on a negative note in the month of February with 12 losers relative to 3 gainers.
- NNFM (-27.48%) led the losers’ chart, while MCNICHOLS (+56.86%) was the top gainer in the month of February, followed by GUINNESS (+21.32%).
- MCNICHOLS up 56.86% to close at N0.8
- GUINNESS up 21.32% to close N23.05
- UNILEVER up 0.74% to close at N13.95
- NNFM down by 27.48% to close at N7.02
- VITAFOAM down by 22.89% to close at N7.75
- CHAMPION down by 18.97% to close at N2.52
- NB down by 17.46% to close at N52
- FLOURMILLS down by 16.86% to close at N28.85
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