The share price of Guinness Nigeria Plc, the third-largest brewer by market capitalization, has declined by 13.14% since the 28th of August, when the brewer released its audited financial results.
Guinness Nigeria Plc, in its financial statements, indicated that revenue decreased by 21% to N104.38 billion, compared to the N131.5 billion revenue it reported in the same period of 2019. The company suffered a pre-tax loss of N17 billion, impacted by impairment losses amounting to N13.8 billion, due to the prevailing economic and COVID-19 impacted conditions.
This has led to a reaction in the stock market, as the shares of Guinness on the day of this disclosure, shed a whopping 9.29% to close trading activities for the week in the red zone, at N14.15 per share.
It is worthy of note that since the 28th of August, its share price declined by 13.14%, from N15.60 to N13.55 at the end of the trading session for today. It is 5 kobo higher than the N13.50 market open price from Monday, a week ago.
However, Guinness share price has lost 54.91% YTD, and it is currently trading 55 kobo higher than its all-time low of N13.00.
Threats to the financial strength of Guinness
Recently, NAFDAC restated its plans to phase out alcohol sales in sachets, and small volume PET and glass bottles. This is a follow up to the 50% reduction in the production capacity of alcohol in sachets, and small volume PET or glass bottles.
This policy has raised concerns, as it is expected to affect Guinness’ revenue, since the company expanded the Ogba Brewery, by adding a PET line in 2018.
However, Guinness’ exposure to the complete phasing out of alcohol sales in sachets, comes from its popular Orijin Bitters brand, and in the light of this, the revenue impact of the policy is expected to be marginal, as the exposure of Guinness to its whole spirits segment is 18%.
The company is currently finding it hard to refinance its five-year outstanding related party loan of $22.5mn (N8.7bn), due to dollar scarcity. With the management stuck with a possible rollover, it has to decide whether to keep it as a dollar debt or convert the debt to local currency.
SET Plc recorded N14.4m post-tax loss in Q3 2020
Secure Electronic Technology Plc (SET Plc) recorded a post-tax loss of N14.4 million in Q3 2020.
Secure Electronic Technology Plc (SET Plc) recorded a post-tax loss of N14.4M in Q3 2020, triggered by a high dealer’s commission.
A cursory analysis of the Q3 2020 results of Secure Electronic Technology Plc (SET Plc) indicates that the Q3 2020 post-tax loss reduced by 33.7% from N21.7M in the same quarter last year.
- Revenue increased by 1.0%
- Prizes/winnings increased by 0.52%
- Dealers commission increased by 3.42%
- Net income decreased by 14.71%
- Administrative expenses decreased by 21.21%
- Operating loss decreased by 34.62%
- Financial charges increased by 68.23%
What you should know
- A cursory analysis of the latest results of the company reveals that revenues generated from lottery sales and gaming products increased by 1% in Q3 2020 relative to Q3 2019, despite COVID-19 pandemic disruptions that have affected revenues of most businesses worldwide.
- YoY, revenue decreased by 2.15% from N3.18B in 2019 (9-months) relative to N3.11B in 2020 (9-months) – indicating that COVID-19 might have impacted the activities of the company, when considered on a yearly basis.
- While the company was able to increase revenues by 1%, reduce its operating loss by 34.62%, and reduce its administrative expenses by 21.21%; high dealers commission and administrative expenses as well as finance charges which increased by 68.23% contributed to the post-tax loss recorded.
- Dealers commission and administrative expenses constitute a drag on the company’s profitability. Dealer’s commission was 36.12% of revenues in the period under consideration while prizes/winnings were 60.35%. Administrative expenses was 137.16% of net income in the quarter under consideration.
- The post-tax loss is an indication that there was no distributable profit. Thus, the Earnings Per Share (EPS) of the company would be a deficit; so that Q3 2020 EPS was –0.26 kobo.
The shares currently trade at N0.20 per unit. The highest price for a unit of share in 52 weeks was N0.20 and the lowest N0.20, indicating that the share price of the company has been stable. A total of 20,212 units was sold in the last seven days trades. Shares outstanding is 5.63 billion units and its market capitalization as at close of business Friday 16th October 2020 was N1.13 billion.
Interlinked Technologies Plc operates in the same sub-sector as SET Plc – Speciality. Its share price is N2.91. The highest price for a unit of share in 52 weeks was N2.91 and the lowest N2.91 – indicating that the share price of the company has been stable. A total of 141,020 units was sold in the last seven days trades. Shares outstanding is 236.7 million units and its market capitalization as at close of business Friday 16th October 2020 was N688.80 million.
Secure Electronic Technology Plc (SET Plc), formerly known as National Sports Lottery was incorporated in 2000 with an exclusive 30-year license granted by the FG to operate the National Lottery in Nigeria.
SET Plc started out as a gaming/lottery company. While online gaming remains a major part of its operations. Aside from lottery and gaming, the company now explores other business areas within the ambit of technology and data management.
Today, the company is involved in the vending of airtime, provision of card payment solutions, trivia promo syndication, provision of central database and information processing services, as well as treasury/asset management services.
Presco Plc projects N24.53 billion turnover in Q4 2020
Presco’s forecast is coming amid the negative economic impacts of the coronavirus pandemic.
Presco Plc has projected an 82.03% rise in Profit after Tax to N6.99 billion in Q4 2020, up from N3.84 billion in Q4 2019. Also, its projected turnover of N24.53 billion indicates a 24.39% increase when compared to the N19.72 billion made in Q4 2019.
The Earnings Forecast sent to the Nigerian Stock Exchange (NSE) today, estimated the Gross Profit to be N14.18 billion and the Profit before Tax to be N9.13 billion.
This forecast is coming amid the negative economic impacts of the coronavirus pandemic. It is generally expected that the firm should have downgraded their earnings and profitability forecasts, but renewed optimism based on the reopening of the economy and growing demands for consumer goods have been factors that influenced the projections.
Presco Plc had earlier held its Annual General Meeting, with the unaudited accounts for the tQ3 2020 ended September 30, 2020, were deliberated upon among other resolutions.
What you should know
Presco Plc is a fully-integrated agro-industrial establishment with oil palm plantations, palm oil mill, palm kernel crushing plant, and vegetable oil refining plant. They produce specialty oil and fats.
Regency Alliance Insurance Plc forecast N730.72 million profit for Q4 2020
Regency Alliance Insurance Plc released its earnings forecast for Q4 2020, with a projected profit after tax of N730.72 million.
Regency Alliance Insurance Plc, a major player in Nigeria’s insurance industry has released its earnings forecast for Q4 2020 to the Nigerian Stock Exchange (NSE), with a profit after tax of N730.72 million.
While awaiting its Q3 2020 financials, the projected profit after tax figures is up by 32.75%, from N550.46 million recorded in Q2 2020 to a projected figure of N730.72 million for the last quarter of the year.
Other key projected financial metrics which recorded an increase are:
- Profit before tax recorded a 28.3% increase from N670.11 million recorded in Q2 2020 to a projected sum of N859.67 million.
- Taxation grew by 7.8% from N119.65million recorded in Q2 2020 to a projected sum of N128.95 million
Other key figures in the forecast for Q4 2020 include; the projected sums of N4.28 billion for Gross premium earned, N2.82 billion for Net premium, N855.9 million for Net claims incurred, N928.65 million for Underwriting/Management Expenses, and N487.3 million for Net cash generated from operating activities.
Regency Alliance Insurance Plc had earlier announced 28th October 2020, as the date for its board meeting, to consider its Q3 2020 financials for the period ended 30th September 2020. In lieu of this, its closed period will be from October 13, 2020.
On this basis, the projected key financial metrics were compared with the last reported financials in Q2 2020.
What this means
The increase in projected Q4 2020 might be connected to the drive to meet up with recapitalization requirements for insurance firms in Nigeria. Recall that Nairametrics had earlier reported on how the aforementioned firm had planned to raise more capital through various strategic means including issuing a N10 billion additional ordinary shares at N0.50K each.
Theoretically, the projected increase in profit is realizable when a number of factors such as optimization of underwriting skills, lower claims ratio, higher gross premium, and efficient optimization of technology, amongst others are satisfied.
What you should know
Regency Alliance Insurance Plc is an insurance company in Nigeria with its headquarters in Lagos. It is licensed to cover all classes of non-life insurance. The company also has business interests in property investments in the form of real estate development and leasing, finance leasing, retail and microfinance banking, and vehicle tracking and fleet management services.