The founder and ‘CEO’ of HealthPlus Ltd, Mrs. Bukky George, revealed she put up her house as collateral to help fund operations of the company she founded in 1999. She revealed this to Nairametrics, in an exclusive interview granted to our Analyst, at Southern Sun, Ikoyi, Lagos.
The Nairametrics’ Lead Analyst sat with Mrs. George, to get a first-hand account of her side of the story, that has pit Private Equity investors from the UK, against the Founder of a business seeking cash to expand their operations.
Nairametrics asked a range of questions, some of which she preferred not to respond to as the matter was still in court. However, in one of the remarks, she confirmed that she had to put up her house as collateral, to get funding from a financial institution. She also implied that the Private Equity firm’s modus operandi was to starve her company of funds, so they can watch the business falter, allowing them to buy on the cheap.
“When the funds stopped coming, I had to put my house as collateral, and my personal guarantee is also collateral too. Apart from the money they invested, they don’t have much to lose, but I have everything to lose. When the funding never came, I invested my life savings.”
She emphasized that the modus operandi of some of these investors is, “They come, they pledge, give you some money, and stop. When the business dies, they buy at peanut.”
According to Mrs. George, the failure of the private equity firm, Alta Semper, to disburse the balance of the $18 million, hampered the operations of a once-thriving business. They paid less than half of the total sum.
“The agreement is to fund our operations without delay. The objectives are the premise of the balance funds. However, 18 months on, the balance is still outstanding. We could not meet our target, because more than half of the funds has not been released to us. We were doing well in the first year of the deal, but the DNA changed after 1 year,” she said.
She also hammered on how Alta Semper starved them of working capital, resulting in their inability to stock their shelves with drugs. Saying, “We had board meetings, they are the financial gurus. They saw the working capital and our cash flow and made no comment. I would not fight if I am not sure of winning the case. They were watching us dwindle. We needed to buy drugs on our shelves, but we couldn’t get the fund. We spoke every week, but they kept promising that they will fund me in two weeks. Our agreement indicates that we were joined at the hips, that is, they can’t make decisions without my consent and vice verse.”
Mrs. George insisted that the technical agreement she had signed with Alta Semper, required that they perform certain obligations, which they have failed to fulfill, leading to her decision to go to court.
“We signed a technical agreement, they had obligations but failed to achieve one. I can’t go into details, because we are in court. When I put it down in writing, they compelled me to retract it. When I complained about what is not going right, they stayed mute. I had no choice but to go to court,” she stated.
She also provided her own view of why the other two directors, former Chairman, Dr. Ayo Salami, and Mr. Deji Akinyanju had resigned from the board.
Saying, “The Chairman resigned last week Thursday, another Director resigned 5 weeks ago (that is my nominee Director). A day after the Chairman resigned, they swooped in when we didn’t have a constituted board. They had asked the banks to hijack our account, but they denied it, requesting board resolution, and approved minutes for the meeting. They have not been able to provide that.”
Mrs. George also claimed that the employees of HealthPlus were on her side because she is a ‘good boss’, which is why they avoided meeting with representatives of Alta Semper.
“When they called staff for a meeting on Friday, everybody ignored the call. They tried a zoom meeting, everyone ignored it. If I am not a good boss, don’t you think they would have rushed to the meeting?” she asked.
Nairametrics maintains a neutral stance in this matter. We have also reached out to the representatives of Alta Semper to get their own side of the story. We will keep you updated, as it unfolds in the coming days.
Lafarge, Nigerian Breweries, Stanbic IBTC, others top best performing stocks in Q3 2020
Nairametrics reviews the best stocks in Q3 2020, judging by their performance.
Lafarge Africa, Nigerian Breweries, Stanbic IBTC, United Capital, and FTN Cocoa made the list of best-performing stocks in the third quarter of 2020 (July – Sept’20).
The third quarter of the year was a recovery period for the Exchange, as the All Share Index grew by 9.61% to close the gap caused by the negative performance it endured in the first quarter of the year – during the heat of the COVID-19 pandemic. It also recorded a 14.92% positive growth in the second quarter.
As Company stocks is one of the popular means of short-term investments in Nigeria and a look at persistent inflationary pressures; it is imperative to assess the performances of the stocks listed on the exchange during the covid era, to ascertain the profitability of investors in this period.
To determine the best-performing stocks, we looked at the stock prices as of the last trading day in June 2020 and compared to their prices as of the last trading day of September 2020. Here are the top 5:
Lafarge Africa Plc
The Cement manufacturing company grew its stock value by as much as 50% between July and September 2020. As at 30th June 2020, the stock of Lafarge was worth N10 per unit of share but grew to N15 as at the last trading day of September – with a market capitalization of N241.6 billion.
A cursory look at the Q2 2020 financial performance, shows a 5% year-on-year decrease in revenue generated. However, a reduced cost of sales helped improved the company’s gross profit by 10% and a subsequent 78% increase in profit before tax at N19.38 billion.
June 30th – N10
September 30th – N15
Return – 50%
Ranking – First
Nigerian Breweries Plc
The second on the list is the brewery giant, Nigerian Breweries – the makers of Star Lager, Fayrouz, Goldberg, and many other consumables. It grew its stocks by 35.73% from N36.1 as of 30th of June to N49 per share at the end of Q3 2020. The market capitalization also closed at N391.8 billion as at the review period, being the second most capitalized consumer goods firm – only behind Nestle Nigeria.
A look at the Q2 2020 financials, shows that the company endured a downturn, mostly affected by the COVID-induced lockdown, which halted all social gatherings, as it posted a profit before tax of N69.8 million – 99% decline compared to N7.95 billion recorded in the corresponding quarter of 2019.
However, with the lifting of lockdown nationwide, the outlook for the Q3 and Q4 2020 appears to be positive, as investors have shown confidence in the brand, which has translated into a positive stock performance in the quarter.
June 30th – N36.1
September 30th – N49
Return – 35.73%
Ranking – Second
Stanbic IBTC Plc
The third most capitalized bank on the stock exchange is also the third on the list of best performing stocks in Q3 2020, growing its stock by 33.88% from N30.25 per unit of share recorded as of June 30th to N40.5 at the end of trading in September – with a total market capitalization of N449.8 billion.
In the same vein, the Q2 performance of Stanbic IBTC indicates an 11% increase in gross earnings, which permeates into 32.2% increase in profit before tax – from N21.1 billion recorded in Q2 2019, as against N27.9 billion in the review period.
June 30th – N30.25
September 30th – N40.5
Return – 33.88%
Ranking – Third
United Capital Plc
The financial and investment service firm recorded a 30.59% increase in its stock value, as it moved from N2.55 per unit of share as at June 30th to N3.33 as at the end of September. This growth places United Capital in fourth position, as one the best performing stocks between July and September 2020.
The investment firm displayed firm resolve against the effects of COVID-19 in the second quarter of the year – as it posted a profit before tax of N1.5 billion, as against N1.2 billion reported in the corresponding quarter of 2019. This indicates a 22.9% increase in profit.
June 30th – N2.55
September 30th – N3.33
Return – 30.59%
Ranking – Fourth
FTN Cocoa Processors Plc
A unit of FTN Cocoa shares was valued at 20 kobo as at June 30th. However, it grew by 30% to N26 kobo as at the end of trading on 30th September 2020, leaving its total market capitalization at N572 million.
Data obtained from Nairalytics – the research arm of Nairametrics, showed that FTN Cocoa has not released its financials since Q1 2019. However, the cocoa processing company was able to post a positive stock performance in the third quarter of the year to sit fifth on the list.
The company was formerly registered as Fantastic Traders Nigeria Limited, a Limited Liability Company, which was incorporated in 1991. It commenced cocoa processing business in a third-party arrangement (Toll Processing) with Stanmark cocoa processing company limited in 1995. They converted cocoa beans into cocoa butter and cocoa cake/powder, and later extended their activities to Ile-oluji, Cocoa Cooperative etc.
June 30th – N0.20k
September 30th – N0.26k
Return – 30%
Ranking – Fifth
The following stocks make up the rest of the top 10 in descending order:
6. Guaranty Trust Bank Plc
7. University Press Plc
8. Eterna Plc
9. Unity Bank Plc
10. Fidson Healthcare Plc
Bottom line: With a double-digit growth in the following stocks, Investors who bought these stocks would be delighted to see their investments appreciate during this period and will look forward to gaining more in the subsequent periods.
#EndSARS: Why Twitter topped Facebook during police brutality protests that went viral
Despite Facebook having over half of Nigeria’s social media users, why was Twitter able to top in the championing of the #EndSARS protests?
Nigerian youths had been protesting for over 2 weeks, calling for an end to police brutality with the #EndSARS hashtag on numerous social media channels among which Twitter topped.
Nigeria has a median age of 17.9, and the Nigerian youths used their tech-savvy influence to draw international attention to the brutality on protesters. This escalated after reports of the Lekki shooting which has drawn widespread condemnation from international figures such as Rihanna, Kanye West, Joe Biden, Hillary Clinton, Lewis Hamilton, Pope Francis, and many others.
The #EndSARS movement dates back to 2017, when Nigerian youths used the hashtag to share their experiences on violence and assault perpetrated by the defunct Special Anti-Robbery Squad (SARS). However, the movement only revived in early October, after a video emerged of police officers thought to be members of the SARS unit, allegedly killing an unarmed young man.
This prompted Nigerian youths to troop to Twitter, calling on the Federal Government to dissolve the notorious police unit and effect police reform, with the hashtag, #EndSARS, #Endpolicebrutality, and many others. The hashtag trended continuously on Twitter as Nigerian youths aired their pains and experiences online.
As at the end of August 2020 and according to the Nigerian Communications Commission (NCC), subscriptions to broadband or high-speed internet services in Nigeria had increased significantly to a peak of 82.7 million. However, despite Facebook having over half of Nigeria’s social media usage, it has not had the pull of Twitter in championing the social justice causes. Why is that?
Which social media platform has more Nigerians?
According to Emmanuel Dan-Awoh, SEO Analyst at Nairametrics, Twitter only commands 21% usage of Nigeria’s 82 million internet subscribers. Facebook is leading with 55.94% while Instagram and Youtube are at 5.02% and 3.72% respectively.
“The platforms are built for certain types of communication and psychological states,” Dan-Awoh says.
For Nairametrics, which social media platform provides the most news leads?
The #EndSARS protesters had a unifying motto that they had “no leaders,”. This was seen in the decentralized nature of the protests across the country due to the fast-moving nature of news spread mainly on social media platforms.
For Nairametrics, Twitter accounts for the most news leads from social media platforms despite more Nigerians using Facebook on a daily basis.
“Twitter is by far the most useful social media platform for Nairametrics accounting for more than 90% of page views and visits,” Dan-Awoh says.
Young Nigerians are consuming information larger than ever before, thanks to the internet, with Twitter being the main platform for news sharing despite having only 21% of Internet users in Nigeria. It’s no wonder that most of the Nigerian youths who championed the #EndSARS protests are also in the same demographic that consume news on Nairametrics.
Where does the Nigerian government communicate more?
Dan-Awoh says, the Federal government still communicates with Nigerians through traditional media, however, the usage of technology to pass information to citizens is growing, which can be witnessed through the popularity of media aides on Twitter including Bashir Ahmaad, Tolu Ogunlesi, and others.
“Official communication still leans more towards traditional media, but the use of social media by government agencies is growing while the use of traditional media is stagnating,” Dan-Awoh says.
“Nigerians get the bulk of their news from social media channels and from google discover app” he adds.
(READ MORE:#ENDSARS Protests: Why this is different)
So why Twitter?
“Twitter is the most effective channel for social movements because relationships on the platform are not personalized to fit with the real-life connections of its users,” Dan-Awoh says.
He added that Twitter isn’t for very personal connections compared to Facebook, and also gives its users more powers to control what goes on their news feed through the democratization and localization of trending topics, this gives users more information on their surroundings.
“The feed isn’t dictated by personal interests or contacts to the same extent as other platforms. The user also has more control over his Twitter feed due to the democratization of popular topics.
“ Twitter achieved this through Its trending vertical where the most popular topics within a locality are ranked. This serves to draw more people into a digital version of marketplace chatter. This enables the platform to be better suited for the nurturing of a herd mentality within the society. This is why Twitter as a platform is more socially and politically significant than its counterparts,” Dan-Awoh adds.
Despite more Nigerians on Facebook, the Twitter platform makes the localization of news easier to share through its trending platforms, which gives young Nigerians a “concert view” perception on growing issues in the country. With a young population eager for information, it’s no wonder that News Media gets a lot of their leads from Twitter compared to Facebook as the news would be better shared on Twitter.
The increasing popularity of government media aides, especially on Twitter is a sign that we may be heading to a new way of government communication with citizens through the internet.
However, Facebook should not be ignored in this as more Nigerians are now aware of how changes can be brought to social justice and may use whatever platform where they are heard to discuss vital issues.
Guinness Nigeria Plc jostles to improve from its insipid 2020 financial year
In the 2021 financial year, the task before the company is to drive its strategic objectives to bring the company back to profitability.
Guinness Nigeria Plc has started its 2021 financial year with a loss, just like the company did in 2020. However, this time, the value of the loss adds up to N841 million for the opening quarter. In 2020, it was N370 million, which set the tone for what eventually degenerated into a truly horrible and uninspiring financial year. A year that saw loss position in the aggregate 12 months period peak at N12.6billion.
Apparently, all that could possibly go wrong with Guinness, did go wrong. From what in retrospect, turned out to be an over-ambitious outlook at the start of the year, to the effects of not giving immense attention to controllable costs, rise in inflation with its resultant pressure in decreased consumer spending, and the crippling effects of the unprecedented COVID-19 pandemic; no company could have asked for worse.
However, the horrendous performance was not peculiar to Guinness Nigeria alone. The results from its competitors, such as the International Breweries Plc, and Nigerian Breweries Plc, amid appalling industry figures recorded, proved that 2020 has been a tumultuous year indeed for all companies operating in the brewery manufacturing sector.
The analysis of FY 2020
How poor was the 2020 FY performance of Guinness Nigeria and what can be inferred from its Q1 2021 reports? For a company in the habit of declaring dividends especially after the N5.5billion profit in 2019, how did the company move from that profit margin to a loss of N12.6billion just 12months after?
- Profit declined by 129.1% from N5.5billion Profit after Tax in 2019 to N12.6billion Loss after Tax in 2020. This Steep decline was evident in all arrears from top-line to bottom.
- Gross profit down by 16.9% to N33.33billion in 2020 as against N40.13billion reported in 2019
- Revenue plunged 21% to N104.41billion in 2020, from N131.5billion generated in 2019.
- Cost of sales did show some improvement, moving from the N91.4billion expended in 2019 to N71.1billion in 2020 – a 22% decrease.
- Administrative cost continued the rising trajectory to N14.3billion in 2020 from N9.9billion in 2019.
- Finance cost rose to N4.5billion from N2.6billion in 2019, while finance income declined from N750.9million to N301million in 2020.
Speaking on 2020 results, Mr. Baker Magunda, Managing Director/CEO, Guinness Nigeria Plc said,
“The last quarter performance of fiscal 2020 was significantly impacted by restrictions due to COVID-19, exacerbating the already challenging economic environment. Closures of on-trade premises (bars, lounges, clubs, and dine-in restaurants), which represents the major part of the consumption occasion for our products and bans on celebratory occasions, impacted sales.
“Demand was also impacted by reduced consumer income, unemployment concerns due to the shutdown of a large number of businesses, and increases of VAT and excise throughout the year.”
Magunda further explained that, “Distribution was impacted by the ban of inter-state, and in some cases intra-state travel. Although, Management worked diligently with regulatory authorities to minimize the impact, this hampered our distributors’ ability to restock and have our brands available for purchase.”
The analysis of Q1 2021
In the 2021 financial year, the task before the company is to drive its strategic objectives to bring the company back to profitability. The Chairman, Mr Babatunde Abayomi Savage, recognizes that this would be no stroll in the park, as he affirmed that despite predictions that the coming year will be challenging globally due to the new normal, “we believe we have experienced our full share of the impact and are now geared to go back to profitability.”
The opening quarter for 2021 (July-September) saw improvements in sales volumes on the back of eased restrictions from the COVID-19 necessitated lockdown.
- Revenue posted is N30.02billion, 11.64% increase from the N26.89billion recorded in the corresponding period of 2020.
- However, Cost of sales worsened by 21.1%, increasing from N18.9billion in Q1 2020 to N23.01billion in Q1 2021.
- Marketing and distribution expenses, as well as administration expenses, showed marginal reduction, depicting management interest in controlling these variables.
Generally speaking, results for the opening quarter show signs of improvement, but the tax component was the primary factor responsible for masking the progress obtained in Q1 and eroding promising signs.
With the gradual re-opening of its previously closed company buildings in Benin City, and the shift in focus from the largely underwhelming lager segment to investing more in spirits, it will be interesting to see how this impacts volumes and revenue in subsequent quarters, despite the apparent economic conditions.