UAC of Nigeria Plc began its 2025 financial year on a mixed note, reporting a pre-tax profit of N11.1 billion for the first half ended June 2025, 25% lower than the N14.95 billion posted in the same period last year.
Group Finance Director Funke Oladio told investors the drop was largely due to the absence of the hefty foreign exchange gains booked in H1 2024.
FX gains fell to N2.6 billion, compared with the exceptional N10.7 billion recorded a year earlier. Stripped of this effect, underlying performance remained strong.
Revenue climbed 33% year-on-year to N110.4 billion, representing 56% of the company’s 2024 full-year turnover.
Cost of sales rose at a slower 27%, lifting gross margin to 26% from 22% a year earlier — a reflection of improved pricing discipline, production efficiency, and better cost control.
Over the past five years, UACN’s profit before tax has grown at a CAGR of 38%, totalling N42.72 billion.
In 2024, PBT more than doubled to N25.55 billion from N12.3 billion in 2023. EPS has expanded at a 48% CAGR in that period, though the dividend payout ratio has trended lower; the company has maintained a N0.22 dividend per share for two consecutive years.
Balance sheet and cash strength
UACN’s balance sheet shows room to scale. Borrowings jumped 51% to N41.48 billion, now 27% of total assets, while cash and cash equivalents rose 61% to N40.59 billion.
“We are pursuing growth, but in a disciplined way. Yes, we’ve taken on more leverage, but we’ve also improved liquidity and are operating with higher efficiency,” said Oladio.
Operating cash flow in H1 2025 came in at N10.8 billion, comfortably ahead of net profit of N7.4 billion — signalling strong earnings quality and capacity to fund expansion without over-reliance on debt.
A bold bet on CHI Limited
The results came shortly before UACN announced the acquisition of Chivita|Hollandia (CHI Limited) from the Coca-Cola Company, a landmark FMCG deal still awaiting regulatory approval. CEO Fola Aiyesimoju described it as “years in the making,” not an opportunistic grab.
The move will bring CHI’s juice and dairy brands into UACN’s portfolio alongside Gala, Supreme Ice Cream, and Swan Water, potentially vaulting the group into the top tier of Nigeria’s consumer goods players.
Analysts see significant cross-selling opportunities, supply chain efficiencies, and brand synergies — but caution that integration will be the key determinant of success.
Investor insight and market reaction
Since the July 30 announcement, UACN’s share price has climbed from N73 to N83.60, taking year-to-date gains to 166%.
- The stock now trades at a P/E of 19x, P/S of 1.09x, and P/B of 3.52x — valuation levels that suggest the market is pricing in more than just steady organic growth.
- The CHI deal could unlock significant value for UACN, but execution will be everything, noting that the market now expects results, not just promises.
With the stock in a higher valuation league, management faces heightened pressure to prove that investor optimism is well placed — and that this acquisition can power the next chapter of growth.
