₦airaland Forum

emmanuelewumi:
The CEOs salary increased from N42 million in 2018 to N147 million in 2019.Higher than the pay of the CEOs of FBN, Access Bank and UBA, about the pay of the CEO of Zenith. This is a red flag for a struggling business that is about to be turned around

The new core Investors might not be different from the guys who wrecked Oando.

Investors should be cautiously optimistic, avoid company's that are managed by Wizkid young CEO.

In another news the CEO worked for some years at Ocean and Oil

For about 6 years. I am sure many people missed that one. This is probably the first acquisition of Themis Capital and will be a guinea pig for them.

The focus is not so much on the loss figures for two years in a row but for the so called corporate restructure and where it leaves retail shareholders. I am still trying to figure out a way forward after they sell the third portfolio coy either this year or early next year. Asset stripping in motion. For the short and mid term its a no-no. if it survives to the long term it may be a different story. If you must have a relationship with UACN, go for one of the subsidiary in paint manufacturing. The other cash cow is not quoted so you can't access it.

If you know how to read financial statements, pay close attention the CFS and notes to the account.

Probably my last post on UACN before people think there is anything personal.

"Jijoist" may still have a winning proposition albeit a very unfavourable risk adjusted returns.

Act as the spirit leads.

Mcy56:
Prof, not talking about UACN o, its exempted.
Ardova too. That stock is a big disappointment. Since they did magomago during the offer purchase and changed name, it's been falling.

Don't take your eyes away from it yet. The acquisition and share purchase period was a wrong time to look at it because of many moving parts. Its just approaching a healthy value zone. Sectorally, are you happy being invested in oil marketing sector?

PETERiCHY:
UAC of Nigeria Plc has released its audited full-year financial report for the period ended December 31st, 2019. The report showed that the conglomerate made a N9.2 billion loss. See the key highlights below.

UACN’s Revenue: The group’s revenue for the period stood at N79.2 billion as against N70.4 billion during the comparable period in 2018. This is indicative of a 12.4% increase, year on year.

The company’s cost of sales, however, increased by 9.3% to N62.5 billion, up from N57.2 billion in 2018.

Profit Before Tax: for the period under review, UACN’s profit before tax stood at N7.4 billion, thereby marking a 22.7% increase compared to N6 billion in 2018.

Similarly, the group’s profit after tax from continuing operations increased by 26.1% to N5.3 billion, up from N4.2 billion during the preceding financial year.

Loss for period: However, UAC of Nigeria Plc reported a loss of N9.2 billion during the period under review. Note that the group had also ran at a loss of N9.5 billion in FY 2018.

https://nairametrics.com/2020/04/19/uac-of-nigeria-plc-reports-n9-2-billion-loss-for-fy-2019/

BARGAIN HUNTERS TAKE NOTE!

You should be more concerned about the future business prospects for of UACN for guidance. The losses for those years are for spinoff of UPDC and change in status from majority shareholder of MDS logistics which they cannot now consolidate anymore.

Paints and Packaged foods/beverages businesses which generates most of the profits are still there. My take is that if you have been looking at their financials you can almost tell with certainty which business segment will be sold in the next 12 months. The guys need cash and they need it like yesterday. That expected third sale also has the potential to create a negative contagion in the remaining businesses.

Let me finish reading the statements first.

onegentleguy:
Great YE 2019 report from UACN...
Woeful report from UNILEVER...

On the latter, it clearly looks like the decision to engage a solitary...... at the end of H1 2019, following...... is beginning to show its adverse effects.(highlighted it here back then)

On the former, would like @ TLAX to note the post above.
...the content is looking likely to play out.
NOT surprised at the 10k dividend declaration. Any Jack who understands and can relate the thing about 'past and present position' to 'underlying growth' shouldn't have expected more.(actually thought there'll be none)
VALUE in the making !!
We continue to love UACN. ...BUY !!

On UNILEVER, I think that any price rise(possibly aided by current market sentiment) should be seeing as an opportunity for an escape route !!
...unless ur an investor with a long term horizon.

Analysis and details later !!

I will comment after i take a detailed look at UACN financials.

wuwu2:
Well, based on my analysis, the current recommendation will be a hold rather than a buy.
Definitely not a sell
In any case, stop loss at 13.48
NB: strictly for academic purposes

If you are looking at not holding beyond 2020, N18.90 (+/-5%) should be a good region to sell.

For those intent on chasing price i wouldn't buy Zenith at >N14.27. I said "I" so individual returns criteria should drive this figure.

Not an advisory.

1kinggy:
Bunmi oni did me strong thing with his stunts at Cadbury.

https://cashmoneyfocus.com/another-look-at-cadbury-nigeria-plc/

They have since recovered from the Bunmi Oni saga of 2006. The company still has some strategy and portfolio issues to deal with and its not related to Bunmi Oni but rather to the Mondelez Group.

April 15

emmanuelewumi:
This is wrong, check out the date July 2019.

Based on last year's dividend zenith will give you a dividend yield of about 25% at the current price

From what i see in that picture, it appears to be average yield for a number of years.

Godlylifeoneart:
Rabbi, So you are not aware that all the top banks in Nigeria are highly exposed to oil and gas sector.
The implication of this is that the banking sector might be the first casualty of what we fear most(Recession )
First bank has not recovered from the NPL of 2012/14.
Already, Zenith and GT have been downgraded by Fitch.
No one can predict what will happen next. However, we must remain invested.

Check the quarterly investor call presentations of banks to give you a fair picture of their oil and gas exposures. Its on their respective Investor Relations pages.

onegentleguy:
If I have to answer to everything in ur post in bits, it would be way too long, so I'll just take on some bit in between.

1st off, the 1st paragraph in ur post is not far from the truth as it highlights the present red flag in CAP.

On point No 1, u may need to do a bit more dig on ur analysis though.
U are assuming that the core investors(not only thermis) were unprepared of the possibility of a lukewarm interest from shareholders on UPDC rights, but probably forgot to note how the coy(UPDCs) current ASSET BASE, relates to the RIGHTS PRICING of N1/share(compare AGPR and NAV to EM)
And do u truly really think the core investors are or will be cash hungry over the rights. ...not sure u know them.

Hear this; There is a reason why the RECAPITALIZATION exercise preceeded(came before and not after) the RIGHTS ISSUE, and why the RESTRUCTURING will come after the RIGHTS ISSUE.

...a brief;

It's important to note that UPDCs travail was majorly the result of overburdened interest bearing loans. ...which UACN(being the parent coy) had to 'house'.
Some of us forget that;
1) Post rights issue, UPDC will have almost zero debt.(both short and long term) except for a circa N4B+ long term bond.(the rights takes care of this)
2) Post restructuring, UPDC will be allocated an asset with a face value equivalent to its % holding of the NAV of UPDC rights as well as other discretionary benefits.
If u understand the 2 points(read btw the lines), then u'll see why the core investors(again, not just thermis) would indeed be well prepared and will gladly take up the rights.

On point No 2 and 3, well, I totally agree with u on the part in bold. I personally think that Portland paints should've been merged with CAP long before now given their similar business niche.
However, if there are any mergers or even divestment, it will be because the parent coy(UACN) is looking to focus its strength on business segments where it believes it can drive better margins and not ordinarily just for the sake of needing cash. After all, any cash raised from any such move would still be ploughed back into the business. This was part of the coys roadmap to turnaround and growth.(guidance was always given on that line)

On point No 4, that PFA has been liquidated(sold)
The arm was classified as a disposal segment held for distribution to owners of the parent coy in the 2018 calendar yr.

Finally, yes like u, I also do not expect UACN to pay any dividend for the 2019 calender yr.
The coy is presently at an inflection point to growth, so it makes sense to want to preserve cash for that purpose and more. ...but then again, the BoDs might still decide to pay out something no matter how small.

All said, I still maintain that UACN is a strong BUY even at the current price. ...in fact, accumulate !!
I have done so many past analysis, including a breakdown of the accrued benefits(to UACN shareholders) from the unbundling using the SOTP valuation method and other key metrics here, so not much to say.
It will do u a lot of good to take an in-depth look at UACN' FP in the last 6 quaters and compare all key lines. Dig deep(including the NTS) on all reports leading up to their 2018 YE FP and compare with every trailing quarterly report to date.

I need not tell u why the core investors will proceed to ensure the full success of UPDC rights...
or why the insiders and BoDs have at one point or the other moped up UPDC REITS and especially UACN stocks from the floor.
Their AEP for the latter(UACN) currently stands @ circa N10+.

I recently bought more after selling previous holdings at a premium.
And quite frankly, I'll be more than glad if it drops a little more so we can increase our stake.
Time will put things in their right perspective !!

Interesting perspective. The jury is still out on this one but "time" will make things clearer.

emmanuelewumi:
Concerning UNICO PFA, they have sold that subsidiary


Managing and growing a business is quite different from punching calculators, making projections and analyses which Private Equity investors are known for

You are correct on bolded. The operation has even been shut down.

Its going to be a long night for UACN. That's my take.

http://www.nse.com.ng/Financial_NewsDocs/29525_CAP_PLC_FINANCIAL_STATEMENTS_MARCH_2020.pdf

For the first time in many years (at least, back to 2013 where i stopped checking) Chemical and Allied Plc will not be paying a dividend. The official reason given for this in the company's financial statements was "Economic Uncertainties related t the Corona Virus". The financial result itself was not bad in view of economic realities as the company recorder per share earnings of N2.49 for 2019 compared to N2.90 for 2018. In 2018 they paid N2.90 as dividend meaning everything earned was paid out. Investors should watch this space because since then, ownership of parent UACN has changed hands to Themis Capital, and this could signal a change in group dividend policy at least for the short term.

In the short to medium term what are the options open to Themis Capital for its corporate structure re-especially in view of the challenged rights issue for UPDC with fate still unknown:

1. The need to press on with the unbundling of UPDC and following tepid interest from other shareholders, they will look at options of taking up these rights rather than have the exercise fail. What this means is that Themis will be cash hungry and there could be a second phase of the unbundling or this first phase may be delayed for longer till there is a clear way forward for getting UPDC off their portfolio.

2. Expect more corporate restructure especially in their Chemical business. They currently own 51.4% of CAP and 51% of Portland Paints. Both are in same line of business but while CAP is an industry leader, Portland paints has largely underperformed since they acquired shares in the company from Lafarge WAPCO in 2013. The options before them are either to sell Portland paints and raise much needed cash, or consolidate both companies. CAP has the technology, product license, selling and distribution intellect and Portland paints can benefit a lot from these. Also, UACN will be looking to optimize the cost of the expatriate CEO they recruited for CAP in August 2019 which pushed up CEO cost from N15.8 million in 2018 to N54.66 million in 2019 even though that CEO was on ground for just 5 months. The need for cash will determine the course of action within the next 18 months.

3. In August 2019, UACN sold 8% of its stake in MDS Logistics to Imperial Logistics thereby increasing Imperial's stake in the company from 49% to 57% and leaving UACN with 43%. Expect such corporate actions for the remaining group companies especially Grand Cereal and Livestock Feeds as i doubt Themis Capital will want that level of exposure to agriculture which in not there forte.

4. UNICO Closed PFA will survive and i believe as UACN transits to a Holding Company with minority but significant stakes in quoted companies, we may see them venture into financial services etc. I do not know if PenCom is disposed to changing licencing for PFAs but i expect Themis Capital to try for general PFA license which will be a viable vehicle for them to paly in the find management sector.

Caution is advised for retail investors in UACN and current group companies. The quest for cash is going to drive a lot of their actions going forward and options before Themis Capital is to take on much more leverage in balance sheet of UACN and portfolio companies or simply strip and sell off some of the assets of the companies. UACN has lots of these across the federation and beyond.

As for dividends, i do not believe UACN will pay any dividend for 2019 operations. They have ample reasons, real and imaginary not to....but time will tell.

Biafran4life:
This was the person making fun of me about my investment.A pouper and a scammer.And some saw sense in him because he made a bogus prediction about some stocks which only unforseen health/oil war made it a reality.He then started digging them up for this purpose.It Is not only 20 percent a month .Why not 100 percent ?

Lol....but he called it right. It may or may not have been random but he was right.

Northeastern:
According to your previous posts, you make more than 20% in a month, why are you recommending someone that you are better than?

Aye le. I have been abundantly gracious to not only rebuke you, but also show you the way out - please refer to my previous responses to your when started this your get rich quick by risking people's money.

Your problem is psychological and it is not unrelated to the previous losses you have suffered in the market. If care is not taken, this might be what would end your life on earth. I am talking from experience - I know people that have gone to the world beyond with this your mentality.

Past losses does not increase the chance of success on your next trade. You will never achieve what you could not do with your own money with other people's money. The end result is not always good.

Baba we miss your posts o, ex-meshpips. Try and post more of your wisdom so we can cross fertilize

Mpeace:
UaCN: in the light of the spread in corona virus infections, do you see the unbundling going ahead any time soon?

In truth, i expect significant delays to that unbundling and other plans they have, and its not just because of Corona. I will try to post some opinion about the group later today.

onegentleguy:
MTN GROUP will push on with a plan to reduce its majority stake in the wireless carrier’s Nigerian business, though turmoil caused by the coronavirus may require the sale to be done in smaller chunks than anticipated.

MTN is disposing of part of its largest division after a series of disputes with Nigerian authorities, most recently over tax payments and the withdrawal of cash from the country. The plan is to sell about a 15% stake to local investors, reducing MTN’s ownership to about 64%. MTN Nigeria Communications Ltd. was listed in Lagos last year, and is the country’s second-biggest publicly traded company.

MTN expects an increase in data usage as more and more of its markets go into lockdown due to the outbreak of the coronavirus.

“We want to make sure that our networks have resilience and capacity,” Mupita said. “We are looking at where we can drive broader coverage.”

https://www.bloomberg.com/news/articles/2020-03-31/mtn-moves-ahead-on-nigerian-stock-sale-with-markets-in-turmoil

MODIFIED

This is partly to meet the free float requirement as agreed with NSE and SEC before listing. Many other companies such as Union Bank, Champion Breweries etc. have not complied with this free float requirement but you know when it comes to MTN, everybody eyes go red .

Company remains a great bet as is but folks should watch out for lower pricing before jumping in just to create better MoS.

In 2020 results should adjust for lower data cost regime as lower data cost should generate increase data usage. Hopefully, soon, Bank's opposition to CBN giving it a proper "Payment Service Bank" license to do Fintech should fizzle out and it should have another healthy stream of income. Waiting in wings to capitalize on this should be its strong agent network and spread. Good investment in the medium term but certainly not short-term.

http://www.nse.com.ng/Financial_NewsDocs/29531_INTERNATIONAL_BREWERIES_PLC._FINANCIAL_STATEMENTS_MARCH_2020.pdf

If you are not here yet, why go in?

But note...my take is that this is a distressed stock of an otherwise "good company" that got its funding structure and marketing strategy wrong. It still has a strong product portfolio and k believe the new management will pay a lot of attention on the value segment of the market where it appears to be thumping NB.

After the rights issue which i understand was mostly taken up by the parent company, i truly expect this company to delist within 18 months. However, these are just my thoughts and time will tell.

PETERiCHY:
How can you claim to be a trader and still remain in a trade after a whooping 20% loss
let alone a 60% loss

Any trader who waits till his loss in a position gets to 20% is a freshman or wannabe. I don't believe anybody will set stop loss at 20%.

A fundamental investor can comfortable sit on paper loss of >20% knowing he was a long runway in years to recover and make money.

http://www.nse.com.ng/Financial_NewsDocs/29533_NEM_INSURANCE_PLC._FINANCIAL_STATEMENTS_MARCH_2020.pdf

For NEM Faithfuls food is done.

No obvious dividend figure in financial statement but looking at the profits and movement in reserves i have a computed a dividend figure of 13k/share which is same figure for last year. So dividend will be static.

I am not an insurance sector follower but quick take on this result which looks average are:

Positives
- 34% increase in gross premium income (i.e. assuming the are underwriting the right risks and pricing appropriately)
- Fees and commission income increased by 58%
- 8% drop in investment income. Considered acceptable in view of what happened in the market in H2 2019

Negatives
- disproportionate increase in reinsurance fees by 82% compared to GPI. Maybe Reinsurers think they are not underwriting right risks or pricing them appropriately. Most likely the latter in view of cut throat industry competition.
- PBT declined by 29%.
- Tax credit took PAT 18% higher than previous year.

Generally this is one of the better managed companies in the insurance sector. Caution should be watchword for retail investors. This sector is expected to face significant headwinds perhaps more than other industries, in 2020. For dividend lovers, DY @ 13k/s is in 7.2% range.

Mcy56:
Lol. Just like week I mentioned that nobody remembers the pharmaceutical coys. Maybe this is their time.
There were cross deals in Meyer too, people should just be careful of this.

Glaxo, Neimeth on full bid

Neimeth has been on full bid for about 7 trading days now. I think i know why but not sure yet.

Is the money from CBN in form of grants or advance payment for drug purchase?

DexterousOne:
@Northeastern @nna777 and others
Please I have this question that keeps bugging me for the couple of years I have been in this market


Why are we too exposed to the foreign investors (FPIs) such that when they start pulling out, the NSE feels the heat?


Is it that this country is not rich enough to have more and bigger institutional investors? And individuals of course
Or is it that the general interest is just not there among Nigerians?


Just thinking out loud

I think we should find a way to reverse this reality

FPI are big players in the market and they all appear to use same screeners to decide when to enter or exit. The quantum of money they flow-in or flow-out at same time is such that it must have an impact on the market. Also note that there are local funds invested in the market that track the actions of these FPIs and do likewise. I believe machine trading is still minimal here but may grow not too long from now and this will worsen the impact of the mass action.

IYGEAL:
He even showed a snapshot. I still doubt.
Only him has said he was paid. Seems odd. Very odd.

How is this even possible?

RabbiDoracle:
There are lots scenario that could play out:

- Resolution of Saudi - Russia tussle before 1st of April when both sides said they will start flooding oil around the world.
-US stockpiling to fill theur strategic reserve which Trump has mentioned
-Starting up of production in China and South Korea at an increasing pace.
-Peaking of cases in Spain, Italy, Germany and other EU states. This will tell investors that the crisis is almost over and that economic restart will be focused on.
-Peaking of cases in the US.

I read somewhere that the stock markets pick up at least two quarters before economic indices show that the economy is on the path to recovery.

I have a feeling that word defensive stock is confusing people o people are confusing it with ability to defy price trend so i have gone to Investopedia, an authority on this type of matter and this is what it says a defensive stock is:

What Is a Defensive Stock?

A defensive stock is a stock that provides consistent dividends and stable earnings regardless of the state of the overall stock market. There is a constant demand for their products, so defensive stocks tend to be more stable during the various phases of the business cycle.

I am sure more than half of the quotes attributed to this guy is not true. This one is funny though.

Intendy:
Nigeria Energy Sector Fund (NESF) Closure of Register for Year Ended 31 March 2019

Proposed Dividend: N75.00 Kobo Per Unit

Proposed Bonus: Nil

Qualification Date: Thursday, 19th March 2020

Closure Date: Friday, 20th March 2020

AGM Date: Not Applicable

Payment Date: Monday, 6th April 2020

Which board of NSE is this quoted?

Mills55:
Please Ma'am, will I still qualify for Gtb dividend if I buy tomorrow? Since tomorrow is the markdown. As it stands, I gave my analogue stockbroker instruction to buy, but I don't think my bid was successful. [b]Cashcraft [/b]can really delay.

Agbalowomeri:
The people that drafted these statements are not good at lying at all

Access Will not be happy about this though. This was just hijacked from them. Apparently SIZE matters to many people.

(N'm) Gross Earanings PBT (2019 Dec) PAT TA (2019 Dec)
Access 666,753 115,378 103,187 7,143,610
Zenith 662,251 243,294 208,843 6,346,879
Union 155,545 24,844 19,875 1,872,231

Access + Union 822,298 140,222 123,062 9,015,841
Zenith + Union 817,796 268,138 228,718 8,219,110

Agbalowomeri:
They are giving us Access-Diamond game play Lol

As in eh....

http://www.nse.com.ng/Financial_NewsDocs/29408_UNION_BANK_NIG.PLC._CORPORATE_ACTIONS_MARCH_2020.pdf

http://www.nse.com.ng/Financial_NewsDocs/29405_ZENITH_BANK_PLC_CORPORATE_ACTIONS_MARCH_2020.pdf



Synchronized releases to the Exchange. They are trying very hard not to lie as in the Access/Diamond Merger. Truly they may not have submitted or received a "Binding Offer" as such is usually submitted after a due diligence exercise.

What is submitted first of all is a "Conditional, non binding offer".

Eventually no matter how you hide pregnancy, it must show.