Published On: Mon, Oct 19th, 2015

Forte Oil and Access Bank are best stocks for the week

DENNIS OKONNE  |  

1.Forte Oil Plc: Recently, Mercuria Energy Holdings SA, acquired 17% of its equity valued at $200 million dollars and through this investment, Forte Oil has secured additional working capital to continue its growth strategies and well positioned to dominate downstream sector, upstream services, power generation and upstream exploration in Nigeria. FO is foremost indigenous major marketer of refined petroleum products with a strong presence in the thirty-six states of Nigeria and Abuja.

With well over 500 Forte Oil owned, dealer-assisted and dealer-developed retail outlets spread across the country, a major fuel storage installation at Apapa, Lagos, another major storage depot at Onne, Rivers State, an aviation joint users hydrant in Ikeja, Lagos, and joint aviation depots in Abuja, Port Harcourt and Kano FO is an industry giant.

The company’s growth in revenue is attributable to the significant increase recorded in the sales of its fuel products segment, comprising Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), Aviation Turbine Kerosene (ATK); as well as Production Chemicals; Lubricants and Greases.

Apart from growth in its market share, there was a tremendous improvement in operational efficiency and optimized distribution and logistics drove down cost of administration. The newly acquired Power Plant also contributed significantly to the revenue stream.

Financial Performance: Revenue grew from N128.028 Billion in the preceding year to N170.127 Billion, translating to an increase of +32.88%. Profit before tax slumped from N6.524 Billion previously to N6.006 Billion, a decrease of -7.94%.

Similarly, its profit after tax dipped by -10.95% from N5.004 billion to N4.456 billion.  Dividend pay-out is N2.50 per share and bonus 1 for 5 as against N4.00 per share appropriated last year. Share in Issue = 1,080,280,628 shares. Current price is N263.99 kobo per share. 1 yr High price is N264.99 k while 1 yr low is N152.00.

In its second quarter 2015 result, its turnover slumped from N79.606 billion in the preceding year to N61.168 billion, a decrease of -23.16%. Similarly, its profit after tax also dipped by -19.25% from N3.134 billion previously to N2.530 billion.

2. ACCESS BANK Plc: The bank commenced operation in 1989 and was listed on the Stock Exchange same year.

Its principal activity continues to be the provision of money market activities, retail banking, granting of loans and advances, equipment leasing, corporate finance and foreign exchange operations.

A well focused new generation bank with a strong liquidity position and a stable board, tested and proven professionals piloting the affairs of the bank.

 Agusto & Co (credit rating agency) has upgraded Access Bank’s credit rating from “A” to “A+” with a stable outlook.

 The rating reflects the full synergy of the merger with Intercontinental Bank Plc (ICB), which has propelled the bank to be one of the Systematically Important Banking (SIB) Institutions in Nigeria.

This rating recognizes the bank’s liquidity position, satisfactory capitalization and risk management framework.

The Bank’s extensive branch network has created improved visibility among the banking population and has translated to good market share across the key market indicators.

 

Financial Performance: Predicting that Access Bank will move higher in 2015 is based on both performance and momentum.

 In its audited result 2014, its Gross Earnings rose from N206.891 billion in the preceding year to N245.218 billion, translating to an increase +18.5%. Similarly, its profit after tax also grew from N36.298 billion previously to N42.976 billion, an increase of +18%. Consequently, a final dividend 35 kobo per share was proposed for sharing amongst its shareholders, making a total dividend of 60 kobo per share, having paid out an interim dividend of 25 kobo per share earlier.

Price resurgence is as a result of its outstanding second quarter 2015 financial profile. Here, its Gross Earnings rose from N117.932 billion in the preceding year to N168.642 billion, translating to an increase of +43%. Similarly, its profit after tax jumps to N31.287 billion from N22.587 billion, an increase of +38.52%. Consequently, it appropriated a mouth-watering interim dividend of 25 kobo per share. Current Market Price is N5.06 kobo, and undervalued.

3. Chemical & Allied Products (CAP) Plc: the Company is a subsidiary of UAC Nigeria Plc, which holds 50.09% of its equity. It evolved from Imperial Chemical Industries (ICI) Plc in 1957 under ICI Exports Limited. In 1965, ICI Exports limited changed its name to ICI Nigeria limited. However, in 1977, ICI Nigeria limited sold 60% of its shares to Nigerian public as a result of the indigenization decree, and change its name to Chemical and Allied Products Plc. in 1992, the remaining 40% shareholding was acquired by UAC of Nigeria and it currently holds about 50.09% of the equity. Today, CAP Plc operates in coatings business and provides a wide range of quality products and services, and its brands have become household names.

The principal activities of the company are the manufacture and sale of paints. It is an ISO certified company, operating in coating business and providing quality products and services to their numerous customers. Products are strategically distributed through Dulux colour Centres (DCCs). DCC is an innovation introduced to bridge the gap between Dulux and its consumers. It’s issued and fully paid share capital consists of 700,000,000 ordinary shares of 50 kobo each, out of which, 350,652,700 units were held by UAC Nigeria Plc.

Financial Highlights: it posted an impressive performance in its audited result for 2014 where its turnover rises from N6.195 billion in the preceding year to N6.987 billion, translating to an increase of 13%. Similarly, it also grows profits by 17% to N2.442 billion from N2.086 billion previously. Consequently, the board proposes and got approval at its recently concluded Annual General Meeting, a final dividend of 85 kobo per share, having appropriated an interim dividend of N1.50 kobo per share earlier, making a total dividend of N2.35 kobo per share in 2014. The company’s impressive performance was linked to its aggressive and innovative marketing campaigns. It has also made significant expansion of sales outlets by opening 11 new Dulux shops across the country.

In its second quarter 2015 financial profile, its Gross Earnings dips from N3.349 billion in the preceding year to N1.750 billion, translating to a decrease of -47.74%. Similarly, its profit after tax slumps to N382.546 million from N744.874 million, a decrease of -48.64%. Current Market Price is N38.00 kobo per share.

4. Ashaka Cement Plc: The Company is a subsidiary of Lafarge SA and is involved in the Manufacturing and Marketing of Cement Products in Nigeria. The Company’s operations are organized into three Divisions: Aggregates and Concrete, Cement and Gypsum. It is active within the construction/building materials sector of the Nigerian Stock Exchange.

Ashakacem Plc was incorporated on August 7, 1974 as a private limited liability company with primary activities as manufacturing and marketing of cement products. It was later converted to a public company and its shares were subsequently quoted on the Nigerian Stock Exchange (NSE) in July 1990. Ashaka was fully integrated into the Lafarge Group in July 2002 after the acquisition of Blue Circle Industry Plc of the United Kingdom (BCI, UK) by Lafarge SA, France. Lafarge Group remains the key shareholders in Ashaka with 50% ownership via BCI and 0.16% via Lafarge (Nigeria) limited.

This puts the total shareholdings of Lafarge Group in the company at 50.16 per cent while the remaining percentage (49.84%) is held by Nigerians (private individuals and institutions). It issued and fully paid up capital consists of 2,239,453,125 billion ordinary shares of 50 kobo each.

Financial Highlights: In its audited result, its revenue slumped from N21.694 billion in the preceding year to N21.133 billion, translating to a decrease of -2.58%. However, its profit after tax quantum leaps by +92.64% from N2.616 billion to N5.040 billion. Consequently, a dividend of 45 kobo per share was appropriated from 42 kobo per share last year, an increase of +7.14%.

In its second quarter 2015 result, its turnover dips from N12.329 billion in the preceding year to N10.743 billion, a decrease of -12.86%. However, its profit after tax grew marginally from N3.518 billion previously to N3.550 billion, an increase of +0.93%. Current Market Price= N23.00 K.

5. NEM Insurance Plc: started business in Nigeria in 1948 through the agency of Edward Turner & Co. it was incorporated as a public limited liability in 1970 and was quoted on the Nigerian Stock Exchange in 1989 following the privatization by the Federal Government of Nigeria. The company is principally engaged in the business of general insurance activities. Following the recapitalization exercise, it merged with Vigilant Insurance Company limited to transact all classes of general insurance. The company has expanded its operation to the West African sub-region and now has a subsidiary in Ghana since 2009.

Financial Highlights: In its audited result, its revenue rose from N8.933 billion in the preceding year to N9.266 billion, translating to an increase of +3.73%. Similarly, its profit after tax quantum leaps by +286.02% from N395.060 million to N1.525 billion. Consequently, a dividend of 6 kobo per share was appropriated same as last year’s.

In its second quarter 2015 result, its turnover grew from N5.804 billion in the preceding year to N6.428 billion, an increase of +10.74%. Similarly, its profit after tax leapt from N1.090 billion previously to N1.582 billion, an increase of +45.13%. Current Market Price= N0.65 K.

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