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Published On: Wed, Jan 20th, 2016

Nigerian Breweries and UBA are best stocks for the week

DENNIS OKONNE|    Based on prior prices, volume data, dividend payout and other fundamentals which include company’s growth, revenues, earnings, management and capital structure, the following stocks are likely to appreciate in price this week:

  1. Nigerian Breweries Plc: This is the pioneer and largest brewing Company in Nigeria and it was incorporated in 1946. This first brewery in Lagos has undergone several optimization processes and as at today boasts of the most modern brew house in the country. The Company was listed on the floor of The Nigerian Stock Exchange (NSE) in 1973. The issued and fully paid-up share capital of the Company is 7,562,704,432 ordinary shares of 50 kobo each. Nigerian Breweries Plc has a rich portfolio of high quality brands. Star lager beer, and Gulder lager beer. Maltina and Amstel Malta are the nourishing malt drinks. Legend Extra Stout; Heineken lager beer while Fayrouz, the premium non-alcoholic soft drink, and Climax, energy drink; while Goldberg lager, Malta Gold and Life Continental lager entered in 2011 and “33” Lager beer.

In October 2011, it acquired majority equity interests in Sona Systems Associates Business Management Limited, (Sona Systems) and Life Breweries Limited. Sona Systems’ two breweries in Ota and Kaduna, and Life Breweries in Onitsha have now become part of Nigerian Breweries Plc, together with the three brands: Goldberg lager, Malta Gold and Life Continental lager. In 2014, it merged with Consolidated breweries makers of “33” lager brand.

Financial Highlights: it recorded an impressive audited 2014 result and this performance has rekindle investors’ confidence in the company growth trajectory and in the ability to sustain its return on investment to its shareholders at the year end. In its audited result, it’s Profit after tax slide to N42.520 billion from N43.080 billion in its preceding year, translating to a decrease of -1.3%. Similarly, its Gross Earnings also dipped by -0.8% from N268.613 billion previously to N266.372 billion. Consequently, the company doles out a final dividend of 3.50 kobo per share making a final dividend of N4.75 kobo, having paid out an interim dividend of N1.25 kobo per share earlier.

In its third quarter result 2015, its turnover grew from N194.739 billion in the preceding year to N214.918 billion, translating to an increase +10.36%. However, its profit after tax dips significantly from N29.826 billion previously to N26.175 billion, a decrease of -12.24%. Current Market Price= N92.33 k. Interim dividend of N1.20 kobo per share was appropriated.

  1. UBA Plc: its price resurgence on the bourse was as a result of its impressive third quarter 2015 result. The result has helped to grow investors’ positive sentiment towards its stock and responsible for being the best pick this week.

The Bank was incorporated as a Limited Liability Company on 23 February, 1961. Following the Central Bank of Nigeria Consolidation reforms in 2004, the Bank merged with Standard Trust Bank Plc on August,2005 and also acquired Continental Trust Bank Limited same year.

The principal activity remains the provision of banking and other financial services to corporate and individual customers. These services include granting of Loans and Advances; assets management, investment banking, Pension and money market activities.

The Bank’s subsidiaries includes UBA Ghana Limited, UBA Cameroon S.A, UBA Cote di’voire, UBA Liberia, UBA Senegal, UBA Sierra Leone, UBA Uganda, UBA Burkina Fasso, UBA Chad, Continental Bank Benin, UBA Congo Brazzaville and UBA Congo DRC, UBA Kenya, UBA Tanzania, UBA Zambia, UBA Gabon, UBA Mozambique and UBA Guinea Limited.

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Financial Performance: In its audited result, its gross earnings appreciate to N290.019 billion from N264.687 billion in the preceding year, translating to an increase of +9.57%. Profit before tax grew marginally by +0.25% to N56.2 billion from N56.1 billion previously. Similarly, its profit after tax also appreciates by +2.80% to N47.9 billion from N46.6 billion. Consequently, a dividend of N0.10 kobo per share was appropriated.

The Company recorded an impressive third quarter result 2015 where its gross earnings grew by +17.32% from N210.715 Billion in the preceding year to N247.205 Billion.

Similarly, its profit before tax leaps from N42.543 billion previously to N57.366 billion, which translates to an increase of +34.84%. The profit after tax also rose to N48.557 billion from N33.628 billion, an increase of +44.39%.

  1. Flour Mills Plc: The Company was incorporated in September 1960 as a private limited liability company, and commenced operations in 1962 with an installed capacity of 600 metric tons per day. It was converted to a public limited liability company in 1978, and its shares were subsequently listed on The Nigerian Stock Exchange.

It is primarily engaged in flour milling; production of pasta, noodles and edible oil; livestock feeds; farming and other agro-allied activities; distribution and sale of fertilizer; manufacturing and marketing of laminated woven polypropylene sacks and flexible packaging materials; cement manufacturing; operation of Terminals A and B at the Apapa Port; customs clearing, forwarding agents, shipping agents and logistics; and, management of the mills of Maiduguri Flour Mills Limited and Port Harcourt Flour Mills limited.

With current ownership structure of 55.65% overseas shareholders and 44.35% Nigerian and Institutional investors, there is a broad ownership base of over 78,000 shareholders.

The Group employs over 8,000 direct and indirect employees. There was also the merger between Flour Mills of Nigeria Plc and Nigerian Bag Manufacturing Company Plc. (and its subsidiaries) on the one hand; and Flour Mills of Nigeria Plc and Niger Mills Company Limited on the other hand in March 2013.

Financial Highlights: In its audited result 2015, its turnover dips from N325.790 billion in the preceding year to N308.757 billion, translating to a decrease -5.2%.

Similarly, its profit before tax also nose-dived by -6.1% from N8.228 billion previously to N7.725 billion.

However, its Profit after tax leaps to N8.474 billion from N5.368 billion previously, an increase of +57.9%.  Its Net assets rose marginally from N83.559 billion previously to N87.410 billion, an increase of +4.6%.

In its second quarter 2015 result, its revenue grew by +16.80%, from N81.592 billion in the preceding year to N95.301 billion while profit after tax rose by +1,391% from N1.545 billion to N23.047 billion.

  1. 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.

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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 third quarter 2015 financial profile, its Gross Earnings dips from N3.349 billion in the preceding year to N1.539 billion, translating to a decrease of -54%. Similarly, its profit after tax slumps to N303.832 million from N744.874 million, a decrease of -59.21%. Current Market Price is N37.60 kobo per share.

  1. Cement Company of Northern Nigeria plc: was founded by the Premier of the then Northern Region, Alhaji Sir Ahmadu Bello, the Sardauna of Sokoto. .

It was incorporated in 1962 and commenced production in 1967 with an initial installed capacity of 100,000 tons per annum at the Kalambaina plant. In 2000 therefore, public bidding for the Company was concluded and Scancem International ANS of Norway, a member of Heidelberg Cement Group was appointed as core investor and technical partner of the Company.

Following a strategic re-orientation, Heidelberg Cement Group divested its CCNN shares in 2008. The Nigerian company Damnaz Cement Company Limited became CCNN’s new core investor.

In 2010, BUA International Limited acquired Damnaz Cement Company Limited and became indirectly the majority shareholder in CCNN and its technical partner.

The company is engaged in the production and marketing of cement under the brand name “Sokoto Cement”. Presently the company produces CEM II type of cement in accordance with the Nigerian Industrial Standards. Sokoto Cement is ideal for all construction purposes in Nigeria. Its unique quality makes it the cement of choice for block-making, plastering and concrete works.

Its high early strength, rapid setting and low heat of hydration are all distinct features that characterize our high quality production process.

Financial Highlights: In its audited result, its turnover dips marginally from N15.311 billion in the preceding year to N15.119 billion, translating to a decrease of -1.3%. However, its profit before tax leaps by +17.6% from N2.105 billion previously to N2.476 billion.

Similarly, its profit after tax grows from N1.559 billion previously to N1.918 billion, an increase of +23.0%. Its Net Assets rose by +14.01% from N8.284 billion to N9.445 billion.  Consequently, a dividend of 35 kobo per share was appropriated.

In its third quarter 2015 result, its turnover dropped by -6.98% from N9.395 billion in the preceding year to N8.739 billion. Similarly, its profit after tax slumped by -17.98% from N1.588 billion previously to N1.303 million.

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