capital market

Asset sale, interest income boost PZ Cussons’ earnings in 2023

Published

1 year ago

May 2, 2023

NewsDirect

Another outstanding profit growth can be expected for PZ Cussons Nigeria Plc in its 2022/23 financial year ending May, as profit from asset disposal and a boost in interest income add to growing sales revenue to double profit at the end of the third quarter.

The consumer goods manufacturing and marketing company is riding on the back of the same functions that jerked up its after-tax profit from less than N1.8 billion in 2021 to N6.7 billion in 2022.

The full year’s profit figure in the preceding year has been far exceeded with an after-tax profit of N11.2 billion the company posted at the end of its third quarter operations in February 2023. That is, double the corresponding profit figure of N5.6 billion the company reported in the same period last year.

PZ Cussons’ interim financial report at the end of its third quarter ended February 2023 shows that it reaped a profit of N5.9 billion from the sale of a residential property at Ikoyi, from which it also raked in a profit of roughly N8.9 billion in the prior financial year.

The company is sustaining an upturn in earnings for the third straight year after it suffered a loss of over N7 billion in its 2020 financial year and the current year looks quite good to be its best earnings year on record.

A major boost in interest income is also happening for the company for the second year, which is providing an even much stronger upside force on the bottom line. Interest earnings multiplied close to eight times year-on-year to N3.3 billion at the end of the third quarter.

The figure is almost as good as net interest income with a relatively modest interest expense of N148.6 million for the period.

The company’s third level support for the profit leap so far is a combination of sales revenue improvement and cost moderation/reduction that has reinforced the core business. Group sales revenue grew by 16.7 per cent year-on-year to N87 billion at the end of the third quarter against an all-around slowdown in costs.

Impressive growth records in group sales seen over the past two years have extended to the third year. The strength in sales in the current financial year has been extended by management’s firm hold on costs — which provided room to convert the revenue gains into profit.

Cost of sales grew well below turnover at 10.5 percent to over N63 billion for the nine months of operations. The slowdown in input cost powered a major increase of 37 per cent in gross profit to N23.7 billion.

Cost of sales claimed a reduced share of sales revenue from 76.7 per cent to 72.7 per cent over the review period, which conversely improved gross margin.

Selling and distribution expenses also moderated at an increase of 14.3 per cent to N8.9 billion while administrative expenses declined by 3.7 per cent to less than N5 billion at the end of the period. An exchange loss of N4.7 billion occurred over the period though it did not encroach on revenue.

The favourable combination of revenue improvement and a general slowdown in costs recharged the company’s core operations with operating profit soaring from N211 million in the same period in 2022 to roughly N5 billion at the end of the third quarter.

The impressive earnings outlook for PZ Cussons in 2023, therefore reflects the combination of advancing operating profit, interest income boost, and another windfall from the sale of fixed assets.

PZ Cussons is taking advantage of the hike in interest rates on the side of interest earnings but is shielded from the cost side of it. Its balance sheet debts of close to N24 billion are mostly interest-free loans from its parent company.

The company earned N2.82 per share at the end of the third quarter, rising from N1.42 per share in the same period in 2022. It closed the 2022 financial year with per share of N1.50 and a cash dividend of N1.01 was paid out to shareholders.

capital market

FG lists N4.214bn April savings bonds on NGX

Published

20 hours ago

May 16, 2024

NewsDirect

The Federal Government has listed its April 2024 Savings Bonds worth N4.214 billion on the Nigerian Exchange Limited platform.

This was disclosed in the market bulletin signed by Godstime Iwenekhai, Head, Issuers Regulation Department of NGX.

According to the bulletin, “Trading License Holders are hereby notified that the April 2024 Issue of the Federal Government of Nigeria (FGN) Savings Bonds was listed on Nigerian Exchange Limited (NGX) on May 13, 2024.”

Details of the Bonds include FGS April 2026, 1.228 million units valued at N1.228 billion at a coupon rate of 17.046 percent, while FGS April 2027, 2.986 million units amounted to N2.986 billion at a coupon rate of 18.046 percent.

The bonds are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria, according to the debt office.

FGN Savings Bond is issued monthly in tenors of two and three years with quarterly payment of coupons (interest) at a rate predetermined and published by the DMO every month.

The retail savings bond product was introduced by the Debt Management Office (DMO) on behalf of the Federal Government in 2017 to democratise its activities in the bond market by making it easily accessible to Nigerians to ensure continuous development of the domestic market and bridge infrastructure deficit which has been a constraint to economic growth.

capital market

LCFE inducts 23 commodities brokers

Published

21 hours ago

May 16, 2024

NewsDirect

As part of its capacity building functions, Lagos Commodities and Futures Exchange (LCFE), has onboarded and inducted another 23 Commodities Brokers, the fourth edition in the series, to increase the number of professionals to specialise in various asset classes in the Nigerian commodities ecosystem.

On the list of those inducted last week were the Managing Director, Dynamic Portfolio Limited, Mr Remi Lasaki and many Chief Executive Officers of stockbroking companies in Nigeria.

In his welcome address, LCFE’s Managing Director and Chief Executive Officer, Mr Akin Akeredolu-Ale, urged the inductees join hands with The Exchange to build a virile commodities market that shall be beneficial to all.

“LCFE is working hard to build a market that will benefit the entire Capital Market and its brokers. Each broker can select a commodity and dedicate their focus on it, thereby enhancing your company’s wealth, your individual skill set and contributing to the growth of the Nigerian Economy.

“Together, let us seize this opportunity to build a vibrant and dynamic marketplace that unlocks new possibilities for investors, enhances economic prosperity, and positions Nigeria as a leader in commodities trading.

“The Exchange is actively engaging with the Securities and Exchange Commission to obtain approval for more products like Lithium, diamond and Oil and Gas commodities. Just yesterday, we signed an MOU with a Global Certification Agent Bureau Veritas to certify lithium and other Solid Mineral commodities to be traded on LCFE. Additionally, we have made significant strides in the Cashew ecosystem, signing an MOU with the Cashew Association of Nigeria (CAN), aggregators, and a major cashew processor.

“Eko Gold also represents a pioneering investment opportunity within our commodities ecosystem, leveraging stability and transparency to diversify options, attract capital, and create value across the value chain. LCFE is fully committed to supporting its growth and providing brokers with the tools and guidance needed for effective promotion of the asset classes,” said Akeredolu-Ale.

Corroborating him, the Chairman, Securities Dealing Houses of Nigeria (ASHON), Mr Sam Onukwue, noted LCFE was established for total transformation of commodities exchanges in Nigeria and boost the country’s Gross Domestic Product (GDP).

“The underpinning drive for establishing the exchange was the need to transform and reposition the commodities market and harness opportunities in the commodities ecosystem. This drive will enhance and crate value for all stakeholders in the ecosystem,” he said.

The newly elected President of Chartered Institute of Stockbrokers (CIS), Mr Oluropo Dada, congratulated the inductees and advised them to uphold the ethical standard of the profession and operate with skills and integrity.

Akeredolu-Ale also congratulated the new board and management of Securities and Exchange Commission (SEC), under the new Director General, Dr Emomotimi Agada.

In July last year, the Pan African Exchange inducted 33 commodities brokers, including the first female office holder at Chartered Institute of Stockbrokers (CIS), Mrs Fiona Ahimie.

capital market

Tinubu asks Senate to confirm four board members of SEC

Published

21 hours ago

May 16, 2024

NewsDirect

President Bola Tinubu has asked the Senate to screen and confirm four persons appointed as board members of the Securities and Exchange Commission (SEC), the apex regulator of Nigeria’s Capital Market.

The President’s request was contained in a letter read by the Senate President, Godswill Akpabio during the plenary on Wednesday.

The appointed members of the SEC are Emomotimi Agama, Frana Chukwuogor, Bola Ajomale and Samiya Hassan-Usman.

While Agama was appointed as Director-General, Mr Chukwuogor will serve as Executive Commissioner (Legal and Enforcement) of the Security and Exchange Commission. Ajomale was appointed as Executive Commissioner (Operations) while Hassan-Usman was appointed as Executive Commissioner (Corporate Services).

In April, President Tinubu approved the appointment of seven persons as members of the SEC pending their confirmations by the Senate. But, only four names were transmitted to the Senate for confirmation and Tinubu did not give reasons for not including the names of the other three professionals.

In the letter, the President explained that the appointment complied with the provisions of section (1) of the Investment and Security Act of 2007.

“Confirmation of appointment of the Director-General and Commissioners of the Securities and Exchange Commission.

“By the provision of sections 3 and 5 (1) of theInvestment and Securities Act 2007. I am pleased to present for confirmation by the Senate the under-listed four nominees as Director-General and Commissioners of Securities and Exchange Commission,” he said.

The president urged the lawmakers to expedite the screening and confirmation process.

The Senate President thereafter referred the request to the Senate Committee on Capital Markets to report back to the Senate within two weeks.