HENATES

Time was when Nigeria was presumably overflowing with opportunities for investors to make money because crude oil money was flowing. Then not many needed to be convinced to think Nigeria especially investors from Europe and America with colonial ties and shared language and cultural pasts. Aside from the earnings from crude oil, there was also the growing concentration of human beings with good appetite for new products, and new processes even if such led to cultural upheavals. Yet even then investors were not beggars. Not to talk of now when crude oil prices have hit new lows and Nigeria, led by its president, is virtually going round the world begging investors to either come in or grow their involvement in Nigeria. Unfortunately, we beg yet we pay little attention to how to make it more attractive for them to come. Many old rules and regulations remain as they were when investors rushed in of their own accord. For example, before these times, to register securities with SEC ...

This financial year Cutix PLC is likely to be one of the rare quoted equities in Nigeria that can be considered cute in spite of the trying times. At least, so the figures for the nine months to January this year clearly indicate. It remains cute because though with gross income that is less than the profit of some fellow quoted companies, its bottom line continues to grow in spite of the times due to strength gained in virtually all aspects of the business. By the nine months revenue was up in double digit ahead of cost of sale and good control over overhead  also helped profit reported to grow at a rate more than double the revenue increase. Within the nine months overall income increased by 21.8% to N2112m from N1734m down slightly from the 22% rise in core revenue from N1721.1m to N2099.4m. This was because there was 2.33% drop in income from other sources to N12.6m. Not to worry. Between this and the finish line was still the lower 21.1% increase in direct cost from N1248....

One unforgettable feature of the Yakubu Gowon era after the civil war was the emergence of super permanent secretaries. These were administrative heads of federal ministries who seemed to wield more power than their Federal  ministers then called federal commissioners. Hence one of the things the late Murtala Muhammed did after the coup against Gowon was the immediate retirement of these top civil servants and mass purge of the service. Many are yet to forgive him for this because in the process he made the civil service less the committed work force that it used to be and because many lives were suddenly turned upside down. Now, it looks like Nigeria is knocking on that door again. This time though what seems to be emerging are super government agencies. The first to emerge almost through natural process was the Central Bank of Nigeria now saddled with single handedly managing the nations stretched balance of payments in the absence of clear and handed down fiscal policies in ...

The engagement contract of the chief executive officer of the Nigerian stock exchange, Mr Oscar N Onyema has been renewed for another five years. According to an official notice on the NSE website, the contract has been renewed by the National Council of the exchange well ahead of the March 31 expiration date for the current contract. Mr Onyema took over as the CEO in April 2011 for a five year term. Since then he has drawn up and executed strategic plan to transform the exchange into a globally competitive brand. He came aboard the exchange after above 20 years experience in the United States financial markets and in the Nigerian information technology sector. He joined American stock exchange (AMEX) in 2001 and eventually became the first coloured person to be senior vice president and chief administration officer of AMEX. When AMEX was bought over by the New York Stock exchange in 2008, he was instrumental to integrating AMEX equity into the New York exchange. He then ma...

It may take a long while yet before the Nigerian stock market recovers from its current bearish outlook. This is because, just like it happened before the 2008 crash, the banks are likely to once again report profitability depressed by increased provisions for bad debts or related matters. Nine months into 2015 only a handful did not see the need to reassess and increase impairment provisions. More importantly, if recent notice by FBN Holdings PLC are anything to go by, higher provision during the last quarter could be the case. FBN Holdings PLC which depends so much on First Bank its subsidiary, in a notice to the market dated February 24 and signed by Company Secretary, Tijjani M Borodo esq, warned that 2015 audited earnings "will be materially lower than for 2014" as a result of impairment charges from reassessment of First Bank's loan portfolio. The reassessment, it said was driven by "challenging macro environment, coupled with fiscal and monetary headwi...

Is there some one out there, in the Central Bank of Nigeria (CBN) or with the Federal Ministry of Finance who can brief Nigerians at regular intervals on how much comes in as foreign exchange from what activity; and who or which industry was allocated forex through letters of credit especially? This information is needed urgently not because there is any doubt over the integrity and patriotism of those allocating the funds now; but because current allocations must be seen by all making the asked for sacrifices to be fair and patriotic. If not the old credibility gap between government and the governed will become a problem once again. It will be interesting to know how much the president's almost nonresident status costs Nigeria on the form of allocated forex for expenses and estacode comes to, for example. Also interesting will be brief, say monthly, on how much flowed in from crude oil sales; gas sales; remittances from Nigerians abroad and non-oil exports. Then of cour...

Nigerians who are still having issues over non- possession or linkage of their Biometric Verification Number (BVN) to their accounts can now close the accounts if they want to. According to a circular dated February 24 but posted on its website on the 25th, banks have been asked by the Central Bank to close such accounts if customers so desire but payment instrument must be issued in the name in which the account was opened. Besides, says the circular signed by Dipo Fatokun, Director Banking and payments department, if the amount in the affected account is more than N10m, the bank must seek and obtain clearance from the Nigerian Financial Intelligence Unit (NFIU) before such accounts can be closed and the balance electronically transferred to another account. However, the main thrust of the circular was on directives on how to resolve issues still outstanding from the introduction and use of BVN. For example, banks have been directed to correct date of birth on BVN record ONCE ...

From the start let us get one thing straight: One man's overvaluation is another man's fair deal. It all depends on the need, satisfaction hoped for and availability of alternative. Yet there is no market made up of different commodities on offer where valuation issues will not occur especially in a market like the Nigerian stock market where normally brokers and investors perception count but shadowed by relative knowledge. So, it is assumed that the average investor who reads this would have established his own parameters and objectives by now. One useful tool for establishing relative valuation in the stock market is the price earnings ratio (PER). In a nutshell it gives an idea of how long it will take an investor who buys at the stated price to earn his money back based on most current earnings per share of the equity. Henates discovered during a recent study that of the 179 equities quoted in the main board of the Nigerian stock market by February 22, only 126 ha...

The Nigerian economy is currently restructuring itself and the pains are inevitable. One, because we have at the helm a President who never dreamt that things could be this bad for Nigeria and in line with his party wishes throughout the campaigns stopped short of promising Nigerians the moon. Two, many political gladiators flying the change flag were under the wrong notion that Nigeria or any part of it can survive without crude oil. And so, went the warped logic, let's get our cooperative MOU right and let them go and drink their oil. Three yet another set of gladiators are coming to terms with the fact that no one tribe or group of persons are indispensable in today's Nigeria or is insulated from the pains. Hitherto, the games these gladiators played in order to sustain or gain supremacy led to so many wrongs that continue to plague the nation starting from the British colonial policy to sacrifice quality for equality, encouragement of parasites, importation of all ...

Even though theoretically, the circuit breaker introduced by the Nigerian stock exchange since January 15 aims at discouraging market volatility, the current market is still so shallow that volatile price changes in about 36 equities out of the 179 on the main market can trigger off halt in trading. These are equities with market capitalisation above 25000m. This is because the All share index (ASI) which is the reference point for the circuit breaker is based on market capitalisation translated into weighted average for all the quoted equities. Of this number, only 16 had market capitalisation of 12 digits and above by February 22, this year. In a way these were the big boys whose change in price especially of the volatile type could see the exchange heading towards first halt which comes, for now, when ASI rises by 5%. Of this 16 seven were either quoted as banks under financial institutions or were quoted holding companies with banks as flagship subsidiary. However the elite...

The Securities and Exchange Commission is to hold 2016 Judges Workshop on the capital market this week at Abuja. According to notice posted on its website the workshop is in collaboration with the National Judicial Institute Abuja between Wednesday and Thursday this week. The theme is Effective dispute resolution: A panacea for the transformation of the Nigeria capital market. It holds at the Judicial Institute from 8.30 am each day for superior court judges and market stakeholders primarily to share views on capital market laws, ethics and judicial interpretation. It will be recalled the workshop is part of the SEC master plan for the market from this year to 2025. Borrowing a leaf from Brazil which fashioned its master plan in,1998; Malaysia which reaped well from its own plan to 2010 and Europe, SEC drew up the plan to: Make the Nigeria capital market one of the biggest, most liquid, broadest, most diversified and most sophisticated emerging market by 2025. It also aim...

Sometimes, a peep into history and even memories of some daily events makes many to wonder if being patriotic is worth it. Citing the example of Jesus Christ who was killed for claiming to be who he was could be too far into the past and indeed, go beyond the borders of patriotism for some people. Now take the late leader of Libya, Col Gaddafi, all he did for his people and nation and the way he also ended. Henates understands that in his time Libyans paid for almost nothing because their nation earned enough from crude oil under a leader who believed insharing openly, not stealing. Liyans paid no medical bills, education fees , and even when any required was not available locally, government paid for it abroad and gave monthly allowance to booth. In Gaddafi's Libya newly weds got money to buy their first home, and also got a fixed amount each time a child was born. Farmers also got free farmland, farming house, equipment, seedlings and livestock to get started. Under...

The Central Bank of Nigeria (CBN) has assured the public that it has not stopped allocating foreign exchange for the payment of school fees and medical bills abroad. According to the CBN any insinuation to the contrary is not correct. In a press release by the Director, Corporate Communications, Ibrahim Mu'azu, the CBN said it " has not stopped the allocation and sale of foreign exchange for purposes of paying school fees and settlement of medical bills overseas" Thus, the statement added " all genuine users desiring to obtain foreign exchange for the above purposes are hereby urged to freely approach their banks with their requests and appropriate documentation". It will be recalled that at a recent meeting of the CBN bankers committee the issue was discussed extensively but no consensus was reached. However, the tone and words of some of the bank CEOs who briefed the press after the meeting did indicate that it was becoming desirous for allocation fo...

The Nigerian stock exchange is contemplating tinkering with some sections of the Rules and Regulations guiding the market and so, has asked for comments from the investing public. In a notice on its website this week, the NSE is proposing changes to Rules 15.31; 15.32 and 17.13. According to the notice signed by Tinuade T Awe esq, General Counsel and Head of Regulation, the amendment to Rule 15.31 on block divestment in equities " will set new thresholds for trades that will be identified as block divestment" It will also provide for the need for obtaining prior approval from the NSE with clear requirements for obtaining the approval and penalties for executing block divestment without prior approval. In the case of Rule 15.32 proposed change, the emphasis is on what will constitute large volume trades in equities. Here too new thresholds for volume and value to be so treated as large volume trade will be stated and prior approval requirements will also be clearly sta...

A dive in its fortunes during the quarter to September 2015 has made unlikely that African Alliance Assurance PLC ended financial year to December with assurance officer good returns. According to the figures released recently, the first two months of that financial year were not fantastic when compared to previous corresponding times but third quarter dive made it all worse. In the nine months to September 2015, African Alliance only managed to close with about N1.25 gain on each N100 income generated (premium income plus others). This was no where comparable to the N9.61 gain on each N100 income by September 2014. The main reason was that in the third quarter African Alliance lost N5.9 on each quarter N100 income compared to N32.4 gain during the previous third quarter. The third quarter fortune was hit by 160.5% increase in overall claims to N3661.2m from N1405.4m; 105.1% dive in underwriting into N70.8m loss; leap in loss on financial assets to N29.4m from N5.52m and 28.7% ...

 Mrs Aisha Abraham UNITY KAPITAL ASSURANCE: NEW CHAIRMAN A new chairman of the board of directors of Unity Kapital  Assurance PLC has been appointed. She is Mrs Aisha A Abraham. Mrs Abraham replaced Henry James Sementari on the chair from February 16,  this year. She became a non executive member of the board on July 24, 2014 and is currently executive director Secretariat services of Unity Bank PLC. She holds LLB from Ahmadu Bello University and was called to the bar in 1983. Shee was a senior partner with Baiyee, Abubakar&co before moving to ABU faculty of law as graduate assistant between 1985 and 1986. From here she moved into banking into banking starting with a stint in the legal department of NAL Merchant bank up to 1988, and Ivory merchant credit and marketing department later in 1990. She was a pioneer director with Urban Development bank in 1992 before becoming company secretary/legal adviser for First Interstate bank 2002 to 2006 and has been with Unity ...

The Nigerian stock exchange has finally come up with explanatory guidelines on the trading circuit breaker it introduced to the market since January 15, this year. It is intended to halt trading on the floor where there is extraordinary price activity either way at the market but until February 16 it was like a maze to many. In the interpretative guidelines circuit breaker is defined as " trading halt used by exchanges to guide against sharp fluctuations on the market" " It is designed" says the NSE. " to give market an opportunity to take a break and adjust to all available information" before the market reopens; " protect against excessive volatility during continuous trading sessions..." and " provide opportunity for information dissemination and assimilation to all market participants including investors to facilitate better informed investment decision making during periods of high market volatility" The threshold of what c...

In any contest, in any relationship, in any hook up between conscious beings, the weak normally has no option but to surrender and allow the strong lead. Partly this is because there must always be a leader since it is always difficult for two captains to be in charge of one ship at the same time. So what happens when external development apply some stress to the relationship? Incidentally that is when unity is needed the most and the weak can not at that moment begin to exercise any options. In the end, the imposed stress gets distributed by the leader and naturally only rare leaders heap more of this on themselves especially when it  is economic in nature and tastes and expectations have to be adjusted. In the case of Nigeria, since the dawn of the Buhari administration, we not only have a leader who is preoccupied with blaming the past for today but also by a government also not too prepared to absorb some of the economic stress. Government must have money to pay salaries,...

Has Afromedia PLC , the Nigerian outdoor advertising quoted company, hit the bottom at last and so, can now begin to recover? According to latest audited and unaudited figures downloaded from their site, the answer could be yes after a very poor finish in financial year to September 2015. Or at least, so the figures for the first quarter to December 2015 do indicate even if it comes as a tiny ray of light. No doubt stakeholders of Afromedia could do with any thing that could raise their hopes about the company. In the year to September 2015 things ended to badly that loss before tax reported not only increased to N2745.3m from N1705.7m but it meant that shareholders fund ended at minus N4260.6m almost fourfold the deficit of N1506.8m in previous year. In more graphic terms it meant the company ended the year losing N627.2 on each N100 income earned compared to N499.6 loss previously. It got that bad because total income grew by 26.3% to N431.6m from N341.3m while all costs, w...

On  Wednesday and Thursday this week the Nigerian Securities and Exchange Commission (SEC) will interview new capital market operators at its head office in Abuja. According to an official notice, those to be interviewed include companies seeking fresh registration into the capital market; additional sponsored individuals for existing companies and existing companies seeking registration of additional functions. Letters of invitation have been sent to affected companies and individuals but for enquiries contact Elisha Tanko on 08121694100; Agam Emomotimi on 08034503686; Irobo Johnson on 08066484000 and Zainab Abdullahi on 08051300678. Among the hurdles so far crossed by those to be interviewed include minimum capital requirements; and payment of stipulated application fees in addition to N5000 for application form. The minimum capital requirements differ ranging from N500m to establish commodity and stock exchanges, Clearing Settlement and Custodial agency and OTCs  to N150m as...

There are now 25 deposit money banks operating in Nigeria, according to the Central Bank of Nigeria (CBN). In a notice posted earlier this year, the CBN said there were 10 commercial banks with international authorisation; nine with national authorisation and one with regional authorisation. Others were one non interest commercial bank and four merchant banks with national authorisation. The 10 with international authorisation include Access bank; Diamond bank; Fidelity bank; First bank; First City Monument bank; and Guaranty Trust bank. Others were Skye bank; Union bank; United Bank for Africa and Zenith bank. The nine with national license include Citibank; Ecobank Nigeria; Heritage bank; Keystone bank; Stanbic IBTC; Standard Chartered bank; Sterling bank; Unity bank and Wema bank. Wema bank was originally licensed as a regional bank but upgraded to national not too long ago. The lone regional bank was SunTrust bank which is relatively new on the scene. Also relativel...

A fortress is emerging for Forte Oil PLC against the vagaries of these times. It helped to insulate it from the arrows of 2015 and looks set to be more effective this financial year. According to the 2015 audited results downloaded from the group website, the fortress started to take shape when in 2014 there was deliberate investment in 100 trucks  alongside existing investment in property and securities. Hence come financial year 2015 there was 189.8% increase in income from these non-core business sources as freight income rose and gains came from securities held to maturity and  investment property disposed of. Thus income from these sources ended the year at N4051m compared to N1398.2m in 2014. Now the part of that that came from disposed property may not be available again but not to worry, the fortress was further fortified. In 2015, in spite of the times, Forte Oil increased the book value of its fixed property and equipment by 15.1% as it overhauled its 414MW Geregun ...

In putting together the post title what does BUHARI mean?, Henates forgot to include what the letter R could stand for. The two alternative meaning of BUHARI in the piece should have read thus: Bow Unto Him Always, Rightly. Intentionally. Bow Unto Him At Right Intervals Henates is sorry for the commission. Otherwise the whole piece stands as intriguing as intended. Henry Atenaga

Gowon stands out as one of the Nigerian leaders no one can forget that easily of course for different reasons depending on which side of the Biafra divide of old you still are. One striking thing about Gowon was his surname which those of us old enough to be in secondary school during the civil found out meant Go Own With One Nigeria (GOWON). He indeed it was who ended up leading the nation to fight a civil war and remain united. Now since his tine it has been difficult forming a meaningful sentence from the letters of any other Nigerian leader even including those like Obadanjo, Jonathan, Babangida with N in their names that easily could stand for Nigeria. Shegu Shagari who at one time was said to be mentioned in the Bible also failed this test. That is until the emergency of Buhari. In his first stint, it was so brief and military that the meaning of the name did not click. Besides as it turned military and its command structure did not fit the message from the name. Now ...

It may sound so logical but the potential is also there that led by the Bankers  Committee in the absence of first rate macro economic management Nigeria is finally being kobo wise Naira foolish. According to news reports this morning the Bankers Committee of the Central Bank rose from a meeting yesterday almost with a consensus that the time has come to stop allocating foreign exchange for school fees and health care abroad. The near consensus was predicated on the compiled figures from banks that showed forex for schiol fees abroad was on the increase and now consumes not less than 15% of total dollars purchased officially by the banks from the CBN at official rates. Access Banks Group Managing Director Mr Herbert Wigwe is quoted to have put it this way after the meeting: " we find pressure on different banks in terms of demand but generally never below 15% of the demand of current foreign exchange that is being given to the banks is for school fees that by any stretch o...

For state governments in Nigeria hoping to follow federal example by opening Treasury Single Account (TSA), the Central Bank of Nigeria has come up with guidelines to make it easier and beneficial to all stakeholders. The guidelines were released this week and the aim, says the CBN is to provide state governments with framework to support successful implementation of TSA. In its preamble, the CBN defined TSA as " the operation of a unified structure of government bank accounts in a single account or set of linked accounts for ALL government payment and receipts" It explained that the main objective of TSA is to bring all government funds within effective control and operational purview of Treasury to "enthrone centralised , transparent and accountable revenue management" TSA, CBN explained, is in two model options from which state governments will have to choose. These are the TSA and associated ledger sub accounts and main TSA in a single banking institutio...

If the financial year to December 2015 was rather tight for Nigerian Breweries PLC it is likely to be nothing when compared to what lies ahead, all things being equal. That is, according to the figures for the year released this week to the stock exchange. In the immediate horizon is finding money to pay N28544.8m recommended dividend for the year payable by May 12 once it is approved at annual general meeting by May 11 2016. From the 2015 figures. this may prove an uphill task with only N5106.9m cash on hand by December and about N34614.6m current financial liabilities also due for payment this year. Already Nigerian Breweries working capital was in the red by N86775.3m compared to N61832.8m deficit by 2014 year end. But the brewing aches do not end there. In 2016 Nigerian Breweries will also tackle or learn to live with the high cost of operations especially since from 10.3% increase in core revenue, direct cost grew by 15.8%, distribution and administration expenses rose b...

The news that four people have been caught by the Nigerian Department of State Security (DSS) while planning to hack into inviting single treasury accounts with the Central Bank of Nigeria must have surprised many. The four, said the DSS were planning to access the accounts and illegally transfer above N4bn for their benefit. The scheme was blown open before they could make their hit. Yes it must have surprised many but those in the industry called electronic banking know that you don't place any decaying body anywhere without planning how to tackle flies. It is then a good thing that they were caught but mind you, they won't be the last to attempt it. Above two trillion naira so publicly stashed in CBN vault will always attract more attempts. Which is why it is gratifying that, according to 2014 annual report released this month, the Nigerian electronic Fraud Forum (NeFF) is taking its mission seriously. NeFF was formed in 2011 to create enabling environment for shar...

No doubt, the going is getting tougher today in Nigeria. On the part of the government, the present times are not what President Buhari or any of the present day political leaders bargained for. It is certainly too tough because they have far less to spend and less room to recoup huge campaign expenses. Besides those who would have preferred to be branded as saviours of our time find themselves battling with months of unpaid civil servants wages and abandoned projects galore. To worsen matters many with their eyes fixed on populist applause find themselves having to take and sell decisions that hurt many on the street. Indeed none is to be envied. On the part of the governed, hopes raised so high by the change mantra have been punctured too soon. Cost of living is on the increase everywhere even amidst stagnant or unpaid salaries; insecurity refuses to be wished or commanded away and every day the nations political space gets heated to boiling point. Yet let us face it, the w...

Triple Gee PLC may not end the year to March 2016 on the triple; more like a slow train still rolling on in spite of the times. Or so the nine months figures to to December 2015 seem to indicate. However this was more because its distribution and administration costs grew out of step by following finance cost in double digit growth. Hitherto, Triple Gee appeared to stand a chance by recording growth in turnover that was almost that in direct cost. According to the figures, there was 4.02% increase in total income for the period to N532.9m compared to N512.3m previously To produce the goods sold however, only 2.67% increase in direct cost was recorded to N373.9m from N364.2m. Thus the company's gross profit rose by 7.43% to N159m from N148.1m. The first pressure to puncture this rising balloon came from overhead costs with distribution and administration expenses at N95.1m, up 10.3% from N86.2m previously. This meant that operating profit, instead of increasing like gr...

Tiger Branded Consumer Goods PLC (TBCG) erstwhile known as Dangote Flour Mills had a rather hopeful first quarter to December 2015 although it remains in the loss league. According to the figures for the period released recently, TBCG ended with only N975.3m compared to N2987m loss recorded at the same time in 2014. This was principally due to N962.4m profit from foreign exchange as against N1290.1m loss here previously. In view of this TBCG had ended the quarter with only N39.1m operating profit loss compared to N2225.4m  such loss by December 2014. However all the credit does not go to Forex gains but also to the decrease in direct cost even as core income rose very marginally and due to sound 40.7% increase in income from other sources. Core revenue had increased to N10672.1m from N10665.4m but this was accompanied by 0.97% decrease in direct cost to N9405.9m from N9498.2m. This resulted in 8.49% increase in gross profit to N1266.2m as against N1167.1m previously. The ...

The Central Bank of Nigeria has come out with guidelines for establishing banks in Nigerian export free zones. Under the guidelines, the minimum capital requirement for export free zone  banking in Nigeria is $10m and proof of its payment to the CBN must accompany formal application for such banking license. Apart from proof of minimum capital requirement, the application, must be accompanied by a formal letter of application and none refundable fee of ten thousand dollars plus a number of other documents. A number of incentives have also been put in place to make free zone banking attractive include freedom to move finds in and out of the zone; exemption from stamp duties, exemption from deducting withholding tax on interest and exemption from paying capital gains tax. Other incentives include exemption from payment of customs duty on furniture, office equipment and other needed facilities and exemption from paying value added tax. Banks that operate in export free zones  wi...

Interlinked Technologies PLC remains a very small company by average of Nigerian quoted companies but also remains well linked together even in these times. According to half year figures to December 2015 released recently, so long as profit making on business done remains the driving force, Interlinked Technologies has its act together with one exception: Input cost. The interim revenue had grown by modest 5.02% to N73.2m from 69.7m but the accompanying 8.7% rise in cost of sale to N56.2m from N51.7m dampened this somehow. As a result, with gross profit going down by 6.11% to N16.9m from N18m, less profit before tax would have been quite natural. That was not to be because of good grip on other costs added to a favourable nod from finance charges. In spite of the modest income rise, distribution cost declined by 25.3% from N0.87m to N0.65m and administration expenses closed 9.02% down at N11.1m compared to N12.2m previously. Also good prop came from 22.3% decrease in finan...

In the nine months to December 2015, Northern Nigeria Flour Mills PLC came up with a surprise flower: Higher gain on each N100 income Or so the otherwise frightening figures for the period released last week show. Frightening because the notice accessed from the Stock exchange site, indicated a shopping 99.3% drop in the total revenue of the company from N10877.4m to N945.5m. This was as core revenue decreased by 93% to N749.7m from N10764.9m, and interest income dropped by 39.5% to N28m while other operating income increased by 153.5% to N167.8m from N66.2m. An early indication of how well NN Flour Mills would prove to be equal to the task was the lower 83.6% decrease in gross profit from N411.5m to N67.6m as direct cost of producing the goods sold declined by 93.4% to N682.2m from N10353.5m. In addition, there was also 92.9% drop in selling and distribution costs to N1.1m from N15.4m. However, the decrease in administration cost at 19.9% from N238.1m to N190.8m was no whe...

BERGER PAINTS OUTSOURCES DEPOTS. Nigeria's pioneer paints manufacturer, Berger Paints PLC, has decided to outsource its depots across the country to independent operators. According to a notice sent to the Nigerian stock exchange, thereafter it will also appoint franchises in various other locations. This is an attempt to improve on its bottom line and efficiency apart from enhancing product availability nation wide. Also, decades after pioneering paints manufacture in Nigeria, company executives hinted that Berger Paints will this year commission the first automated paint manufacturing plant in sub Saharan Africa. Berger paints was incorporated in 1959 but commenced business in 1961 importing paints for sale. It eventually ended up setting up the first paint factory in Nigeria and has since been a major producer of various types of paints and related products. GUINNESS NIGERIA: BOARD CHANGES A new company Secretary has been appointed for Guinness Nigeria in additio...

Flour Mills of Nigeria's nine months figures to December 2015 released recently inadvertently indicates mounting profit before tax but there is a little more behind the flowers. The truth actually is that Flour Mills of Nigeria reported profit because of bountiful gains from disposal of investment in associate. Decoded: This is more of a capital gain unlike annual share of profit or loss from investments According to the figures, the gain from the disposal was N23732.5m out of it N13952m was from investment disposed of by the company as against the group. Now, from the same figures gross profit increased marginally to N27683.9m from N24930m as 7.94% rise in core revenue to N263680m from N244280m was accompanied by 7.59% increase in cost of sale to N235996.1m from N219350.8m. Subsequently, from the same figures, total overhead including net finance cost came to N31630.8m meaning a loss was on the card for the nine months. That did not come into being because of the inves...

Guinness Nigeria PLC had a relatively poor first quarter to September 2015 or so the figures released last week show. From the figures, Guinness Nigeria had real issues with input costs and overheads at a time when core revenue grudgingly rose by 3.3% to N21741.8m from N21047.8m. In the first place, cost of producing the goods sold within the quarter increased by 18.5% to N12437.2m from N10499.9m. Secondly, overheads that is distribution, marketing and administration costs combined, closed the quarter 20.9% up at N8001.4m compared to N7837.9m previously. To make matters worse, income from other sources dropped by 25.3% to N144.2m from N193.1m  by September 2014. In the case of Guinness Nigeria though, unlike for many companies in today's Nigeria, finance charges decreased by 1.16% from N940.7m to N929.8m. However given the massive growths in direct and indirect costs already recorded, lower finance cost offered little succour. In the end, Guinness Nigeria's profit b...

The nine months figures to December 2015 by Rak Unity Petroleum seem to point to self inflicted pains that dampened the corporate take home. Yet curiously it looked like improved staff take home brought on the pains. According to the figures, revenue shrunk almost by double digit but staff cost in particular increased almost fourfold. The drop in total income was 8.24%  to N1612.2m  as core income decreased by 8.32% to N1610.6m in spite of good growth in investment income to N2.6m from N0.6m. Good enough the resultant drop in direct cost at 9.29% to N1550m was the first sign of good cost control in spite of the revenue decrease. But first, staff cost jumped to N37.2m from N11m previously with the quarter to December being responsible for most of this thus implying the addition to the staff take home bill must have occurred then. To make matters worse, administration costs ended the nine months too considerably higher. It closed at N69.7m compared to N34.5m previously. Thu...

Academy Press PLC would have ended the period to December 2015 in a better position but for one little slip: It borrowed more to stock up and partially repay medium term liabilities. According to the figures for the period released last week, even though revenue eased, Academy Press was well in control of most costs and looked set to reap more but, of course, 44% rise in finance cost applied the brakes. The income decrease was marginal;down 3.19% for total income to N1560.5m from N1610.3m as core revenue eased by 2.93% to N1542.7m from N1589.3m That was because drop in income from other sources at 15.2% was more significant but as it turned out, not enough to make much difference. More significant was the fact that direct cost dropped by a higher 3.76% to N1031.9m from N1072.2m. Then of course most other pieces fell into place as well. Foreign exchange loss declined 59.4% to N23.9m from N58.8m; and distribution costs reduced by 7.05% to N40.9m from N44m although the 0.29% dec...

The Nigerian Debt Management Office (DMO) has reopened two Federal bonds issued last month. They are now to be additionally auctioned next Wednesday February 10. According to the announcement from the DMO the 5 year tenor 15.54% FGN Feb 2020 and  10 year 12.5% FGN Jan 2026 bonds are to be offered to raise N40 bn and N50bn respectively. Like for the January offer, minimum  subscription is N10,000 of N1000 per unit and multiples of N1000 thereafter. This time around the Central Bank of Nigeria is encouraging retail investors to also subscribe to both issues. They are to state their Central Securities Clearing Systems account numbers in their tender forms for ease of settlement. Dealing firms have also been urged by the Nigerian stock exchange to: 1) Guide clients through the completion of the tender forms and forward same to the primary dealer market makers 2) Follow up with market makers to ensure auction winnings are lodged with the CSCS. Investors who need more informa...

It looks like 7up Bottling PLC is in reverse gear of sorts in the current year when compared to the previous financial year. Or so Henates discerns from the figures for nine months to December released last week. When 7up closed third quarter to December 2014 with gain on each N100 income of N11.9, it more or less helped to sustain nine months figure to the same December at N9.72. Meaning performance in the first half to June of that year was relatively less impressive. That was understandable because the third quarter includes Yuletide annual celebration of Christmas and new year with attendant demand for drinks. Now it seems that in the current year the reverse was the case. From the figures, 7up ended the third quarter to December 2015 with only 2.47% profit margin while the figure for the whole nine months to the same December came to 4.78%. Decoded: the third quarter this time around was a drag on what was clocked by half year. Reverse gear? Perhaps because the figures i...

For Avon Crown Caps PLC, there has been a fair start for the current financial year given what figures for the quarter to December 2015 show. According to the figures released last week, this was principally because as core revenue increased by a fairly impressive 20%, accompanying cost of sale dived by 59.7%. Core revenue closed the first quarter at N3832.7m, well ahead of the N3194.4m reported in the first quarter of the previous year. This became a very pleasant development because direct cost of producing the goods sold, dropped to N1099.5m significantly lower than N2728.1m deployed to generate the lower previous first quarter sale. Then income from other sources offered icing on the cake by closing at N9.17m as against just N40,000 previously. Unfortunately, the miracle did not extend to overheads control as this cost head increased ahead of core revenue growth though below overall income growth of 23.4%. Overhead costs increased by 21.6% to N314.5m from N258.7m. The...

At last Chellarams PLC seems on course to earn a sigh of relief this financial year ending March. That is if trend in the nine months to December 2014 continues or is even improved upon. According to the figures released last week, the credit goes to relatively good cost control especially direct costs as revenue continues to decline. Chellarams core revenue declined  by 20% to N13472m pushing group core revenue down by 19.9% at N15962.9m from N19881.6m same time previously This was accompanied by a far higher percentage decrease in direct cost thus implying  this was effectively held. Cost of sale within the period came to N11006.1m, down 29.6% for the company and to N12825.6m for the group representing 28.7% decrease from N17992.5m previously. For the group this translated into 84% leap in gross profit and more than doubled one in the case of the company. This was fortified further by 37.2% drop in group distribution costs to N196.7m from N313m ahead of equally impressive 3...

Remember Seplat Petroleum PLC quoted on the London and Nigerian stock exchanges and now reaping good profit from its gas operations? Well, thanks to a ruling by the Supreme Court of Nigeria, it has landed yet another field to dig for gold, beg your pardon, produce oil and harvest gas. According to a notice sent to both markets late last week, Brittania-u Nigeria ltd had sued Seplat and Chevron from going ahead to close and activate a deal they signed for Seplat to have 40% working interest in OML53 and 22.5% effective working interest in OML 55. Last week, the Supreme Court finally gave its ruling in the matter and it was to the effect that both parties to the agreement could go ahead with it. Thus, says Seplat Petroleum's chief executive officer, Austin Avuru, the company now has relevant interest in both blocks " estimated to hold recoverable volumes of around 200m barrels of oil equivalent". He added: " OML 53 fits neatly within our strategy of securing , ...