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Heineken buys more units of Nigerian Breweries Plc

The Dutch firm has invested N276 million in NB since August, to increase its stake in the Brewer by 0.10%.

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The major shareholder of the largest brewer in Nigeria, Heineken Brouwerijen B.V, has increased its stake in Nigerian Breweries, with the purchase of 233,110 additional units of Nigerian Breweries shares. This was disclosed by the company in a notification sent to the Nigerian Stock Exchange, which was seen by Nairametrics.

According to the notification, which was signed by the Company’s Secretary, Uaboi G. Agbebaku, the purchase was made on the bourse over two transactions on the 2nd and 3rd of September.

This disclosure is a regulatory requirement that must be reported to the Nigerian Stock Exchange, especially when a major shareholder or director of a publicly quoted company purchases shares in the company they own.

The analysis of these transactions indicates that the purchase consideration for the 233,110 additional units of Nigeria Breweries shares at an average price of N39.94 is put at N9.3 million.

This purchase and previous purchases further cement Heineken Brouwerijen B.V’s status as a major shareholder; the company has accumulated a total of 7,720,236 since 30th June.

As of June 30th, when Nigerian Breweries released its Half-year financial results and reviewed its shareholding pattern, the company had exactly 7,996,902,051 outstanding shares, with Heineken Brouwerijen B.V being the majority shareholder with 3,019,363,804 units, which amount to 37.76% of the total shares of the company outstanding.

Hence, with the current purchase of 233,110 additional units, and previous purchases in August and September 1, which amount to 7,487,126 units, Heineken’s ownership percentage of Nigeria Breweries is now put at 37.85%.

Insider transactions, both sales and purchases, are often an indication of how shareholders perceive a company’s valuation. It could also mean a possible capital raise or that the majority shareholders are strengthening their existing holdings.

In like manners, the purchase of the shares of Nigerian Breweries by Heineken and other majority shareholder has mopped up stray volumes on the bourse, and pushed the stock price higher by 29% or N9, from N31 it closed at on the 3rd of August to its current value of N40 with 38.2x earnings.

About the company

Nigerian breweries is the largest brewing company in Nigeria. It engages in the brewing and marketing of lager beer, stout and non-alcoholic malt drinks, and the bottling of the Schweppes range of soft drinks and Crush Orange. Its brands include Star, Gulder, Legend, Heineken, Maltina, Amstel Malta, Fayrouz, Climax, Goldberg, Malta Gold, and Life. These products are mainly sold in Nigeria and other neighbouring countries.

Key takes on NB’s financials

Nigerian Breweries was affected by the disruption in the global and domestic demand and supply chain, as profit after tax of the largest brewer dropped by as much as 58%, at the back of the adverse impact of the sharp contraction in economic activities.

The knock-on effect of the COVID-19 lockdown, which affected the trade segment of the business, affected the company sales and this triggered the 11% drop in revenue in the first half of the year.

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Companies

Africa Prudential Plc declares N1 billion dividend for shareholders

The Board of Directors of Africa Prudential Plc has proposed the payment of N1 billion as dividend to qualifying shareholders.

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The Board of Directors of Africa Prudential Plc, Nigeria’s leading registrar and a key player in the capital market, has proposed the payment of N1 billion as dividend to qualifying shareholders of the company.

This is in line with the resolution made at the Company’s Board meeting which held on Thursday, February 18, 2021, as the Board resolved to pay a dividend of 50 Kobo per ordinary share, amounting to N1,0000,000,000 (One billion Naira only).

It is essential to understand that the dividend recommended by AfriPrud’s Board is subject to appropriate Withholding Tax, and the approval of shareholders at the Company’s Annual General Meeting.

What you should know

  • The dividend recommended by the board of AfriPrud in 2020 is 28.57% lower when compared to the total dividend of 70 kobo per share paid to shareholders last year for 2019.
  • It is important to note that the dividend declared is subject to appropriate withholding tax and the approval of shareholders at the Company’s next Annual General Meeting.
  • However, with a share price of N7.3 per share at the close of trading activities on the floor of NSE for last week, the dividend yield of the company stands at 6.85%.
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Companies

Royal Exchange Plc forecasts N500.83 million PAT in Q1 2021

Royal Exchange has projected a 244% rise in its Profit After Tax for the first quarter of 2021.

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Royal Exchange Plc has projected a rise in its Profit after Tax (PAT) to N500.83 million for the first quarter of 2021 (Q1, 2021), indicating a 244% increase from the figures recorded in Q3 2020.

This is according to the latest earnings forecast of the firm, signed by the Chief Financial Officer of the firm, Olalekan Jayeola, and sent to the Nigerian Stock Exchange market.

Key highlights of the earnings forecast of Q1 2021

  • Pre-tax profit is projected at N736.5million, +244% Q-o-Q.
  • Gross Written Premium is expected to hit N4.75 billion, +95% Q-o-Q.
  • Net premium is projected to decline to N1.7 billion, -19.1% Q-o-Q.
  • Fees and commission income is projected to decline to N141.2 million, -25% Q-o-Q.
  • Investment income is projected to increase to N475.51 million, +3.3% Q-o-Q.
  • Total underwriting expenses is projected to decline to N1.3 billion, -40.5% Q-o-Q.
  • Total underwriting profit is projected to increase to N567.4 million, +299.4% Q-o-Q.
  • Total operating expenses is projected to decline to N494.1 million, -5.7% Q-o-Q.

Key aLittlessumptions

In preparing the forecast, some assumptions were made including;

  • The premium income budget for the year is zero based.
  • Reinsurance is projected at 27% of Gross Written Premium.
  • Fees and Commission income was forecasted at 11% of reinsurance expense.
  • Claims expense of N514Million is estimated not to exceed 30% of Net Premium Income.
  • Underwriting expenses of N685Million is forecasted not to exceed 40% of Net Premium Income.
  • Management expenses of N479million are estimated not to exceed 30% of Net Premium Income.
  • The Inflation rate was projected at 14% as the worst case scenario.
  • The exchange rate of N385 to a dollar was assumed.
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Companies

Nigerian firm, InfraCredit secures $27 million equity investment from InfraCo Africa

InfraCredit has successfully closed a $27 million equity investment from InfraCo Africa.

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InfraCo Africa, a member of the Private Infrastructure Development Group has completed a $27 million equity investment into InfraCredit, a Nigerian-based specialized local currency infrastructure credit guarantee institution.

This corporate action was announced by Infracredit, through a verified Tweet, as seen by Themoneymetrics.

According to the tweet, the investment is aimed towards unlocking infrastructural finance in Nigeria, accelerating economic growth, and market development.

Our source gathered that the investment made by InfraCo Africa through its dedicated investment vehicle makes it an equivalent shareholder alongside the Nigeria Sovereign Investment Authority (NSIA) and Africa Finance Corporation (AFC).

What they are saying

Commenting on the recent development, the CEO of InfraCredit, said:

  • “We are absolutely thrilled to welcome InfraCo Africa as an equity investor and stakeholder of InfraCredit in pursuit of our mission and strategic growth. We believe this equity investment marks a significant milestone and inflection point for InfraCredit in unlocking more infrastructure investments that will stimulate economic growth and market development.”

What you should know

  • InfraCredit, ‘AAA’ rated credit enhancement facility was established in 2017 by GuarantCo and the Nigerian Sovereign Investment Authority (NSIA) with the support of Private Infrastructure Development Group.
  • It was gathered that, in lieu of the new equity investment by InfraCo Africa, InfraCredit total capital base (paid-in and callable capital) will increase to $173million ( c.N68.3 billion), translating to an aggregate guarantee issuing capacity of up to N342 billion (c. $865 million), based on its current maximum capital leverage ratio of up to 5x allowable by its rating agencies.

Why it matters

The investment will further promote confidence in credit standing of InfraCredit, enhancing its ability to continue to increase private sector financing for infrastructure projects in key sectors such as transport, logistics, renewable energy, agriculture and healthcare.

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