UAC of Nigeria Plc earlier today released its Audited Financial Statement for the period ended 31st December 2019, posting a 12.39% increase in Revenue, from NGN70.47bn in 2018 to NGN79.20bn. The revenue growth can be traced to the Animal Feeds & Other Edibles segment which reported a revenue of NGN51.81bn (FY 2018: NGN44.57bn) thus accounting for 65.4% of the Groups revenue.
Profit After Tax for the period from continuing operations went up 26.15% to NGN5.34bn from NGN4.23bn the previous year. The Group however reported a Loss after Tax of NGN14.60bn for the period from discontinued operations. On July 4 2019, the Board of UACN approved that subject to the approval of Shareholders, and appropriate regulatory authorities, a proposed scheme of arrangement be effected by the transfer of the ordinary shares held by the Company in UACN Property Development Company Plc (UPDC) to the Shareholders in proportion to their respective shareholding as reflected in the register of members and on such terms and conditions as the Board deems fit. The Group therefore reported a NGN9.25bn loss for the period, almost the same as the NGN9.53bn reported for the same period in 2018.
In view of the results, the Directors have recommended the payment of 10kobo dividend per ordinary share to shareholders. The resolution to this effect, will be put to the annual general meeting, for the approval of shareholders. This 10kobo dividend is a far cry from the high dividends that the company had paid in the past 5 years; 100 kobo in 2015, 100 kobo in 2016, 65 kobo in 2017 and 64 kobo in 2018.
UAC of Nigeria PLC is a holding Company with subsidiary companies having operations in the following principal sectors: Packaged Foods and Beverages, Animal Feeds and other Edibles, Real Estate, Paints, Logistics and Quick Service Restaurant. According to a statement from the company, “The Group’s management has made an assessment of its ability to continue as a going concern and is satisfied that it has the resources to continue in business for the foreseeable future. Furthermore, management has considered the existing and anticipated effects of the Coronavirus outbreak on its activities in its assessment and we are not aware of any material uncertainties that may cast significant doubt upon the Group’s ability to continue as a going concern. Therefore, the financial statements continue to be prepared on the going concern basis”. The Company has 2,881,296,580 outstanding shares, and a Market Capitalization of NGN21.60bn as at the time of this report.
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UAC of Nigeria Plc remains an attractive investment option, and with the disposal of its loss making property subsidiary (UPDC), the company is poised to return to its profitability and dividend levels. We have analyzed the report, and found it’s fair price to be between NGN6.05 and NGN11.00, and therefore rate it a BUY. We anticipate that the projected economic fallout from the Covid-19 Pandemic might affect it’s market value, should that happen, we would recommend an ACCUMULATION of the Stock.
KEY RATIOS AND NUMBERS
| Basic Earnings Per Share | NGN1.86 |
| Trailing Price to Earnings ratio | 4.04x |
| Book Value Per Share | NGN21.01 |
| Return on Average Equity | 7.94% |
| Return on Average Asset | 4.48% |
| Profit After Tax Margin | 6.75% |
| Solvency Ratio | 16.55% |
| Total Asset | NGN107.59bn |
| Total Liability | NGN47.05BN |
| Total Equity | NGN60.54bn |
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Written by:
Basil Maduakor
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