Investors Are Dumping NASCON after Dividend, Bonus Share Notice
Investors take early profit on NASCON Allied Industries Plc despite good earnings performance in 2023, according to the company’s audited results. With a market valuation of about N128 billion, the company’s share has been on a downward trend since its earnings results were released.
In the last seven trading sessions, NASCON has lost more than 27% of its market capitalisation due to sustained selloffs by some investors in the local bourse. NASCON reported a remarkable 151.0% year-on-year earnings per share, EPS, growth to N5.18 from N2.06 in 2022.
The investors’ key metric was boosted by strong profit performance supported by about 38% year-on-year growth in revenue print.
In a statement filed with regulator, NASCON’s board proposed a bonus issue of two (2) new ordinary shares of 50 kobo for every hundred (100) existing ordinary shares as of the close of business on 06 May 2024. This is coming ahead of merger plan with Dangote Sugar and Dangote rice.
The company however added that only shareholders whose names appear in the Register of Members as at the close of business on 3 May 2024 will benefit from the bonus
Details from the company’s financial scorecard showed that the company grew its topline grew markedly by 37.5% in 2023. The sale was majorly supported by higher income from the Salt business. Its salt business which contributed about 94% to the top line revenue grew by +41.3%.
Revenue from the Seasoning however declined by 1.1%slowed. Sales in the Northern region grew by 44.8%, and remained its core market with the highest growth, with the Eastern (+35.3%) and Western (+16.8%) regions also recording growth.
The company’s gross margin increased by 13.10 percentage points to 54.8% in 2023, underpinned by the strong revenue growth versus a moderate increase in cost of sales. On the profitability side, the company’s margins grew stronger in 2023 despite a tough business environment. Meanwhile, operating expenses surged by 56.1% following increases in delivery expenses and employee costs.
Due to higher leverage activities, Nascon’s net finance costs increased by 69.1% as a result of a steep increase in interest expenses which surged by +106.6%. Details showed that NASCON’s interest on borrowings printed higher at N5.49 billion.
In the period, finance income rose 135.1% due to higher interest income on short-term fixed deposits. At the end of 2023, its profit before tax grew by 145.9% to N20.59 billion in 2023 from N8.37 billion. Following a tax expense of N6.86 billion, profit after tax grew by 151.0% to N13.73 billion from N5.47 billion. #Investors Are Dumping NASCON after Dividend, Bonus Shares Notice
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