UACN: Good Addition for Value Investors with 3-Year Outlook – WSTC
UAC Nigeria Plc shares have been considered a good addition for investors looking to hold the fast-moving consumer goods company for two to three years.
Data from the Nigerian Exchange (NGX) showed that UACN closed at N182 per share last week, following a mild rally that pushed the company’s unit price higher from N180.7 per share on a week-on-week basis.
UACN reached N203.95, its highest valuation over the past 52 weeks, before the pullback.
In its equity report, WSTC Securities Limited estimated the fair value of UACN at N224.94, noting that UACN’s acquisition of CHI Limited in Q4 2025 for ₦180.40 positively impacts Q1 2026 results.
This translates to about a 24% upside from the current market price of N182, reflecting a significant surge in the company’s earnings per share. Up by more than 323% year on year, UACN earnings per share increased from ₦1.06k in Q1 2025 to ₦4.49k in Q1 2026
In its projection, WSTC expects UACN to continue its positive earnings trajectory as the Group continues to fully benefit from CHI Limited synergy, supported by continued growth across its Packaged Food & Beverages and Paints segments, which contribute about 70%-80% of total revenue.
The firm said volatility in raw material prices is not expected, as the exchange rate environment remains stable, adding that demand for products is also expected to remain sustained in the market amid disinflation.
“Our analysis shows UACN is well-positioned to deliver stronger earnings in FY 2026, underpinned by improving operational performance and continued execution of its growth strategy.
“Our outlook on UACN remains as in our last report, a good addition for a value investor with a 2–3 year outlook”, WSTC Securities Limited said in its latest update on the consumer goods company.
UACN Plc commenced financial year 2026 on a strong note as growth in revenue and profitability was supported by the Packaged Food & Beverages segments and improved operating leverage.
In the period, UACN Plc revenue grew by 241% year-on-year from ₦56.00 billion in Q1 2025 to ₦191.22 billion in Q1 2026.
WSTC said the performance was largely driven by higher sales volumes and price adjustments across the packaged food and beverages business, which increased by 734% YoY from ₦19.20 billion in Q1 2025 to ₦161.07 billion in Q1 2026.
Analysts said this is mainly driven by the CHI Acquisition, which reflected in the segment. The paint business grew its revenue by 14% YoY from ₦10.00 billion to ₦11.60 billion in Q1 2026.
“We believe this is on the back of the 136 new stores and retail touch points added as at the end of Q4 2025”, WSTC Securities Limited stated.
However, the Edibles and Feed segment declined by 31% YoY from ₦26.03 billion to ₦18.00 billion in Q1 2026. This is caused by the procurement of raw materials in the previous period at higher cost than the current market rate, which significantly affected finished goods prices and the ability to compete in the consumer market, according to WSTC.
UACN Quick Service Restaurants (QSR) also declined by 6% YoY from ₦611.44 million to ₦576.44 million in Q1 2026, as some stores were closed during the period.
The company’s cost of sales increased by 227% YoY, from ₦41.75 billion in Q1 2025 to ₦136.41 billion in Q1 2026, reflecting higher production volumes.
However, revenue growth has continued to outpace the increase in cost of sales. As a result, gross profit increased by 285% YoY from ₦14.26 billion to ₦54.81 billion in Q1 2026.
Consequently, gross margin improved to 29% from 25% in the corresponding period of 2025. This shows improved operational efficiency. Operating expenses grew by 231% YoY from ₦8.12 billion to ₦26.86 billion in Q1 2026, driven by increased selling and distribution activities as well as administrative expenses. Selling expenses rose by 360% YoY from ₦3.38 billion to ₦15.55 billion, while administrative expenses increased by 139% YoY from ₦4.44 billion to ₦11.31 billion.
WSTC attributed the increase in distribution expenses to the expanded company following the acquisition of CHI Limited. Energy Inflation played a key role in rising costs. The tension in the Middle East during the second half of the quarter led to accelerated expense growth.
UACN’s operating profit remained resilient and grew by 355% YoY from ₦6.14 billion in Q1 2025 to ₦27.95 billion in Q1 2026, while operating margin improved from 11% to 15% over the same period.
The company’s non-operating loss increased from ₦1.10 billion (Q1 2025) to ₦5.36 billion (Q2 2025), largely due to a significant increase in finance expenses (Interest expense from the loan incurred to purchase CHI Limited), which rose 367% YoY to ₦14.81 billion.
However, this was partially offset by a foreign exchange gain of ₦6.76 billion, compared to an FX loss of ₦119 million in Q1 2025.
The largest contributor to this increase in finance expense is the foreign debt portion, which was valued at ₦180 billion at the time of CHI Limited’s acquisition.
As a result, profit before tax (PBT) rose by 348% YoY from ₦5.04 billion to ₦22.59 billion in Q1 2026. With a tax charge of ₦8.95 billion, profit after tax (PAT) increased by 311% YoY from ₦3.32 billion in Q1 2025 to ₦13.14 billion in Q1 2026. NEM Insurance Shareholders Approve N7.52bn Dividend for 2025
