Chairman, DN Meyer,  Mr. Remi Omotoso

By Goddy Egene

Some  stockbrokers  have called for caution regarding the share price movement of DN Meyer Plc, which appreciated by a whopping 261 per cent within one month since the market-making commenced.

The stock, which has Greenwich Securities Limited as its market maker, was among the 16 stocks the market-making programme commenced with on September 18, 2012.

THISDAY’s analysis of the performance of  the 16 stocks  after one month of  market-making on the Nigerian bourse  showed that DN Meyer soared by 261 per cent from N0.74 to N2.67. The next highest mover  was Sterling Bank Plc, which rose by 36 per cent from N1.31 to N1.79. Some recorded growth between 5.4 per cent and 25 per cent, while some others declined between 0.4 per cent and `16 per cent.

However, some stockbrokers, who spoke to THISDAY on the condition of anonymity, said the price movement on DN Meyer shares should be watched carefully so as not to create an artificial pricing.

According to them, recent performance of the company had not shown any major improvement that should warrant such a price movement within one month.

DN Meyer, which has not paid dividend for some years now, posted a loss of N93.74 million for the 2011 financial year.  The loss was, however, lower than the  N232 million loss posted in 2010.

The Chairman of the company, Mr. Remi Omotoso, told shareholders last July that  worried by the negative impact of bank charges on its operations,   the  paint manufacturing firm,  had resorted to financing  its operations through internally generated revenue.

He added that the company also to access the Bank of Industry/Central Bank of Nigeria CBN) intervention fund.
“All the company’s operations were financed from internally generated revenue. The financial charges currently being paid were based on past exposure to various banks,” he said.
He disclosed that  a window of escape was being explored through   the BOI/CBN intervention fund.
“This will  not only reduce our heavy financing charges but will also naturally improve our cash flow thereby making fund available for business expansion and consequently profitability,” Omotoso said.