Flour Mills Explains N40bn Rights Issue, Posts N9.4bn  Profit  

MARKET NEWS

Flour Mills of Nigeria (FMN) Plc has said the N39.9 billion being raised from existing shareholders was part of strategy to grow and build long-term value for all stakeholders.

The leading player in the food and agro-allied sectors in Nigeria is making  a Rights Issue of  1,476,142, 418 ordinary shares of 50 kobo each  offered at N27 per share to existing shareholders at the ratio of nine  new ordinary shares for every 16 ordinary shares.

The management and some board members were, last Thursday, at  the Nigerian Stock Exchange (NSE) to present the ‘Facts Behind the Issue’  to  fund/portfolio managers, shareholders and other stakeholders in the investment community.

Speaking at the event, the Chairman of  FMN, John Coumantaros said Rights Issue  is  being undertaken primarily to pay down some of the company’s outstanding short-term debt in order to reduce its finance costs which have increased significantly in recent times, and reshape its  balance sheet.

In his presentation, the Group Managing Director, FMN, Paul Gbededo said : “The Rights Issue is part of our strategy to grow and build long-term value for all stakeholders. The proceeds from the Rights Issue will be used to strengthen the company’s capital base by deleveraging our balance sheet, supporting our working capital needs and positioning the company to exploit value-accretive opportunities, whilst giving greater operational and financial flexibility to ensure business growth and continuity.”

Meanwhile, the company has released its results for the nine  months ended December 31, 2017 showing  impressive  performance.

 Group revenue was N427.5 billion   in 2017, up by 10 per cent from N389.9 billion recorded in the corresponding period of 2016. Profit before tax (PBT) rose 89 per cent from N10.3 billion  in 2016 to N19.50 billion in 2017, while profit after tax (PAT)  rose by 80 per cent from N7.39 billion to N13.27 billion. Earnings per share improved from 250 kobo to 456 kobo.

According to the company, the food business is responsible for an increase of N44.7 billion of the Group’s turnover, coming from its  Flour, Pasta and noodles product portfolio.

The packaging business of the group contributed N1 billion to the group’s profit, an increase of 150 per cent.

Commenting on the results, Gbededo said: “We are delighted to report another quarter of solid performance, despite harsh operational environments, which have been compounded further by traffic congestions in Apapa.  Our food business has continued to show impressive results, in line with our strategy to lead the market in all major categories. We shall continue to drive efficiency and grow our footprints in the Agro-allied segments also in achieving our core focus of feeding the nation, every day.”

 

Related Articles