BusinessDay 26 Mar 2018

Monday 26 March 2018
C002D5556
BUSINESS DAY 35
Stocks Currencies Commodities Rates + Bonds Economics Funds Week Ahead Watchlist P.E
Nigerian firms can tap into domestic
debt market on lower rates Page 36
ECONOMY
Investors’ swoop on GSK, driven by
high yield from special dividend
MICHEAL ANI
Investors have been
lunging for GlaxoSmithKline
PLC’s stock
price, immediately the
company announced
a special dividend of N7.10k
plus a final dividend of 40k.
The above proposed payout
sent dividend yields to as high
as 30 percent, which means
that investors expects a higher
return on their investment?
The consumer goods
company said the special
dividend would be paid from
retained earnings brought
forward as at year ended 31st
December 2017, including
profit sales of drinks as at 31
December 2016.
Stock price has rallied
some 18 percent year to date,
outperforming the market all
share indexes at 8.4 percent,
and closing at 25.50 the previous
week.
One would have expected
the market to react to Glaxo-
SmithKline giving its disappointing
fourth quarter
performance.
The fast moving consumer
goods (FMCG) industry and
health care firm recorded a
88.41 percent in full year 2017
net income to N486.43 million
while sales increased by
11.90 percent to N16 billion.
The company was beleaguered
by rising material
costs as production cost
surged 114.3 percent from
N5.4 billion in 2016 to N11.6
BALA AUGIE
Twenty Nigerian
firms have declared
a total of N412.96
billion so far in 2017 as
shareholders await more
declarations.
billion in 2017.
GlaxoSmithKline Consumer
Nigeria Plc., one of Africa’s
largest consumer healthcare
companies, producing leading
brands such as Panadol with
a market cap of N30.5 billion,
according to data from the
Bloomberg Terminal.
The company like other
top pharmaceutical players
suffered a great challenge
on the back of the lengthy
recession that hammered the
Nigerian economy in 2016,
making the country go into
its first full-year contraction
in 25 years, and thus triggered
acute dollar shortage that
stifled the non-oil sector, as
Africa most populous nation
contracted 0.5 percent to
record its worst performance
since 1991.
The sector was fraught
with shortage of naira liquidity
as an increase in government
borrowing at that time
spurred banks to invest in the
safety of sovereign debt rather
than lending to businesses
or consumers, a situation that
Lists of dividend declared so far in 2017
drained cash out of the system,
as the sector witnessed
high operating cost since
most of the raw materials are
mainly imported.
However, the economy
managed to limp off the recession
in the second quarter
of 2017 after expanding 0.55
percent, on the back of a
rebound in oil prices, following
an agreement reached
by OPEC members in 2016
to shave some 1.2 mbpd off
the market to nip a growing
supply glut in the bud
and relaxed hostilities in the
Niger-Delta.
In addition, the non-oil
sector recorded a positive
growth for the second consecutive
quarter, spurred
by on-going recovery in the
manufacturing sector due to
improved Foreign Exchange
(FX) liquidity.
Pharmaceutical firms like
GSK saw a rebound in profit
and economic activities,
which attracted investors’
appetite and interest to its
stocks.
If you are an investor or
shareholder, please pay attention
to the data gleaned
by BusinessDay Markets
and Intelligence.
Zenith Bank, United
Bank for Africa (UBA),
Access Bank, GTBank and
Stabic IBTC has a combined
dividend of N186.68
billion, which is 45.31 percent
of the total figure of
N412.96 billion.
The above figure that is
unsurprising since lenders
have robust earnings,
free cash flow and strong
retained earnings or accumulated
reserve.
A breakdown of the figure
shows Zenith Bank
declared a final dividend
of N2.45 for every share of
N0.50 for the year ended
December 2017, which
translates to N76.43 billion.
The lender’s profit before
tax rose by 29.80 percent
to N203.46 billion in
the period under review
Continues on page 36
SHORT TAKES
105.26 billion
United Bank For Africa
Posts full year group Pre-tax
Profit before of N105.26
billion naira versus 90.64
billion year ago . While the
full year group total comprehensive
income N106.36
billion naira versus 138.15
billion naira year ago.
It however propose final
dividend of 0.65 naira per
share.
2.5 million tons
Nigeria grew 3.7 million
metric tons of rice in 2017,
a 4 percent increase from
a year earlier, according to
the U.S. Department of Agriculture.
At the same time,
imports rose 19 percent to
2.5 million tons, the USDA
said.
Many imports are smuggled
in from Benin, which
despite a population of 11
million -- barely 5 percent
of Nigeria’s population
-- is now the world’s biggest
buyer of rice from
Thailand, the number two
exporter globally.
N931.23billion
The full year 2017 state
IGR figure hits N931.23bn
compared to N831.19bn
recorded in 2016. This
indicates a growth of 12.03
percent year on year.
At the end of full-year
2017, total revenue generated
by states was put at
N432.65billion as against
N409.09billion in half year of
the same period.
The net revenue allocation
in year 2017 is put at N1.73
trillion while the total revenue
available to the states is
put at N2.67 trillion.
However, the value of foreign
debt stands at $19.9bn while
domestic debt hits N3.35
trillion at the end of 2017 full
year respectively.
BusinessDay MARKETS INTELLIGENCE (Team lead: BALA AUGIE - Analyst: DIPO OLADEHINDE, ENDURANCE OKAFOR, BUNMI BAILEY Graphics: DAVID OGAR )
BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors that influence investor’s decision-making
Email the BMI team patrick.atuanya@businessdayonline.com