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Healthy end year 2013 results for Livestock feeds as profits surge

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Background

Livestock Feeds Plc is a Nigeria-based company engaged principally in the manufacturing and marketing of animal feeds and concentrates. The Company’s products include finished feeds and 30 percent concentrates.

The finished feeds include chicks mash, growers mash, layers mash, hybrid mash, broiler breeder, turkey grower, duck starter, duck finisher, pig weaner and rabbit pellets.

The 30 percent concentrates include chicks concentrates, growers concentrates, layers concentrates, hybrid breeder concentrates, broiler starter concentrates, broiler finisher concentrates and broiler breeder concentrates.

Financial results for 2013

Livestock feeds Plc, the company that manufactures and markets animal feed product released its financial statement for the year ended December 2013 on the website of the exchange which showed gross revenue grew by 12.53 percent y/y to N6.11 billion from 12.53 percent in FY12

The company was able to translate top line double digit growth to bottom line as profit before tax (PBT) buoyed by 27.84 percent y/y to N283 million compared to N221 million in 2M12.

Profits after tax (PAT), in the review period surged by 46.25 percent y/y to N211 million in FY13 as against N144 million as at FY12.

Input costs were reduced as cost of sales margin slid to 88.72 percent in 2013FY from 89.23 percent as at 2013FY hence gross profits spurt by 17.92 percent to N690 million in 2013 as against 585 million recorded in 2012.

Operating expenses in the review period increased slightly by a single digit 8.73 percent y/y to N337 million compared to N310 million in 2013FY thus operating margin declined to 5.52 percent in 12M13 from 5.71 percent in 12M12.

Net margin, a measure of profitability and efficiency in the review period increased to 7.2 percent in 2013 from 6.60 percent in 2012, while operating profit margin climbed to 7.2 percent in FY13 as against 6.64 percent in 2012.

Financial risk has reduced as debt ratio shrank to 50.1 percent in the review period from 146.2 percent at FY12, while total borrowings declined by 6.48 percent to N870 million in 2013 as against N930 million in 2012.

Return on Average equity (ROAE) for the year ended December 2013 slumped to 12.22 percent as against 22.27 percent in FY12, while return on average assets also slid to 5.7 percent in 2M13 from 7.29 percent in 2M12.

Sales turn over in the review period were down to 3.53x in 2013 from 8.58x in 2012, while trade and other payables spiked by 150.23 percent to N924 million compared to N369 million in 2013.

It is taking the company longer time to collect money owned to it by debtors as collection period stood at 53 days which explains the surge in debtors and other receivable by 320.98 percent to N726 million in 2013FY from N172 million in 2012.

Current ratio stood at 1.54x in the review period which is lower than the 2.1x industrial average as trade and other payables climbed by 150.23 percent to N924 million in 2M13 compared to N369 million in 2M12.

Livestock’s total assets were up by jumped by 77.13 percent y/y to N3.67 billion from N2.07 billion in FY12.

Earnings per share EPS soared by 46 percent to 17.56k in FY13 from 12.01k in FY12.

Share performance and outlook

The company’s share price has been rising by 18.73 percent in the past year to close at N3.17- March 31st 2014 on the floor of the exchange.

Livestock Feed had market capitalization of N6.54 billion on the same day.

Current price earnings ratio ( P/E Ratio)   and Price to sales ration were 28.21x and 6.0x respectively.

BALA AUGIE