The investigation has shown that between May 22 and July 6, 2020, Excelsior Shipping Company plc, the substantial shareholder in Flour Mills Nigeria plc, has mopped up the shares of the flour miller as shown in various transactions tracked by BusinessDay.
Details of the share purchases in the past 5 weeks, valued at N145.5 million executed in 10 transactions on the Nigerian Stock Exchange (NSE), show Excelsior Shipping bought the shares of Flour Mills Nigeria at a premium price of N21, which had its stock price closed at a low of N18 as at Tuesday, July 7, from week open high of N18.5.
The NSE mandates companies to disclose every share dealings by insiders. Excelsior Shipping is a company registered in Liberia. The beneficial owner of Excelsior Shipping Company is a trust established by the late John S. Coumantaros. In every dividend paid to Flour Mills shareholders, which Excelsior Shipping Company Limited is the majority shareholder, it gets a large chunk.
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Also, between May 22 and May 29, Excelsior bought 1,229,764 units at N21 per share, and between June 1 and 3, it bought 500,000 units at the same price. On June 22, at N21 per share, Excelsior bought 200,000 units of Flour Mills; June 24 (500,000 units); June 26 (1.8m units); June 29 (2 million units), and July 1 (250,000 units).
BusinessDay checks further show that Excelsior also bought 250,000 units of Flour Mills shares at N21 on July 2; on July 3 it bought 100,000 units while on July 6 it paid the same N21 for 100,000 units.
Flour Mills is the market leader in food and agro-allied products in Nigeria. The Group is primarily engaged in flour milling, production of pasta, noodles, edible oil and refined sugar, production of livestock feeds, farming and other agro-allied activities, distribution and sales of fertilizer, manufacturing and marketing of laminated woven polypropylene sacks and flexible packaging materials, operation of terminals A and B at the Apapa Port, customs clearing, forwarding agents, shipping agents and logistics, etc.
Excelsior Shipping is no doubt paying more to increase its equity stake in the viable Flour Mills, which its stock price closed at a low of N18 as at Tuesday, July 7 from week open high of N18.5. The shares had reached a 52-week high of N24 and a corresponding week low of N12.50. Flour Mills has 4,100,379,605 shares outstanding.
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According to the Register of Members on March 31, 2019, apart from Excelsior Shipping Company Limited with 2,256,437,696 (March 31, 2018: 2,242,727,789), representing 55.03 percent of the paid up share capital, respectively, no other individual shareholder held up to 5 percent of the issued share capital of the company.
Flour Mills of Nigeria third-quarter (Q3) results for the year 2019/2020 show impressive growth. Nigeria’s leading integrated food business and agro-allied Group recorded a profit before tax (PBT) increase by 23 per cent to N3.7 billion in Q3, and by 9 per cent to N12.3 billion nine months period. The Group continues to make progress in its purpose of ‘feeding the nation, every day’.
The Group’s revenue in Q3 2019/20 was N152.7 billion, compared to N130.9 billion in Q3 2018/19 (17% – YoY growth). For the nine months ended December 31, 2019, Group revenue was N423.5 billion, representing a 6 per cent increase compared to the same period last year. Gross profit increased by 11 per cent in Q3 and by 3 per cent year-to-date (YtD), and gross profit is N47.8 billion, compared to N46.6 billion last year.
Finance cost reduced to N4.3 billion, a significant drop (20%) compared to N5.3 billion in Q3 2018/19 (21% year-on-year (YoY) decline). Profit before tax increased by 23 per cent to N3.7 billion in Q3 and by 9 per cent to N12.3 billion YTD. Net cash generated YTD was N7.9 billion, compared to N7.2 billion in the prior year.
“The revenue growth in these segments did not come as a surprise, as we had anticipated better volume supported performances from the edible oil and sugar segments, given the closure of the borders and the end of year festivities,” note research analysts at Lagos-based Vetiva.
They also note that Flour Mills has been well positioned for increased demand from the closed borders, having expanded and regionalised their pasta and ball-food product segments with the introduction of the Mai Kwabo and Dawavita brands in the North; this was in addition to their already diversified portfolio and expanded production capacity for the pasta and semovita brands.
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