Presco gets shareholders’ approval to raise N3bn rights issue
Health and Beauty
IMAGE: Uday Pilani, managing director of the company »
Presco plc has announced through the Nigerian Stock Exchange (NSE) its plans to raise up to about N3 billion by way of rights issue following approval of its shareholders. The right issue will enable the Nigeria agriculture giant embark on projects that will drive growth and maximise the value of shareholders.
Presco made this announcement during its annual general meeting, saying that the directors of the company believe that the proposed rights issue presents an excellent opportunity for existing shareholders to increase their investment in the company, which has consistently recorded impressive results and also paid dividends to its shareholders over the years.
The company says that formal applications as well as the relevant documentation have been submitted to the appropriate regulatory authorities for approval, also stating that the details of the price and volume of shares to be issued were not revealed.
“The directors have decided to undertake the rights issue to give the company financial flexibility,” said Uday Pilani, managing director of the company, in a statement released on its website.
“The net proceeds of the rights issue will be used to reduce the company’s debt and foreign exchange exposure,” he said.
For the first six months through June 2014, Presco’s net income surged by 82.49 percent to N1.08 billion compared with N519.18 million the same period of the corresponding year (HY) 2013, the most impressive results among peer quoted companies.
The company’s top-line performance was also impressive as revenue increased by 3.51 percent to N4.06 billion HY 2014, from N3.92 billion as of HY 2013.
The stellar performance is coming amid the importation of cheap palm oil by illegal importers, which contributes to percentage drop in profits of operators in the industry.
Based on BusinessDay analysis, Presco’s net margin, a measure of profitability and efficiency, jumped to 26.59 percent in 2014, from 15.1 in 2013.
Total assets were up by 6.06 percent to N34.64 billion in HY 2014, as against N32.66 billion as of HY 2014.
Presco is a fully-integrated agro-industrial establishment with oil palm plantations, a palm oil mill, a palm kernel crushing plant and a vegetable oil refining and fractionation plant, he said, saying “it is the first of its kind in West Africa.”
The company also specialises in the cultivation of oil palm and in the extraction, refining and fractionation of crude palm oil into finished products.
Presco is planting 1,500 hectares this year and targeting 20,000 hectares by 2020, Pilani said. It already has 11,760 hectares planted, according to its website. Presco doubled processing capacity at its palm-oil mill to 70 metric tons an hour last year and is expanding its refinery to 300 tons a day from 100.
“In making this decision, the directors have considered the current challenging operating environment,” said Pilani.
Article Credit: Businessdayonline