Flour Mills of Nigeria Plc has said
that the proceeds of its planed N39.9
billion rights issue would improve the
capital base of the company.
The Chairman, Board of Directors,
Flour Mills, Mr. by John Coumantaros,
stated this at the Nigerian Stock
Exchange during a meeting with fund/
portfolio managers, shareholders and
other stakeholders in the investment
community to present a facts behind
the issue.
Coumantaros, who presented a
detailed breakdown and analysis of the
company’s plan to raise N39.9 billion
by way of rights issue, explained that
a total of1,476,142, 418 ordinary shares
of 50 kobo each will be offered at N27
per share to existing shareholders at the
ratio of 9 new ordinary shares for every
16 ordinary shares held as at the close
of business, on 8 December 2017.
Coumantaros noted that the 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 reshaped the company’s balance
sheet.
The Group Managing Director, Paul
Gbededo on his part, stated: “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.”
Flour Mills Nigeria reported a profit
after tax of N13.27 billion for the
nine months ended December 2017,
compared to N7.39 billion, in 2016,
representing a year-on-year increase of
80 per cent.
The group in a financial statement
made available to the Exchange, also
recorded profit before tax of N19.50
billion in contrast to N10.3 billion in
2016, accounting for a year-on-year
growth of 89 per cent.
The group’s revenue stood at N427.5
billion, up from N389.9 billion in 2016,
giving a 10 per cent year-on-year
growth.
The company’s earnings per share
stood at 456 kobo, up from 250 kobo, in
2016, showing an increase of 82 per cent
year-on-year growth.
According to the group’s
management, the food business was
responsible for an increase of N44.7
billion of the Group’s turnover,
coming from its Flour, Pasta and
noodles product portfolio.
It noted that the packaging business
of the group contributed N1 billion to
the group’s profit, an increase of 150
per cent.
The management noted that with
a view to significantly improve on
working capital, whilst reducing
debts, the company recently
proceeded with its rights issue
programme, adding that it is expected
that the Programme will strategically
position the company for sustainable
growth.
Commenting on the result,
Gbededo, stated: “We are delighted
to report another quarter of
solid performance, despite harsh
operational environments, which
have been compounded further by
traffic congestions inApapa.
“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, everyday”.

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