Cutix appoints new chief executive Friday, Nov 14 2008

Cutix Plc has appointed Mr. Ifeanyi Uzodike as the new chief executive officer to replace Chief Ajulu Uzodike, the founder and largest shareholder of the company who stepped down from his dual roles of chairman and chief executive officer on November 1, 2008.

Chief Ajulu Uzodike meanwhile retains the chairmanship of the board of the company and has promised to continuously support the new management in the quest to build on the legacy of sustained growths over the years.
The separation of the positions of chairman of board of directors and chief executive officer is a key requirement of the code of corporate governance.  The separation of the two offices further enhanced the corporate governance standard of Cutix, which recently transited from the second tier, where it was initially listed, to the main tier of the Nigerian Stock Exchange (NSE).
On the basis of its operational performance and corporate governance, NSE has nominated Cutix as one of the two engineering companies to be considered for the NSE President’s Merit Award.
Speaking at the yearly general meeting of the company, Chief Ajulu Uzodike said the board unanimously decided on Ifeanyi Uzodike as the rightful successor that could consolidate the growth of the company.
According to him, the appointment of the Ifeanyi Uzodike was guided by his commitment to the ideals and mission of the company and proven leadership traits within and outside the company.
He noted that since his employment in 1991, Ifeanyi has held several management positions that put in good stead to lead the company as the chief executive.
He added that one of the reasons for taking Cutix to the Exchange was to help create a culture where good business practices about separation of ownership and management are followed so that the company would have a good chance of surviving the founder and founding owners and stakeholders.
He assured that the new management would sustain the growth of the company pointing out that the company has commenced implementation of a new business development plan that would help to sustain steady growth in turnover and profitability in the years ahead.  He pointed out that the company’s high level of investments enhances its prospects for growth in the short to medium term adding that the international quality of its processes and the highly reliable quality of its products should enable the company to get a bigger market share for its products.
“We have reached an advanced stage in the inauguration of our newly acquired power cable machines.
Other machines have been acquired and are being installed to increase our manufacturing depth. A new factory site is more than 50 per cent developed,” Uzodike said.
He said the company would continue to rely on internally generated funds to finance its growth projects although it could here ad there use small amounts of medium term debt.
The intrinsic profitability of Cutix had dropped by three percentage points in the immediate past year, leading to decline in distributable earnings to shareholders.
Audited report and accounts of Cutix for the year ended April 30, 2008 showed that pre-tax profit margin dropped from 18 per cent in 2007 to 15 per cent in 2008, which impacted negatively on actual profits before and after tax in spite of 23 per cent growth in sales.
With 53 per cent decline in basic net earnings per share, the board of the company has recommended retaining cash dividend per share of 12 kobo. The company had paid cash dividend per share of 12 kobo in addition to a bonus issue of one for one in 2007.
The audited report showed that profit after tax dropped from N121.7 million in 2007 to N114.5 million in 2008. Profit before tax had risen marginally by 4.3 per cent to N195.6 million in 2008 as against N187.6 million in 2007.

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Market capitalisation hits =N=175bn Friday, Nov 14 2008

The Nigerian Stock Exchange (NSE) continued its upward swing yesterday as market capitalisation of quoted companies appreciated by N175 billion to close at N8 trillion, representing an increase of 2.23 per cent.
The All-share index of the NSE also rose by 2.23 per cent to close at 36,538.14 points in contrast to 35,738.02 points recorded as its opening index.
The market had gained about N611 billion within five days of rebound as most blue chip companies continued to record some considerable levels of appreciation.
Yesterday, 65 stocks appreciated in price. Guinness led the gainers’ chart N4.49 to close at N94.37. Nigerian Breweries followed with N1.97 to close at N41.51. Zenith Bank appreciated by N1.29 to close at N27.14. First Bank added N1.22 to close at N25.70. Nigerian Bottling Company gained N1.19 to close at N37.99. UBA added 84 kobo to close at N17.73 while Glaxosmithkline rose by 83 kobo to close at N17.59.
Other gainers included Dangote Sugar that gained 81 kobo to close at N17.12; RT Briscoe rose by 77 kobo to close at N16.30 while GTBank added 76 kobo to close at N15.98.  On the downward side, 22 stocks depreciated in price. Oando led the losers’ chat with N6.59 to close at N125.28, Julius Berger followed with N2.80 to close at N61.60, Flour Mill lost N2.42 to close at N46.51, Benue Cement Company shed N1.95 to close at N37.17, BOC Gases dropped by 94 kobo to close N17.97 while UAC Property shed 59 kobo to close at N23.62.
Also, Cement Company of Northern Nigeria lost 54 kobo to close at N10.29; Vitafoam lost 37 kobo to close at N7.10, Ekocorp shed 34 kobo to close at N6.49, while Neimeth dropped by 26 kobo to close at N4.98.   A total of 380.32 million shares valued at N3.68 billion exchanged hands in 10,426 deals. Analysis of transactions showed the banking sub-sector as the most active leading with a turnover of 229.97 million shares worth N2.97 billion in 6,301 deals. Banking sub-sector’s turnover was boosted by trading in the shares of Oceanic Bank with a turnover of 42.94 million valued at N606.96 million in 899 deals and Access Bank, which recorded a turnover of 34.69 million valued at N303.58 million in 684 deals.
The insurance sub-sector followed with a turnover of 94.79 million shares valued at N175.57 million in 1,296 deals. The sector was driven by the activities on Investment and Allied Assurance with a turnover of 15.1 million shares worth N7.55 million in 113 deals.

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UACN Q3 profit hits N5bn Friday, Nov 14 2008

UAC of Nigeria (UACN) Plc consolidated its positive outlook in the third quarter as increased business efficiency uplifted the company’s intrinsic profit-making capacity and actual profit, putting it in good stead to meet its forecasts.
Interim report and accounts of UACN for the third quarter ended September 30, 2008 showed that the company’s profit-making capacity improved with a pre-tax profit margin of 18.5 per cent in 2008 compared with 14.6 per cent in comparable period of 2007.
The report showed that turnover rose by 28 per cent while pre and post tax profits grew by 62 per cent and 60 per cent respectively.
The nine-month report showed that UACN’s sales stood at N28.1 billion in third quarter 2008 as against N22 billion recorded in similar period of 2007. Profit before tax rose from N3.21 billion in 2007 to N5.2 billion in 2008. Profit after tax also jumped from N2.3 billion in 2007 to N3.7 billion in 2008.
The third quarter report already indicated earnings per share of N2.88 as against N1.79 recorded in third quarter 2007, raising expectations that the company might increase dividends.
The third quarter report also put the food-focus conglomerate in good stead to achieve its profit forecasts for the current business year ending December 31, 2008.
The board of UACN recently projected that net earnings would grow by about 52 per cent while turnover is expected to grow by 27 per cent.
The company projected that turnover could cross the N40 billion mark while profit before tax is expected at N6.58 billion in 2008. Profit after tax is estimated at N4.64 billion in 2008.
With basic net earnings per share expected at N3.63 per share by the end of this business year, as against N2.39 per share recorded in 2007, there are strong indications that the company may increase cash payouts this year.
Although its performance lagged in 2007, UACN had increased cash payouts by 70 per cent with a total dividend per share of N1.70 for the 2007 business year as against N1 paid for 2006.
Market analysts said a strong performance and major increase in distributable earnings would serve as impetus for the conglomerate to possibly raise cash payouts beyond 200 kobo mark or hearken to shareholders’ requests with a combination of cash payout and bonus issue.
Mr. Larry Ettah, group managing director, UAC of Nigeria (UACN) Plc has said key strategic initiatives taken to deepen core businesses and concentration of more resources on growth areas would lead to better returns to shareholders in the years ahead.
He said the focus of management would be on ensuring impressive simultaneous growths in gross revenue and profitability to make sure the gains of the business development drives reach shareholders.
According to him, the company is focusing its investments in areas with significant revenue growth opportunities in order to be in a position to drive overall performance and ensure that returns are not only adequate but sustainable.
He said the conglomerate has made significant carpet investments in the flavoured and milk yogurt, ice cream, cereal and restaurant businesses
He added that the company has embarked on expansion of its property profile as well as renovation and remodeling of its restaurants to meet varying demand of customers.
The UACN group managing director said the company’s growth strategy is food-focused which explained why there have been more investments in that area.
He said the decision by the board to pay cash dividend rather than the clamour for bonus issue was in the best interest of the company pointing out that it would benefit the shareholders more to build sustainable growth over the years.
UACN had recorded strong growth in sales in 2007 but high costs of sales and selling and distribution moderated the impact on the bottom-line, leaving the net earnings down by 4.6 per cent. Group turnover rose by 11 per cent to N31.5 billion in 2007 as against an increase of 4.7 per cent to N28.4 billion in 2006.
Profit before tax and minority interest grew by 31 per cent to N5.09 billion in 2007 compared with N3.89 billion in 2006. Profit after tax, but before minority interest and extraordinary items, jumped from N2.82 billion in 2006 to N3.78 billion in 2007. However, with no extraordinary items in 2007 and 50 per cent growth in minority interest, net earnings dropped by 4.6 per cent from N3.2 billion in 2006 to N3.06 billion in 2007. Basic net earnings per share thus dropped from N2.49 in 2006 to N2.39 in 2007.
Also, underlying profitability ratios showed a largely downward trend in 2007. Gross profit margin dropped from 25 per cent in 2006 to 23.5 per cent in 2007. Pre-tax profit margin improved from 14 per cent in 2006 to 16 per cent in 2007. Return on total assets dropped from 12 per cent in 2006 to 9.8 per cent in 2007 while return on equity slipped to 18 per cent in 2007 compared with 20 per cent in 2006.

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