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Nascon Allied Industries On Steady Path To Growing Profitability



Going by the financial performance of Nascon Allied Industries Plc, the company is on a steady path in growing its profitability.

Over the years, the company has remained strongly committed to executing its sustainable growth strategy, thereby growing consumer trust and shareholder confidence.

Recently, the company released its half year result for the period ended June 30, 2018, recording an impressive period during the period. Its profit before tax grew by 12.40 per cent to N3.24 billion from N2.88 billion, profit after tax rose by 12.40 per cent to N1.96 billion from N2.2 billion in the period under review, while earnings per share increased by 12.16 per cent to N1.66 from N1.48.

The company’s revenue went up to N12.82 billion as against N12.72 declared in the previous year, 2017, cost of sales went down to N8.66 billion from N8.73 billion, leading to gross profit of N4.16 billion from N3.996 billion, representing an increase of 4.17 per cent.

Investment income stood at N354.015 million from N86.502 million, while administrative expenses rose by 14.66 per cent from N808.696 million to N927.291 million in 2018.

The company grew its total assets by 23.43 percent to N29.891 billion as against N24.217 billion in H1, 2017, while shareholders fund up by 19.78 per cent to N9.762 billion from N8.15 billion in 2017.

It recorded a net profit of N2.2 billion for the first half of the year 2018.

Also, during the first quarter of the company financial year ended March 31, 2018, the company reported revenue of N6.77 billion compared to N6.46 billion reported for the period ended March 2017. This represents five per cent increase for the comparative period in 2017.

Profit before tax was N1.56 billion for the period ended March 2018, a 33 per cent increase from the N1.17 billion reported for the period ended March 2017. The company’s profit after tax for the period ended March 2018 was N1.06 billion compared to N797.78 million reported March 2017. This represented a 33 per cent increase for the comparative period in 2017, while earnings per share grew to N1.60 for the period compared to N1.20, representing 33 per cent increase for the comparative period in 2017.

The shareholders of Nascon Allied Industries, early this year approved the N3.97 billion dividend recommended for the year ended December 2017. The dividend, which translates to 150 kobo per share, was approved by shareholders of the company this year.

The chairperson of the company, Mrs. Yemisi Ayeni said the 150 kobo dividend represented a significant improved from 2016 when 70 kobo was paid, totally N1.85 billion.

According to her, through intense focus and operational discipline, the company delivered unprecedented returns in its salt segment and also increased sales posted in the highly competitive seasoning market.

Ayeni said the revenue increased from N18.2 billion in 2016 to N27 billion in 2017. Profit before tax jumped by over 100 per cent from N3.5 billion in 2016 to N7 billion, while profit after tax rose 121 per cent from N2.4 billion in 2016 to N5.3 billion.

She explained that they leveraged on their core competencies, operated flexible pricing of their products, expanded their fleet operations focused on reducing fleet turn-around time, while deploying compelling brand communications to grow value.

Ayeni said, “We are optimistic about the year ahead, as we remain strongly committed to executing our sustainable growth strategy, thereby growing consumer trust and shareholder confidence.”

On his part, the managing director of Nascon Allied Industries, Mr. Paul Farrer, said company had embarked on strategies to ensure resumption in the production of tomatoes paste and vegetable oil to boost operations and bottom-line.

According to him, the company would resort to backward integration to ensure revival of the two production lines, adding that the company would continue to leverage synergies and enhance efficiencies across the business operations to curtail costs.

The executive director, Commercial, Fatima Aliko Dangote, also assured the shareholders of good returns on their investments, noting that the company was doing so much to enhance their stakes on a consistent basis.

According to her, we are expanding, we are investing on new refinery for our salt, and we are also looking at innovations.

She said, “We place shareholders interest so high because they have actually trusted us, they have invested in our business and as you can see, regardless of our challenges, we are still able to push really hard and declare profits. We have to take our shareholders very seriously so that they can keep trusting in us, and by so doing, more people will keep buying our shares and hold us in high regard.”

Capital market analysts noted Nascon has significantly improved its top line performance in its quarterly results over the prior period.

They added that the company’s strategy to diversify product lines, push more volumes and market share led to the huge improvement in revenue.

Speaking on the company’s performance, the chief operating officer of InvestData Consulting Limited, Mr. Ambrose Omordion said that the company’s result is very impressive, saying that the new investments made by the company would enhance profitability and robust dividend to shareholders in the current financial year.

Nascon is engaged in the refining and marketing of salt of different grades; kitchen, table and industrial salt. It also engages in the production and refining of seasoning, tomato paste and vegetable oil.  The company was incorporated on  April 30, 1973, fully privatised in April, 1982 and became listed on the Nigerian Stock Exchange (NSE) on October, 1992. In 2013, the Company entered the Foods segment (seasoning) with DAN-Q cubes. Nascon began to engage in the sale of seasoning, tomato pastes and vegetable oil in 2015 and continue to expand its operations. The diversification drive of the company into other activities necessitated the change of name back in 2014 to Nascon Allied Industries Plc from National Salt Company of Nigeria Plc.