Investors in Glaxosmithkline Consumer
Nigeria Plc (GSK) last week witnessed a record 55.6 per cent capital
gain following a bullish trend at the stock market.
The shares gained N7.90, rise from N14.22
to close at N14.22 per share in a week that 40 stocks appreciated.
Market operators said the renewed demand for GSK could be for
speculative reasons.
The company is to divest its drinks
bottling business that manufactures Lucozade and Ribena to Suntory
Beverages Nigeria Limited.
The planned divestment followed the purchase
of business by Suntory Beverages Japan from GSK United Kingdom, the
parent firm of GSK Nigeria in 2013.
Explaining the divestment, an official of
the company had said: “The drinks bottling used to be part of our
business but we belong to a group, GSK which has divested from that
line of business and we need to maximise our potential. We are facing
the direction our parent company is facing. Other subsidiaries have
divested the drinks business but Nigeria was allowed to continue. But
the divestment will enable us release the assets to Suntory Beverages so
that we can concentrate on those things we are good at,” an official of
the company said.
The official said the divestment will
give the company a lot of potential to grow its business, saying as a
forward looking company it has hedged against the impact of the
divestment.
In a notification to the NSE, the Company
Secretary of GSK Nigeria, Mr. Uche Uwechai had said the principal terms
of the offer would set out in a circular to the shareholder.
“If the shareholders and regulators were
to approve the sale, the retained business of GSK Nigeria would include
its wellness, oral healthcare, nutrition and pharmaceutical/vaccines
businesses and the company would remain listed on the NSE,” he said.
The company has also indicated that
subject to the completion of the disposal and receipt of the purchase
price the company will pay a special dividend of N716 million (60 kobo
per share) to the shareholders.
Analysts at FSDH Merchant Bank said going
by their estimate, the contribution of drinks business to the total
revenue of the company is not less than 35 per cent, adding that the
divestment is one of the negative factors that would affect the
company’s performance going forward.
But on the positive side, the analysts
cited the company’s new route to market, long standing reputation and
brand activation to improve market share.
According to their forecast, GSK will
grow its revenue at a rate lower than the inflation rate in the medium
term. They estimate a turnover of N24.89 billion, N27.38 billion,
N30.12 billion, N31.25 billion and N32.41 billion for the periods ending
December 2016, 2017, 2018, 2019 and 2020.
“We estimate earnings before interest and
tax (EBIT) of N0.56 billion, N2.16 billion, N2.58 billion, N2.83
billion, and N3.28 billion, and earnings before interest, tax
depreciation and amortization (EBITDA) of N1.92 billion, N3.72 billion,
N4.40 billion, N4.97 billion, and N5.80 billion, for the same
periods,” they said.
The analysts projected PBT and PAT of
N0.60 billion, N2.20 billion, N2.62 billion,N2.88 billion, N3.32
billion and N0.50 billion, N1.52 billion, N1.81 billion, N1.99 billion,
and N2.29 billion in 2016, 2017, 2018, 2019 and 2020 respectively.
By Goddy Egene/Thisday
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