Nestle’s Profit, Dividend Buoy Investors Confidence @ NSE

Nestle Nigeria Plc, leading nutrition health and wellness Company has declared a profit after tax of N21.14billion for the financial year ended December 30, 2012 and the directors of the company are happy about it.

The figure for last year represented an increase of 28.1 per cent when compared to the N16.5billionn recorded in the same period of 2011.

Nestle’s revenue was also up 19.1 per cent to N116.7 billion against N97.9billion achieved in the corresponding period of 2011, while cost of sales increased by 16 per cent to N66.5 billion, from N57.4 billion recorded in 2011.

Taxation stood at N3.91 billion in the review period, from N1.70 billion recorded in 2011, while the basic earnings per share stood at N26. 67 in 2012, from N20.81 in 2011.

Analysis of the company’s balance sheet information showed net assets of N34.2 v in 2012, from N23.2 billion recorded in 2011, while total liabilities rose by 0.5 per cent, from N54.5 billion in 2011 to N54.8 billion in 2011.

Nestle shares have risen more than 30 percent since the interim dividend was paid 11 weeks ago, on low volumes, to become the most expensive stock on the bourse on a per share basis.

The company, which is majority is owned by Swiss food firm Nestle SA, paid an interim dividend of N1.50 naira per share in December, raising hopes of a healthy full-year payout.

It paid out around 90 per cent of its local profits as dividends, according to local stockbrokers who should know.

The proposed dividend was put at N18.50 translating into a 1.89 per cent dividend yield.

Mr. Martin Woolnough, managing director, Nestle Foods Nigeria, said ‘the Company has invested N100 billion in Nigeria between 2005 and 2012 in building ultra modern factory in Agbara, Ogun State’.

Sunny Nwosu, president Independent Shareholders Association of Nigeria  (ISAN ) commended Nestles board of directors on commissioning of the ultra modern factory in Agbara, which he said would assist the company in distribution of products across the cross the country

According to the Meristem Securities Limited, an investment firm, the company’s shares has risen more than 30 per cent since the interim dividend was paid 10 weeks ago, on low volumes, to become the most expensive stock on the bourse on a per share basis, with an impressive return on average equity of 73.7 per cent.

Nestles is one of the investors friendly Companies quoted on the NSE and over the years the company had generously rewarded its shareholders with consistent dividend payout.

Investors renewed confidence in the capital market is partly occasioned by unprecedented rise in the Nestle shares which are in hot demand from  both institutional and retail investors.