The Board of Directors of STACO has assured the insuring public that the company will continue to be a responsible and dependable corporate entity fully committed to protecting all stakeholders’ interests including meeting its obligations to all policy holders.

The Board has also assured all shareholders that their investments are safe and intact despite the recent change in the leadership of the Company. To this end, the Board has taken some bold steps in laying down a proper Corporate Governance procedure in line with global best practices.

The new management team led by Mr. Bayo Fakorede has equally assured that STACO will continue to remain a reputable brand noted for efficient customer service delivery and professional underwriting capacity.

According to him, the principal objective of the change process is to put the customer first and deliver exceptional customer service at all times and across all touch-points.

“STACO will continue to be a major player in the Nigerian insurance market by bringing to the table, a new customer experience and a robust IT infrastructure. In the insurance industry, we know that underwriting expertise and capacity are key. This is where STACO derives its strength as capacity building and manpower development will continue to receive maximum attention” he assured.

“We want to thank all stakeholders for their support to the Company and assure them that the Company will continue to deliver value added services to them. Let me assure all policy holders that we are committed to fulfilling all our obligations and will continue to be their dependable and reliable insurance company of choice. To our investors, they should be fully assured that their investments are safe and fully protected. They will continue to derive maximum value from their investments in our Company.”

Our commitment to proper and good Corporate Governance in line with global best practices is also be emphasized in our operations as we want to remain an ethical company” he added.

The Company has noted the new NAICOM initiative to strengthen the capacity of the Insurance sector in delivering the much needed impetus for the economic growth of the Nation. STACO’s Board is desirous of keying in to the project by shoring up its capital base to play as a Tier 1 company. Towards this objective, the Board has set in motion the talks with stakeholders to realize this dream.

The Board Chairman, Prince Samuel Turoti noted that the Company is solvent and in advance talk with investors and other stakeholders with a view of bringing new capital into the business.

Also worthy of note is management’s continuous emphasis on professionalism of her workforce and a commitment to recognize and reward all deserving employees at all times. The Chairman of Board of Directors, also emphasized that the “relevance of professional development in a work setting would remain priority as professionalism is one of the core values of STACO.”

Consequently, the Board and Management will continue to inspire and equip staff members to be professional in their areas of operation. ”Management will not relent in investing in training and development of staff” he added.

The Nigerian capital market will on Wednesday, August 8, 2018 witness the launch of the Association of Securities Exchange of Nigeria (ASEN) at The Nigerian Stock Exchange event centre in Lagos.

ASEN, Nigeria’s first association of domestic securities exchanges, is a non-profit industry association established to accelerate the development of domestic securities exchanges and support the Nigerian capital market to achieve greater global competitiveness.

Membership of the association currently includes AFEX Commodities Exchange (AFEX), FMDQ OTC Securities Exchange (FMDQ), NASD OTC Securities Exchange (NASD), Nigeria Commodity Exchange (NCX) and The Nigerian Stock Exchange (NSE).

Special guests slated to attend the Launch include the Chairman, House of Representatives Committee on Capital Markets and Institutions, Hon. Yusuf Tajudeen; Ag. Director-General of the Securities and Exchanges Commission (SEC), Mrs. Mary Uduk; Director-General, Debt Management Office (DMO), Mrs. Patience Oniha; Mr. Tony Elumelu, Chairman, Heirs Holding (investors in AFEX Commodities Exchange) and Mr. Abimbola Ogunbanjo, President, National Council of The Nigerian Stock Exchange.

Speaking on the development, Mr. Oscar N. Onyema, Chairman, ASEN Board of Trustees and Chief Executive Officer (CEO), NSE, noted that “we are excited to launch ASEN, an association that will help build a stronger capital market and cultivate a culture of mutual support and collaboration among stakeholders. Global securities exchanges are responding to developments in the operating environment and competitive landscape, by establishing mechanisms for cooperation that position not only their businesses but their markets to become more attractive to investors. Nigerian securities exchanges must therefore embrace a broader collaborative effort to unlock new opportunities and efficiencies in view of increasing global competition. The establishment of this Association is a bold step towards the actualization of that vision of becoming globally competitive trading venues”.

Mr. Bola Ajomale, Member, Board of Trustees, ASEN and CEO, NASD Plc. stated, “This event is the culmination of deliberate cooperation between the various exchanges in the Nigerian capital market.  Collaboration between exchanges in this manner will ensure some level of uniformity and consistency in governance whilst allowing each member to continue along its natural trajectory.  Ultimately key stakeholders in the Nigerian capital market – Regulators, issuers, investors and operators will be the real beneficiaries. We also believe the existence of such an association will significantly support market structure in Nigeria.”

Other distinguished members of the Board of Trustees, ASEN include: Mr. Ayodeji Balogun (representing AFEX), Ms. Zaheera Baba-Ari (representing NCX) and Mr. Bola Onadele Koko (representing FMDQ).

About the Association of Securities Exchanges of Nigeria (ASEN)

The Association of Securities Exchanges of Nigeria (ASEN) is Nigeria’s first association of domestic securities exchanges.

It was incorporated in 2017 as a non-profit industry association to support the advancement of the Nigerian capital market and the development of members via knowledge-sharing, collaboration, capacity-building and advocacy. ASEN currently has five (5) member exchanges, namely AFEX Commodities Exchange (AFEX), FMDQ OTC Securities Exchange (FMDQ), NASD OTC Securities Exchange (NASD), Nigeria Commodity Exchange (NCX) and The Nigerian Stock Exchange (NSE).

The current Chairman is Mr. Oscar N. Onyema, the Chief Executive Officer (CEO) of The Nigerian Stock Exchange. The Secretariat of the Association is at FMDQ OTC Securities Plc head office in Lagos, Nigeria.

According to Cordros Capital, NESTLE reported 56.9% y/y EPS growth in Q2-18, driven by strong revenue and margin growth, marginal increase in opex, and a net finance income (vs. loss the previous year). Compared to our estimate, the achieved Q2 EPS was ahead by 8%. Annualized, the H1-18 EPS of NGN27.07 is c.3% ahead of consensus estimate for 2018E.

In-line Q2-18 Revenue; 2018E Growth Estimate Unchanged: The reported Q2-18 revenue was ahead of Q2-17 by 11.6% and beat our estimate by a marginal 1%. At current run-rate, we believe NESTLE’s revenue growth (10.97% in H1-8) is in line with our 10% forecast for the year, hence we make no changes.  Compared to both Q2-17 and Q1-18, we estimate volume grew at low single-digit during the reference period, supported by both Ramadan-related consumption as well as the recent introduction of new SKUs – Maggi Naija Pot, Golden Morn Puff, and Milo-Ready-to-Drink – for which adverts and promotions have been aggressive thus far this year.

Food revenue grew 11% y/y while Beverages grew by 13% y/y in Q2. We are aware of rising competition in the FMCG space with new entrants, but should also note that NESTLE’s RTM is aggressive, hence we expect revenue will maintain the H1 trajectory in the remaining half of the year.

A Welcome Recovery of Margins: From the decline to 38.2% in Q1-18, NESTLE’s gross margin recovered strongly to 43.96% in the review period, exceeding both Q2-17’s 40.9% and our estimate of 41.6%.

We revise our gross margin estimate for 2018E slightly higher to 42.5%, and while noting downside risk relating to the rising price of cocoa (+20% YtD), elsewhere, we believe NESTLE’s margin will be supported more by the stable exchange rate, soft sugar (-26%YtD) and dairy prices (-8% YtD), continued sourcing of cheaper local inputs, and importantly, stable selling prices.

Our revised forecast brings gross margin closer to the average of 43% achieved between 2012-2014FY (average gross margin was 40% prior), but still below the peak of c.45% achieved in 2015FY.

EBITDA and EBIT grew 28% y/y and 30.7% y/y respectively in Q2-18, with respective 28.4% and 26% margins. Our revised estimates for 2018E produced EBITDA and EBIT growth of 17% and 18% over 2017FY, equating to record-high 27.1% and 24.5% margins respectively.

FX Gain Offsets Interest Expense: Net finance income of NGN300 million was recorded in Q2-18. FX gain of NGN590 million more than offset interest expense of NGN550 million, as the balance of borrowings reduced by a further NGN630 million to NGN17.5 billion (vs. NGN24.2 billion in 2017FY and NGN42.99 billion in H1-17). Following the result, and with the risk of FX fluctuation muted, we now model finance cost will be much lower at NGN2.6 billion in 2018E, from. NGN4.6 billion previously (vs. NGN15.1 billion in 2017FY).

High Effective Tax Rate: Recognised effective tax rate was 29.5% in Q2, averaging 32.7% over H1-18. We have consequently adjusted our tax rate assumption higher from 25% to 30%, hence the little impact of the upwardly revised gross margin and reduced finance costs estimates on 2018E EPS estimate.

Estimate and Valuation: The net impact of the changes to our model is an increase to our 2018E EPS estimate to NGN60.14 (from NGN58.30 previously) and TP to NGN942.23 (previously NGN851.48), while maintaining SELL rating.

NESTLE’s stock has lost 6% since we updated on Q1-18 result, with a SELL rating. On our estimates, the stock is trading at forward (2018E) P/E and EV/EBITDA multiples of 25x and 16.2x, a significant discount to its five-year historical averages of 45x and 21.1x respectively.

The Global Alliance for Improved Nutrition (GAIN)- an international organisation founded by the Bill and Melinda Gates Foundation and driven by the mission of a world without malnutrition- is hosting the first-ever Nutrition Africa Investor Forum (NAIF) in Nairobi, Kenya, on October 16-17, to invite and engage private sector investors to play a key role in improving nutrition across Africa.

The event is hosted in partnership with Royal DSM, a purpose-led global science-based company in nutrition, health and sustainable living recognized for its global fight against malnutrition, the SUN Business Network and African Business magazine.

The Nutrition Africa Investor Forum will highlight business opportunities in a largely underdeveloped market. From farm to fork, nutrient gaps in diets within low and middle-income markets constitute a largely untapped market worth USD$120bn.

According to a recent study, no African country is expected to reach the UN target of ending childhood malnutrition by 2030.  In fact, malnutrition indicators remain “persistently high” in 14 countries, stretching across from Sahel from Senegal in the west to Eritrea in the east.
This challenge needs to be addressed. GAIN argues engaging the private sector is key in addressing this issue. Nutrition-sensitive capital investments along the entire food value chain are critical to drive better availability, access, affordability — and finally — consumption of nutritious foods.
GAIN works with nearly 1,000 companies across the food value chain in Africa, but many of these cite access to capital as a challenge. At the Forum, experts will present a number of viable investment opportunities from these enterprises to venture capital funds, private equity groups, finance institutions, foundations and impact investors.

The forum will showcase current and future investment potential for nutritious foods in Africa. There will also be an opportunity for the private sector and investors to discuss key challenges and discuss opportunities for unlocking greater investment in nutrition market with the instruments and vehicles that are currently available and those under development.
Lawrence Haddad, GAIN’s Executive Director, says:

“One in three people in the world suffers from some form of malnutrition. Moreover, poor diet is the number one risk factor in the global burden of disease. We believe in the enormous potential of national food businesses in Africa to address this challenge by producing more affordable, nutritious foods. However, for this to happen, new private investments must be unlocked for SMEs along with new policy and lending instruments. We’re aiming to help bridge this gap.”
Fokko Wientjes, Vice President, Malnutrition Programs & Partnerships Royal DSM and member of the SUN Business Network Executive Committee, added:

‘Nutrition is the new asset class of a dynamic African food industry. Businesses, governments and investors don’t just have a moral case for investing in nutrition – they now have a business case too. Businesses in Africa adapt their approach as governments and consumers increasingly demand access to safe, affordable nutritious foods. Smart companies and investors will start building now the African food industry of the future, serving the African consumer of the future.’