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Nestle declares final dividend of N17.50

By on February 27, 2015

Nestle Nigeria Plc yesterday released its results for the year ended December, where the directors recommended a final dividend of  N17.50 per share.  Considering the interim dividend of N10 paid early, the shareholders are to receive a total dividend of N27.50 per share, compared with N25.50 paid the  previous year. Given the N824.01  share price at which Nestle closed on Wednesday, the  N27.50 dividend translates into a dividend yield of 3.3 per cent.

An analysis of the results showed that Nestle recorded a revenue of 143.3 billion, up by 7.7 per cent from N133.1 billion posted in 2013. Cost of sale rose by 7.6 per cent from N76.3 billion to N82.1 billion, while gross profit grew by almost same margin from N56.8 billion to N61.2 billion. Financial charges soared by 147 per cent from N2.1 billion to N5.3 billion.  This depressed the profit before tax by 6.7 per cent t N24.4 billion, from N26 billion in 2013.

However, a reduction in tax payment boosted  the profit after tax to  record a marginal decline of 0.1 per cent. Hence, the company ended the year with a PAT of N22.2 billion in 2014 compared to N22.3 billion in 2012 and recommended a final dividend of N17.50 per share.

Commenting on the results, analysts at FBN Capital said  they did  not expect  not expect the proposed dividend to impress the market; instead “we expect the market’s reaction to the results to be negative given the weak underlying performance. Nestle’s PBT of N24.4 billion missed consensus 2014 PBT forecast of N27.9 billion.. As such, we expect downward revisions to analysts’ 2015E estimates.

According to them, although Nestle’s topline growth of  eight  missed management double-digit target for the full year and Q4, “we expect this growth figure to be among the highest of the consumer names during this earnings season, in line with past trends. Year to date, Nestle shares have declined 13.8 per cent  compared with the Nigerian Stock Exchange All-Share Index  11 per cent. We rate the stock underperform.”

 

[ThisDay]