Nestlé S.A, world’s largest food company, has continued its direct secondary-market purchase of shares of its Nigerian subsidiary, Nestle Nigeria Plc, offering a premium of 12.03 per cent to close its latest deal.
Trading documents yesterday showed that Nestle S.A has so far this month struck additional deals worth N444.67 million for the acquisition of additional shares in Nestle Nigeria, bringing total value of acquisition in four reported instances to more than N1.5 billion.
Insider-related document yesterday showed that Nestle S.A. at the weekend acquired 102,690 ordinary shares of 50 kobo each in Nestle Nigeria. It had earlier this month bought 214,924 ordinary shares of 50 kobo each. Both deals were struck at N1,400 per share, 12.03 per cent premium above its previous deal in September 2020 and 19.2 per cent above the transaction price for the first deal in August 2020.
Nestle S.A had in August 2020 started direct secondary market purchase of additional equities in Nestle Nigeria, acquiring 636,384 ordinary shares of 50 kobo each at N1,174.67 per share in the first transaction. The transaction had increased the Swiss multinational food and drink company’s majority shareholding in Nestle Nigeria by 0.08 per cent.
In September, Nestle S.A also acquired additional shares worth about N287 million. A total of 229,697 ordinary shares of 50 kobo each were purchased at a premium of N1,249.65 per share.
Market analysts said the premium pricing underscored the attractiveness of Nestle Nigeria to the majority core investor.
Nigeria is a key market for Nestle where the stock and the brands have sustained decades of market leadership. Nigeria and the rest of other Sub-Saharan Africa (SSA) recorded double-digit growth in the first half, driven by real internal growth.
Nestle’s half-year results for 2020 showed that SSA was the best-performing segment under the groups’ Asia, Oceania and sub-Saharan Africa (AOA) zone.
“We expect full-year organic sales growth between 2.0 per cent and 3.0 per cent. The underlying trading operating profit margin is expected to improve. Underlying earnings per share in constant currency and capital efficiency are expected to increase. This guidance is based on our current knowledge of COVID-19 developments and assumes no material deterioration versus present conditions,” Nestle SA stated in the group’s six-month report.
Key extracts of the interim report and accounts of Nestle Nigeria for the half year ended June 30, 2020 showed that turnover was steady at N141 billion in first half 2020 as against N141.9 billion in comparable period of 2019. Profit after tax stood at N21.8 billion in first half 2020.
Managing Director, Nestlé Nigeria Plc, Mauricio Alarcon, said the results illustrated the resilience of the company.
According to him, amidst the on-going COVID-19 pandemic, Nestlé Nigeria has delivered consistent results in terms of revenue while exchange rate variations and increase in the price of some key materials have affected profitability.
“While it is still early to assess the impact of this crisis, we are fully confident in our people’s agility and deep commitment to overcome challenges and continue to deliver value for our shareholders and for society. Going forward, we will remain focused on three key priorities which include safeguarding the health and wellbeing of our people, ensuring business continuity to meet consumer needs and supporting our communities,’’ Mauricio said.
