Investors in Conoil Plc are assured of bumper returns on their investments this year, going by projections by capital market analysts and experts of substantial growth in the company 2013 full year revenue and profits as well as an increased dividend payment to shareholders following its impressive performance so far this year, reports Festus Akanbi
According to market analysts at leading stockbroking firm Dynamic Portfolio Limited, Conoil stocks, which have been the toast of investors in the recent weeks, would also end the year on high at N72 per share.
“A cursory look at the company’s profit margins [this year] reveals an increasing trend compared with the results at the corresponding quarter in 2012. Its profit before tax has gradually increased from N549.601 million in Q1 2013 to N3.084 billion in Q3 2013 while profit after tax has also improved from N366.905 million to N2.088 billion during the same period,” the analysts stated.
“This suggests that the company has clearly out-performed the previous year both in top-line and should exceed its bottom-line performance at the current run-rate,” they submitted.
According to the analysts, compared to its peers, Conoil Earnings Per Share (EPS) which measures the return on investments, is projected to rise to N4.00 for the full year 2013 based on the company’s previous quarterly performances, while Price Earning Ratio (P/E) is projected to improved considerably.
“Consequently, an estimated market price of at least N72 per share will be achievable by the end of the full year 2013, taking into cognizance the current performance of Conoil Plc and peer group comparison,” the analysts said, while advising potential investors to invest in the stocks now ahead of a bountiful harvest in the nearest future.
The company’s impressive performance was linked to its innovative means of manufacturing and distributing products, huge financial investments in developing high-performance products and in the provision of services that matched and surpassed international standards.
“Conoil has continually set new standards in fuel retailing with world-class facilities and groundbreaking marketing initiatives that endear it to customers and place it far ahead of competition. Conoil has grown an expansive distribution network throughout the country,” the analysts said.
The capital market has been reacting positively to the company’s laudable performance and strong financial position, with a surge in the demand for its stocks by investors resulting in 62% jump in its share price between June and October this year.
In the first week of this month alone, Conoil investors reaped a return of 15 per cent as the equity continued to appreciate in value. By the end of the week, its shares had closed at N51.48 on the floor of the Nigerian Stock Exchange (NSE), its biggest advance since September 2004.
Trading volume also nearly double the three-month daily average.
It would be recalled that the company had promised that, barring any unforeseen circumstances, it would sustain the impressive performance achieved in the first half of this year, in the latter part of the year and meet its set targets, including juicier returns for shareholders.
To achieve its objective, the company said it had strengthened and repositioned its core businesses, with huge investments in retail network expansion, which involved building new multi-million Naira mega stations spread across the country and located in high traffic areas in Onitsha (Anambra), Port Harcourt (Rivers), Makurdi (Benue), Jibia (Katsina), Jebba (Kwara) and Lagos, targeted at growing sales and revenue by over 65 percent.
The Chairman of Conoil Plc, Dr. Mike Adenuga, had during the company’s 43rd annual general meeting, also assured shareholders that the company remained committed to growing its business in order to maintain its leadership position in the downstream petroleum sector.