Friday, March 22, 2019 06:15 PM / NSE
Downward adjustment to consensus estimates expected following weaker-than-expected results. Compared with our estimates, while sales were slightly below our N40.8bn forecast, PBT missed by 44%. The variance was driven by negative surprises on the opex and other income lines. FY PBT of N13.7bn came in well behind consensus estimate of N16.5bn. Management proposed a final dividend of N8.25, slightly behind consensus forecast of N9.35.
Besides Q4 2018 sales growth of 7% y/y to N39.6bn there were no other positives.
The P&L trend below the sales line was negative on a y/y basis. A gross margin contraction of -314bps y/y to 9.6%, opex growth of -31% y/y and other income decline of -24% y/y completely offset topline growth. On a sequential basis, the trend was broadly similar.
Year-to-date, 11’s shares have shed around -10% vs. the broad market’s -1.2% decline.
We rate the stock Neutral. Our estimates are under review.
11 PLC Q4 2018 results vs. FBNQuest Capital Research estimates (N millions)
Source: NSE, FBNQuest Capital Research estimates
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