11 PLC Reports Q1 2018 Results – Operating Expenses Up 25% YoY to N3.1bn

Proshare

Monday, April 30, 2018 /03:40PM / FBNQuest Research


Event
: 11 PLC (11)  Reports Q1 2018 Results  
Implications: Upward adjustment to consensus estimates expected
Positives: Q1 sales and PBT both up 79% y/y respectively; PAT of N2.8bn up 115% y/y
Negatives: Operating expenses up 25% y/y to N3.1bn 

Today, 11 PLC published Q1 2018 results which showed that sales were up 79% y/y to N45.1bn while PBT grew by a similar magnitude to N4.1bn. The sales growth combined with a 30% y/y rise in other income offset a 25% y/y rise in opex to lead to the PBT growth of 79% y/y. 11’s sales are the strongest on record despite petroleum product shortages in January. We believe the new ownership/management deserve most of the credit. Below the PBT line, there were no one-off expenses during the quarter, similar to the last three quarters. As such, the growth of 115% y/y on the PAT line was more significant.. Sequentially, while sales were up 22% q/q, PBT and PAT both declined by c.-6% q/q driven by a gross margin contraction of -125bps q/q and a 22% q/q rise in opex.

The Q1 PBT beat our N3.2bn estimate by 27%. The variance was primarily driven by positive surprises on the sales line. On an annualised basis, 11’s Q1 PBT of N4.1bn is currently tracking well ahead of consensus forecast of N11.7bn. As such, we expect upward revisions to consensus 2018E estimates. 11 shares have shed -10.4% ytd compared with the ASI’s +7.9% gain.

We rate the stock Neutral. Our estimates are under review. 

11 PLC Q1 2018 results vs. FBNQuest Capital Research estimates (N millions)
Proshare Nigeria Pvt. Ltd.
Source: NSE, F
BNQuest Capital Research estimates

 Proshare Nigeria Pvt. Ltd. 

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