Stock & Analyst Updates | |
Stock & Analyst Updates | |
4872 VIEWS | |
![]() |
Tuesday, April 30, 2019 07:05PM / Abdulazeez
Kuranga, Proshare Research
The
question why Austin Laz should be listed is far from rhetorical, with the
company’s share price barely moving over the one year analysts are increasingly
questioning whether the company can rightly be considered an investment store
of value. With no capital appreciation investors in the company for now must be
trading on hope rather than fundamental operating prospects.
Company Background
Austin Laz and Company Plc's (AUSTINLAZ) principal activities include the manufacturing of ice making machines, thermoplastics, aluminium and the production of building materials. According to its 2018 financial report, 1,079,860 shares of the company are currently held by 370 Nigerians
Listing Information
On
the 29th February, 2012, AUSTINLAZ became the first
company to be listed on the Nigerian Stock Exchange (NSE) by way of
introduction in 2012 and its 1,079,860,000 ordinary shares of 50kobo each at
N2.00 is classified under the industrial goods sector. Its market
capitalization stands at 2,256,907,400.00 and it is listed on the Main Board of
the NSE.
Listing
Price |
Listing
Date |
Sector |
Sub-Sector |
Share
Outstanding |
Mkt
CAP |
2.00 |
29-Feb-12 |
Industrial
Goods |
Electronic
and Electrical Products |
1,079,860,000 |
2,256,907,400.00
(as at 30-Apr-19) |
Source: NSE, Proshare Markets
Share Price Movement
AUSTINLAZ last traded on the NSE
on 15th April, 2019 with a share price of N2.09. This denotes a 4.5% increase
from the company’s listing share price of N2.00. Data from the NSE shows that
the share price of AUSTINLAZ did not change in the
last 7 days trades. The price was constant at N2.09 from 20th February, 2019 to
15th April, 2019.
Visit Austin Laz and Company Plc IR Page in Proshare MARKETS
Graph – Year to Date Share Price Movement
Financials
The earning profile of AUSTINLAZ at the end of 2018FY reveals a downward slide
in turnover growth rate from 43.83% in 2017 to 25.68% in 2018. However, the
performance of the company’s turnover growth is commendable when compared with
the thrust of -16.71% recorded in 2016.
Year |
Revenue N'm |
% chg in Revenue |
PAT N'm |
% chg in PAT |
2012 |
686.911 |
0 |
60.093 |
0 |
2013 |
667.332 |
-2.85% |
7.563 |
-87.41% |
2014 |
615.73 |
-7.73% |
-158.942 |
-2201.57% |
2015 |
261.055 |
-57.60% |
-59.092 |
-62.82% |
2016 |
217.428 |
-16.71% |
-146.126 |
147.29% |
2017 |
312.73 |
43.83% |
0.315 |
-100.22% |
2018 |
393.038 |
25.68% |
-16.23 |
-5252.38% |
Source:
AUSTINLAZ Annual Reports and Accounts |
In
2012, when AUSTINLAZ was listed on the NSE,
it recorded a revenue of N686.911mln. However, this decreased marginally by 2.85% in 2013 and further decreased by 7.73% in 2014 to N615.73mln. In 2015, AUSTINLAZ recorded its biggest
revenue decline as revenue fell sharply by 57.60% in 2015 from N615.73mln it recorded in 2014 to N261.055mln. This occurred
as a result of not recording any sales in the company’s thermoplastic division
during the period as against a turnover of N136.99mln recorded in 2014. Also
attributed to this was a decline in revenue in the Aluminium division and the
ICE plant division compared to the divisions’ turnover in 2014.
In
terms of profitability, AUSTINLAZ has recorded a sharp in
Profit after Tax (PAT) right from its listing year (2012) to 2018 as the PAT of
the company fell from N60.09mln in 2012 to N16.23mln loss in 2018 and this
represents a 127% decline in PAT in 6 years.
As
at the end of 2018, AUSTINLAZ recorded 5252.38%
revenue decline from N0.315mln PAT recorded in 2017 to N16.23mln loss in 2018.
As noted, the profitability position of the company in the past 6 years
reflects excessive fluctuations in PAT as its profitability is negatively
skewed towards losses than on profits. This downward trend in
profit performance could be attributed to the rise in production expenses as
indicated by the sky-high cost of sales of N299.72mln in 2018 (against
N193.66mln in 2017) and finance cost of N23.31mln in 2018 (against N19.36mln in
2017).
Peer Review – Share Price, Financials
AUSTINLAZ
Share Performance compared with Peers
The
7 years peer analysis below indicates that although the share price of AUSTINLAZ did not increase
significantly over the years, it is still among the top 6 in terms of share
performance when compared with its peers in the industrial goods sector as it
has a positive 7-years returns of 4.50%.
This therefore reveals that half of the companies
which include BETAGLAS, CCNN, DANGCEM, BERGER, CUTIX and AUSTINLAZ had positive price
growth of 433.33%,
220.75%, 98.69%, 42.14%, 9.59% and 4.50%
respectively for the 7 years collectively while the other half recorded
negative price growth.
Also,
there exist a positive relationship between the share price of AUSTINLAZ and the ASI Returns.
This is seen from the table which shows that whenever the ASI return is
positive, the share price of AUSTINLAZ will be below it and
vice versa. It
can also be noted that for the 7 years collectively, AUSTINLAZ outperformed the market as indicated by the
company’s 7 years returns of 4.50% which surpassed the NSE-ASI 7-years loss of
-112.16%.
AUSTINLAZ Financials compared with Peers
At the end of 2018
financial year, balance-sheet and top-line indicators revealed that AUSTINLAZ has weak market shares when compared with the
performance of the companies in the industrial sector as shown by the 7yrs
financial summary analysis below.
Total Assets
The
table above reveals that a majority of the companies experienced growth of
their assets over the 7 years period as against the base year (2012). Further
analysis reveals that compared to its peers, AUSTINLAZ experienced a decline
(which represents the largest) in the company’s asset growth with a contraction
of 26% from N2.24bln in 2009 to N1.66bln as at 31st December, 2018.
Net Assets
In
terms of Net Assets growth, AUSTINLAZ only came above PREMPAINTS and VANLEER as it recorded a 19%
decline in its net assets growth. Furthermore, when compared with CCNN (which is the company’s
peer in the Electrical and Electronics sub-sector, AUSTINLAZ still lags behind as CCNN records an impressive
growth of 155% in Net Assets over the 7 years period of analysis.
Inventory Growth
AUSTINLAZ recorded a 9 years decline of 86% in the
company’s inventory growth. That is, the inventory of the company decline by
86% from the year of listing to the end of 2018 and this indicates a weak
market share when compared with CUTIX (its peer in the Electrical and Electronics
products sub-sector) which recorded an impressive growth of 293% in inventory
over the 7 years period of analysis.
Cash and Bank Balances
AUSTINLAZ maintains the lead in the growth of cash and
bank balances among its peers in the industrial sector as it records an
impressive cash and bank balance growth of 4229%. Followed behind are FIRSTALUM, BETAGLAS and CUTIX with cash and bank balance growth of 1006%,
726% and 453% respectively.
Top-line and Bottom-line
Also, the top-line
performance revealed AUSTINLAZ 7yr revenue growth rate to be a decline of 43%
placing it behind all the companies in the industrial sector.
Further analysis
revealed AUSTINLAZ7yr average Profit After Tax (PAT) growth rate
to be a decline of 127% placing it behind CUTIX, MEYER, CUTIX, DANGCEM, BETAGLAS, and BERGER PAT growth
of 457%, 504%, 379%, 157%, 280%, 67 % respectively and ahead of VANLEER, PREMPAINTS and WAPCO PAT decline
of 774%, 172% and 171% respectively.
NB:
Of all the companies analysed, only FIRSTALUM and WAPCO are yet to release
their 2018 audited financial statements as at the date of writing this article.
Therefore, the Q3 2018 results of the companies (FIRSTALUM and WAPCO) were used in place of
their 2018 year end results. Furthermore, according to the financials from the
NSE, MEYER result starts from 2016
to 2018. Therefore, MEYER financials was compared
using 2015 financials in comparison with 2018. All the other company’s
financials were compared using their financials from 2012 to 2018.
Conclusion
From
the analysis, it has been established that although the share price of AUSTINLAZ has increased by 4.5%
since the day it was listed on the NSE, this price has failed to experience a
change in the last 1 year as it is seen hovering around N2.09 for the past year
till date. Further analysis showed that in comparison with CUTIX, which is its peer in
the Electrical and Electronics Sub-sector, AUSTINLAZ has not fared very well
as it lags behind in its financials. For instance, while CUTIX has recorded over 200%
growth in total asset, AUSTINLAZ is able to record a
decline of 26% in asset growth. With the exception of cash and bank balances
which AUSTINLAZ recorded an impressive
increase, it recorded decline in all other financial metrics used in the peer
comparison.
Related News
1. AUSTINLAZ Declares N8.305m PAT in Q1 2019 Results,(SP:N2.09k)
2. AUSTINLAZ declares N16.230 mln loss in 2018 Audited Result,(SP:N2.09k)
3. NSE Lifts Suspension Placed on ACADEMY, AUSTINLAZ and 2 Others
4. AUSTINLAZ Declares N25.37m Loss in Q3 Results,(SP:N2.09k)
5. AUSTINLAZ Releases Q1 Result and Announces Victory in Court Case Over BOI
6. AUSTINLAZ Releases Q1 Result and Announces Victory in Court Case Over BOI
7. AUSTINLAZ Declares N0.074m PAT in Q1 2018 Results,(SP:N2.09k)
8. AUSTINLAZ Declares N0.315m PAT in 2017 Audited Results,(SP:N2.09k)
9. AUSTINLAZ Releases Q1, Q2, Q3''17 Results, Records 69.04% Revenue growth in Q3''17 Result,(SP:N2.09k
10. AUSTINLAZ Records 16.71% Revenue Decline in 2016 Audited Result,(SP:N2.09k)