FrieslandCampina WAMCO Nigeria Plc Offers 21,014 Ordinary Shares at N350 per share


Tuesday, January 27, 2015 1.48PM /Capital Bancorp


FrieslandCampina WAMCO Nigeria Plc (WAMCO) is an affiliate of the Royal FrieslandCampina of the Netherlands. WAMCO was incorporated in 1973 and started local production of Peak Milk, its flagship brand, in 1975.

Prior to this period, Peak milk was already available in the Nigerian market through imports, which began in 1954.

The Company produces and sells evaporated milk, instant milk powder and other dairy products in three brands: Peak, Three Crowns and FrisoGold. The company also produces and sells Peak Choco, its chocolate drink brand, and in July 2013 launched Frisomum Gold, a maternal milk product.

Turnover increased from N62.17bn in 2008 to N120.26bn in 2013, representing a CAGR of 14.10% and increased by 8.22% between 2012 and 2013.

We arrived at a fair value of N422.93 using Discounted Cash Flow (DCF) and N399.48 using the Dividend Yield Model in valuing the Company. We used a risk free rate (Rf) of 12.14% based on the current rate of 20-year FGN Bond, risk premium of 11.76% and a beta of 0.8.

We therefore place a long-term BUY on WAMCO Shares.




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