April 3 (Lagos) - Last week, 11 PLC (
MOBIL ) published Q4 2017 results which showed that sales were up 66% y/y to N 37.0bn while PBT grew by 22% y/y to N 4.3 billion. A -364bp y/y gross margin contraction and a -17% y/y decline in other operating income were not enough to offset benefits coming through from the strong top-line growth.
Company's sales held up surprisingly, unlike in prior quarters when petroleum product shortages occurred. 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 Q2 and Q3.
Perhaps, this suggests that there are likely no more significant acquisition-related costs. PAT came in flattish y/y. Sequentially, while sales were up 16% q/q, PBT and PAT both grew by 37-38% q/q. In addition to topline growth, a 20% q/q growth in the other operating income line provided support for the improved q/q trend.
The Q4 PBT beat analyst expectations of N2.9bn estimate by 49%. The variance was driven by positive surprises on the sales and other operating income lines. 11’s full year PBT of N13.4bn also beat consensus PBT estimate of N10.9bn.
Hence, analysts at FBN Quest in Ikoyi expect upward revisions to consensus 2018 estimates and a positive reaction by the market to these numbers. 11 (
MOBIL ) proposed a dividend of N8.00 (ahead of our forecast of N5.5); this works out to a dividend yield of 4.3%. 11 shares have shed -4.5% ytd compared with the ASI’s +8.5% gain.
Analysts at FBN Quest in Ikoyi rate the stock Neutral. Their estimates are under review.
reporting for easykobo.com on Tuesday, April 3 2018 from Lagos, Nigeria
Source - analysts at FBN Quest in Ikoyi. All opinions, views, targets and forecast expressed in above article are those of analysts at FBN Quest in Ikoyi. Easykobo does not endorse or oppose any views expressed in this article.