27 July 2018 ( Lagos ) : Upward adjustment to consensus estimates expected following better-than-expected results. Compared with analyst's estimates, while sales were in line with analyst's N40.4bn forecast, PBT beat by c.22%. The variance was driven by positive surprises on the opex and other income lines. On an annualised basis, H1 PBT of N8.1bn is tracking ahead of consensus estimates of N14.4bn.

On a positive note, Q2 sales and PBT of N40.8bn and N4.0bn up 32% y/y and 10% y/y, respectively. PAT grew more significantly (up 126% y/y) to N2.7bn due to base effects (11 Plc posted a loss of –N1.3bn on the other comprehensive income line in Q2 2017). The positive surprises on the opex and other income lines are also commendable. Rental income which is up +12% y/y to N2.0bn is similar to magnitude to Q1 figures, and perhaps could be more predictable going forward after several volatile quarters.

On a negative note, Sequentially, sales, PBT and PAT all declined q/q.

Analysts rate the stock Neutral.

Source : Uwadiae Osadiaye, CFA from FBNQuest Capital Limited.

Reporting for EasyKobo on Friday, 27 July 2018 in Lagos, Nigeria