Economy
Red Star Express Seeks Funds for New Warehouses, Trucks, Others
By Adedapo Adesanya
Top courier and logistic service provider, Red Star Express Plc, has revealed that it intends to use proceeds from the sale of 336,855,291 units of the company’s shares through rights issue for expansion of its operations.
Addressing the investing public, including Business Post on Thursday at the Nigerian Stock Exchange (NSE), Red Star Express said the four major things funds from the exercise would be used for include provision of trucks; development of warehouse facilities at Lagos-Ibadan Expressway and the Murtala Muhammed International Airport in Lagos; deployment of more improved technology; working capital of the company.
The Group Managing Director of Red Star Express Plc, Mr Sola Obabori, while speaking yesterday at the company’s Facts Behind the Figures at the stock exchange, noted that the company has seen a lot of growth in the past five years, adding that measures have been put in place to ensure further development so as to create more value to shareholders.
He said, with the expected net issue proceeds of N1.3 billion from the rights issue, the company will within 18 months develop its warehouse facilities to create a better storage of its customers’ cargos and goods, purchase more trucks to improve logistics, and put in place ICT resources among others.
“We are going to develop warehouse facilities at Lagos-Ibadan Expressway and Murtala Muhammed International Airport Cargo terminal. Spaces are already jampacked and we need to expand.
“Approval has been given by the Federal Airport Authority of Nigeria (FAAN) and this will cover 54 percent of the total money and this is about N704 million and is expected to be completed in 18 months,” the GMD said.
Mr Obabori further said, “We are also developing a 9000 square kilometer space for warehouse development along Lagos-Ibadan Expressway.”
“We will be buying additional trucks to drive the logistics part of our business,” the GMD stated, noting that capital to be raise for this purpose would be N201.6 million (15 percent of the rights issue) and should be purchased under three months.
He stressed that 12 percent of the proceeds, amounting to N154.3 million, would be used for Information and Communication Technology solutions and Enterprise Resource Planning (ERP), which he said would support the firm for better decision-making methods. He said this should be within 18 months.
According to him, the remaining 19 percent (250 million of the proceeds) would then be deployed for the working capital of across board with immediate effect.
Speaking on the company’s financial performance, Mr Obabori noted that the company’s revenue has grown by 20 percent from N8.4 billion recorded in 2018 to over N10 billion in 2019.
“This occurred as a result of our consistent increase in revenue drive, through increase in customer base, innovation, and investments in assets,” he explained.
He added that the 5-year revenue overview would do well to attract investor confidence, noting that the group, “has constantly increased revenue for the 5-year period by 51 percent from N6.6 billion in 2015 to N10.0 billion in 2019.”
He further said that subsidiaries of the company, which include Red Star Logistics and Red Star Support Services Limited, have contributed between 42 percent and 48 percent in the last five years and expressed optimism that with the rights issues, the numbers will only increase.
Seeking to further boost investors’ confidence, Mr Obabori said, “The group has always maintained an upward trend in our dividend payment over the last 5 years, with the highest record of 43 Kobo in full year 2019.”
Mr Obabori added that, “When we are done with this rights issues, it will be N3.7 billion, assuming all provisionally allotted ordinary shares are fully taken up on completion of the right issues.”
The company’s market capitalization pre-issue stood at N2.36 billion. It was stated that shareholders who do not accept their allotment in full may have their shareholding in the company diluted.
Looking ahead, Red Star Express Plc has projected a revenue increase of N12.6 billion and N1.4 billion increase in Profit Before Tax and constant increases in the company that will see its revenue reach N18.9 billion in 2025.
Business Post reports that the company’s share price, as at the time of this report on Friday, was trading at N4.45 per share on the floor of the Nigerian stock exchange.
Red Star Express Plc provides a portfolio of logistics solutions which include, but not limited to International and Domestic delivery, Freight Forwarding, Information and Document Management, Mail Management, Warehousing, and E-Commerce Solutions.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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