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Strategic Initiatives: Tantalizers Assures Shareholders Positive 2017 Performance

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Strategic Initiatives: Tantalizers Assures Shareholders Positive 2017 Performance

By Modupe Gbadeyanka

Shareholders of Tantalizers Plc, Nigeria’s foremost fast food company and the only quoted QSR Company on the Nigeria Stock Exchange (NSE), can be most certain that they will smile when the firm releases its full year 2017 performance.

This is because management of the company has expressed business optimism regarding the efficiency of its on-going strategic initiatives aimed at reversing the recent declining profitability in the business.

The initiatives, which commenced in the last two years, are designed to totally restructure the business, stem the declining performance and boost shareholders’ funds.

Investigations show that as a result of the positive results from some of the initiatives, the company’s total systems revenue (corporate and franchise) has grown in the last two years by a minimum of 6 percent per annum and is projected to grow further by an additional 10 percent to N4 billion in 2017.

According to sources close to the company, to address the capital structure imbalance which had threatened its business fortunes, the company, two years ago, engaged notable consulting groups to assist in bringing in equity investors and, though the process has been largely stalled with the economic recession in the country, there has been a renewed interest from both local and foreign potential investors which is expected to crystallize before the end of 2017.

 “The company is constantly looking at its cost structure particularly with the high cost of doing business in Nigeria. To this end, we have reduced outlet space where necessary in our renovated stores to make us more attractive, compact and efficient. We will continue to explore more avenues for cost reduction, while addressing other areas that we are sure will improve our competitiveness,” a recent media statement from the company stated.

“In the meantime, to manage the existing debt portfolio, the company has been in discussion with the local banks and IFC for debt restructuring.

“The discussions have been positive as the debts are already being re-structured. The overall effect of this will be seen in the results of the second half of the year,” it added.

While predicting a strong outlook for the second half of the year 2017, the company, in a recent presentation on the floor of the NSE, said its franchise model which was adopted three years ago is already yielding positive results.

“In the second half of 2017, we will open 5 additional stores in virgin territories thereby increasing our total foot print to 65 outlets.

“The planned opening of these outlets is an attestation to the strong equity of the Tantalizers brand and the consumers’ yearning for its location in their community.

“This will have significant impact on our market share and further consolidate our position as a market leader in the industry.”

The company further noted that “based on these ongoing initiatives and the support from all our stakeholders, we expect to commence the return to profitability position by the end of 2017 while we project dividend payment to commence as profitability improves within the next 24 months.”

“As we continue to grow total systems revenue, we will aggressively pursue over the next five years business expansion through new outlets, franchising and diversification. With this planned growth, we will return the company to a healthy profitable position and improve shareholders’ fund to over N3 billion in the next three years,” it further stated.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

Economy

Oil Prices Mixed Amid Weakening US Dollar

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Crude Oil Prices

By Adedapo Adesanya

Oil prices were mixed on Tuesday despite drawing support from a weakening US Dollar, with Brent futures contract down by 37 cents to $84.53 per barrel and the US West Texas Intermediate (WTI) crude up by 92 cents or 1.2 per cent to $78.82 a barrel.

The US Dollar index turned negative after data showed labour costs increased at their slowest pace in a year in the fourth quarter. This occurred as wage growth slowed, bolstering expectations of the US Federal Reserve slowing its interest rate increases.

Investors expect the Fed to raise rates by 25 basis points on Wednesday, with increases of half a percentage point by the Bank of England and European Central Bank the following day.

The rate increase expected at the Federal Open Market Committee’s January 31- February 1 meeting would bring the policy rate to the 4.5 per cent – 4.75 per cent range; that’s two quarter-point rate hikes short of the level most Fed policymakers in December thought would be sufficiently restrictive to bring inflation under control.

Economists at UBS expect the US Dollar to travel along a weaker path, with limited and short-lived bouts of strength.

“The Fed is getting closer to the end of its rate-hiking cycle. With markets growing comfortable with a terminal fed funds rate close to or at 5 per cent, and US inflation likely to quickly roll over in the first half of this year, downward pressure on the USD should continue to mount,” they said in a note.

The Organisation of the Petroleum Exporting Countries (OPEC) panel will likely recommend keeping the group’s output policy unchanged when it meets at 2 pm (Nigerian time) on Wednesday.

Meanwhile, a Reuters survey showed 49 economists and analysts expect Brent crude to average more than $90 a barrel this year, the first upward revision since October, with gains likely driven by demand from the world’s second top consumer, China.

China has been easing stringent COVID-19 restrictions this month, with the country reopening borders for the first time in three years.

Analysts noted that China’s reopening is supporting demand prospects for oil.

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Economy

Economy in Danger, Nigerians Suffering—Lagos Assembly

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Lagos Assembly economy in danger1

By Aduragbemi Omiyale

The Lagos State House of Assembly has accused the Central Bank of Nigeria (CBN) of compounding the woes of Nigerians through the Naira redesign policy, which it said has also put the economy in danger.

Speaking through its Speaker, Mr Mudashiru Obasa, the Lagos Assembly commended the National Assembly for putting pressure on the Governor of the CBN, Mr Godwin Emefiele, to ensure that Nigerians would still be able to take their old currency notes to the banks after the current deadline of February 10, 2023.

At the plenary on Tuesday, legislators in the state parliament noted that even though the policy was a good one, its timing was wrong as it had further thrown the country into economic chaos, which could become difficult to resolve if urgent steps are not taken.

Mr Obasa noted that the concern of the lawmakers had to do with the pains, anguish and anger spreading among Nigerians over their inability to access the new currency.

“Economists have said most times you cannot use new currency to control inflation, it doesn’t achieve the purpose most times,” Mr Obasa said, adding that the intention of the policy, as claimed by CBN, had been defeated owing to the various complaints from experts and people across the country.

The Speaker said the CBN should have engaged stakeholders while citizens should have been adequately carried along rather than an ‘overnight’ policy by the apex bank.

“There are people in the rural areas. It is obvious that the additional 10 days are not even going to be enough.

“The idea is a good one, but the way it is being implemented will have an adverse effect on the people.

“We need to commend the National Assembly for showing quality representation and prompt action to intervene for an extension of the deadline,” he noted.

The Speaker said that in other countries, old currencies are not discarded in a rush but allowed to fade out of the system gradually.

Mr Rotimi Olowo, the lawmaker representing Somolu Constituency 1, who moved the motion, sought an extension of the deadline till July 2023 in line with the resolution of the National Assembly while noting the suffering the policy had brought on Nigerians.

He complained about the unavailability of the new notes and the effect on the people, including small business owners and those in rural areas.

Contributing to the motion, the chairman of the House Committee on Public Account, Mr Saka Solaja, argued that financial policies are not implemented the way the CBN had gone about the Naira redesign.

“We see videos of people beating themselves mercilessly at ATMs, yet there is no money,” he lamented while supporting the call for an extension of the deadline by the CBN.

On his part, Mr Richard Kasunmu argued that the timing of the policy was not right, especially as the country was still grappling with challenges of effective internet connectivity.

He recalled how he spent five hours a day earlier trying to make an electronic transfer of N55,000 to resolve an emergency situation.

“We should be looking at the larger Nigerian people. If we want to survive the Nigerian economy, this should not be a good time for such policy,” he said.

On his part, Mr Victor Akande stressed that Mr Emefiele breached a part of the CBN Act concerning the policy, while his colleague, Mr Setonji David, noted that, “All over the world, CBN governors are economists, not bankers like Emefiele.

“Our people are suffering, and the money can’t be found at the ATMs. If you go to the ATMs, you would see how people are struggling,” he lamented.

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Economy

Emefiele Says Banks Will Accept Old Naira Notes After Deadline

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Emefiele appears before Reps

By Dipo Olowookere

The Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has confirmed that Nigerians who could not deposit their old Naira notes before the deadline would not lose their funds.

Speaking on Tuesday when he appeared before an ad-hoc committee of the House of Representatives chaired by Mr Alhassan Ado Doguwa, he said banks will continue to accept the old N200, N500, and N1,000 notes after February 10, 2023.

Nigerians were earlier given till Tuesday, January 31, 2023, to swap their old currency notes for the newly redesigned banknotes.

But after much pressure, the CBN obtained approval from President Muhammadu Buhari to shift the deadline forward by 10 days.

Last week, the Speaker of the House of Representatives, Mr Femi Gbajabiamila, threatened to sign a warrant of arrest on Mr Emefiele over his refusal to appear before the lower chamber of the parliament to explain the policy to lawmakers.

On Monday night, while speaking on a television programme monitored by Business Post, Mr Doguwa said the House would expect the CBN chief to appear today or risk being arrested by the police.

This morning, he was at the National Assembly to face the lawmakers, and during his speech, he said banks would continue to accept the old notes after the deadline in line with section 20, subsection 3 of the CBN Act, which says even after the old currency has lost its legal tender status, the bank is mandated to collect those monies.

“In agreement with the House of Representatives resolution and subject to section 20, subsection 3, which says even after the old currency has lost its legal tender status, that we are mandated to collect those monies. I stand with the House of Representatives on this.

“What does that mean? It means if you have monies you are unable to deposit to your bank after the expiration, we certainly will give you the opportunity to bring them back into the CBN, we redeem it and pay it into your bank account, or we exchange it. In that case, you do not lose your money.

“I want to appeal to you, this is not an easy exercise, but we are happy that in 19 years, we are able to carry out this important part of our mandate. We are grateful that we are doing it. We want the support of all Nigerians,” Mr Emefiele said.

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