Flour Mills of Nigeria Plc is seeking to raise from the investing public up to N40 billion under its N200 billion bond issuance programme. The bond offer comes in the form of Flour Mills of Nigeria’s Series 1 Fixed Rate Senior Unsecured Bond which is rated “A-“ by Agusto & Co, and “A” by Datapro.
The fund is needed to finance capital expenditure and other general corporate purposes.
“Flour Mills aims to continue to expand its current businesses, while seeking to develop new ones both organically and through targeted acquisitions and/or joint ventures by taking advantage of scale, manufacturing excellence, strong brands and dominant market share. The company employs, directly and indirectly, over 14,000 people to deliver superior value to customers and other stakeholders,” ARM Securities stated in the note sent to investors.
The offer has a tenor of three years with pricing ranging from 13.75 percent to 14.25 percent, according to the offer documents sighted by the Nigerian Observer.
In terms of units of sale, the minimum subscription is N10 million, and in multiples of N1 million thereafter. It will be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange Limited.
Flour Mills is the largest vertically integrated food company in Nigeria whose operations are categorized into food business, agro-allied, sugar value chain, and support services.
The food segment boasts of a range of flour products, pasta, noodles, and ball foods offered under its iconic flagship brand – Golden Penny.
“The sugar segment is involved in the full sugar value chain – cultivating and processing of sugarcane, refining of sugar, and sale of by-products – with 10,000 hectares of sugar plantation and one of the most advanced sugar refineries in the world,” according to the offer document.
Based on its audited financial statements for the period ended 31 March 2022, revenue rose by 51 percent to N1.2 trillion, up from N771.61 billion in 2021. Profit before tax was N41.12 billion in 2022, in contrast to N37.19 billion made in the previous year.
Profit from continuing operations after tax was N28.12 billion in 2022, amounting to an increase of 9 percent than the N25.72 billion realised in 2021.
Flour Mills of Nigeria paid N8.81 billion as dividend to shareholders in 2022, which was 30 percent higher than N6.77 billion paid as dividend in 2021.
On April 5, 2023, investors on the floor of the Nigerian Exchange Group (NGX) traded 267,319 shares of Flour Mills of Nigeria worth N7.88 million. Its share price closed at N29.50 per share, representing 3.87 percent year to date gain.
