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BACKGROUND
Transnational Corporation of Nigeria of Nigeria Plc was incorporated on 16 November 2004 with the objective of creating a truly Nigeria Conglomerate with the ability to compete successfully on a ‘global scale.
Today, Transcorp is a publicly traded conglomerate with a diversified shareholders base of about 290,000 investors; the most prominent is Heirs Holding Limited, a pan- African propriety investment company.
The company’s portfolio comprises strategic investments in hospitality, agriculture and energy sector.
Transcorp has 38.72 billion shares outstanding, with shareholder funds standing at N86.67 billion at the end of December, 2013.
Financial Performance for the year ended December 31 2013
Transcorp Plc for the financial year ended 31 December 2013 grew gross revenue by 42.14 percent to N18.82 billion as against N13.25 billion it recorded in the corresponding period of Q4’ 2012.
In the period under review, the company through effective cost control was able to reduce cost to sales ratio to 23.64 percent this compares with 26.37 percent recorded in 2012FY.
The impressive results in earnings was as a result of remarkable reduction in input costs of the company as reflected in the cost to sales ratio aforementioned thus spiking gross profit margin to 76 percent in the period Q4 : 2013 from 73.5 percent Q4: 2012.
Expenses to sales ratio also reduced to 48.92 percent in the review period compared to 56.71 percent recorded in Dec’ 2012.
Profit before tax (PBT) for the year ended 31 December 2013 surged by 128.13 percent to N9.0 billion compare to N3.94 billion recorded in the corresponding period of December 2012.
Transcorp was able to achieve a satisfactory return on shareholders’ funds as net profit margin rose to 61 percent in Q4:2013 as against 36.3 percent recorded Q4:2012.
It means that the company is able to turn N61 of its sales into profit for the period, hence placing it in an advantageous position.
The resources of the owners (shareholders’) have been well managed by the management of Transcorp as return on equity (ROE) increased to 8.02 percent in 2013FY from 4 percent in 2012FY.
What this means is that the company was able to accrue N8 to the profit position for every N100 earned in 2013, up from N4 in 2012.
Return on assets (ROA) followed a similar pattern. ROA in the year under review increased to 4.60 percent from 2.53 percent in 2012.
This implies that of every N100 worth of assets deployed contributed N4 to after-tax profit for the year, higher than the N2.53k recorded in 2012.
The company recorded a sales turnover of 0.21x in 2013FY compared to 0.20x recorded in 2013FY. This means that Transcorp is producing 21k of sales for every one naira of capital employed in net asset.
The firm is in a position to meet its short term obligation unencumbered as liquidity ratio increased to 1.73 xs in 2013FY as against 1.48x recorded in 2012FY despite falling below the industry average of 2.1 xs.
Earnings per share EPS for the year ended December 2013 jumped to 12.17k from 3.19k recorded in the corresponding period of Q4′ 2012.
Share performance and outlook
The 290,000 shareholders of Transcorp have had their wealth maximized as the share price increased by 135.44 percent in the past one year to close at N3.48k on March 4, 2014 on the floor of the Nigeria Stock Exchange.
The company had a market capitalization N139.78 billion on the same day.
In order to improve efficiency in operation and boot productivity, the company, in 2013, acquired Ugheli Power plant paying N51.30 billion($300 million) .
Transcorp’s Board of Directors gave the approval for the payment of a dividend of 5k per share. If approved, payment will be made on April, 2014, the company said in a statement released February 28, 2014 on the website of the Nigeria Stock Exchange.
BALA AUGIE
