About the firm

Livestock Feeds Plc was incorporated on 20th March,1963 and commenced business on 20th May, 1963. The Company was quoted on the Nigerian Stock Exchange in 1978. The Company is engaged principally in the manufacturing and marketing of animal feeds and concentrates.

Other products include veterinary drugs which are bought from other Companies for marketing and sales. Parent company UAC of Nigeria Plc which has a 73.29% stake in the firm amounting to 2.1 billion shares.

The numbers

The firm had topline and bottom line growth in Q3 2024. Revenue went up by more than 2X from ₦4.5 billion in 2023 to ₦13.1 billion in 2024. It isn’t clear how much of the revenue growth is from higher sales and how much of the growth is from revenue.

In its 9M 2024 earnings release, UAC of Nigeria gave some colour on the edible feeds segment (which includes grand cereals which is unlisted).

Revenue increased 87% YoY to N28.7 billion in Q3 2024 (Q3 2023: ₦15.3 billion) on account of price increases implemented in response to rising cost. This business segment recorded an operating profit of ₦3 billion in Q3 2024 (Q32023: operating loss of ₦51 million). Improved performance was on account of deliberate cost saving initiatives implemented to ensure production and operational efficiency.

The segment recorded a ₦1.9 billion profit before tax in Q3 2024, compared to a ₦605 million loss before tax in Q3 2023.Profit after tax rose sharply from ₦1.9 million in 2023 to ₦918 million in 2024Finance costs were up more than 3X from ₦326 million in 2023 to ₦1.3 billion in 2024. It comprised interest on loans and commercial paper.

Will there be a dividend?

Retained earnings are back in the green at ₦672 million as of 9M 24. Earnings per share stood at 47.19 kobo. It’s hard to predict if the firm will pay a dividend going by its gearing ratio of 1.11. This means it 1.11 Naira in current assets for every 1 Naira in liabilities.

Hard to ignore

Dividend or not, the stock is hard to ignore at its current valuation. It is trading at less than 5 times earnings. That’s way lower than the average PE of 16.7 times earnings on the NGX at the moment.