Not Send. 

A Nigerian slang meaning to not care. Depending on your favourite genre of music, you might know the term from the Tuface song See Me So where he sings

As you see me so, i no send you o….

Hihphop heads may know the song by Tha Suspect (who’s a great musician by the way).

Anyways back to finance

UAC Nigeria is a company ive followed as an analyst in nearly a decade. You can term it a recovery story. Management has taken literally every hard decision that was expected of the business. 

• Sold a stake in the property segment.

• Merger of the two paint businesses: CAP and then  Portland paints.

• Repositioned its restaurant business (i think they should exit, but that’s a story for another day).

FY 2024 numbers

FY 2024 numbers were great, but it seems management doesnt “send” shareholders going by its dividend payout. 

Revenue grew by 63.4% from N120.5 billion in 2023 to N196.9 billion in 2024. 

Profit after tax increased by 83.1% from N8.9 billion in 2023 to N16.3 billion in 2024. 

Earnings per share went up by 58.2% from N3.14 in 2023 to N4.97 

They don’t “send” your pocket

The firm has proposed a final dividend of 22 kobo. That amounts to a payout ratio of 4.4% from its earnings. Cash wise, that’s N643.7 million

That got my head spinning. A shareholder with 1000 shares will get N220 after one year? 

Its even more baffling considering the quantum of cash UAC has in retained earnings. As at FY 2024, retained earnings amounted to N46.4 billion. 

UAC has 2,926,131,656 shares. Lets round it up to 3 billion. Is management saying they cant pay out N1 per share which would amount to N3 billion? That would leave it with over N40 billion. More than sufficient to run the business. 

If you are a trader, this stock would have made you money. 

In the last one year, the stock is up 145%. 

In the last 5 years, the stock is up 379%

If you look at the all time chart, the stock is trading far below its all time high of just above 64.

The average retail investor is not a trader (and rightly so). Only a small percentage of traders consistently make money. Its also an intensive line of work. So you are better off facing your hustle. 

My napkin note SOTP (Sum of The Parts) valuation has the stock at a value of somewhere between N70 to N100 per share. It is unlikely this stock will rebound to that level anytime soon. 

Shareholders may be better off holding shares of its paints subsidiary Chemical and Allied Products (CAP) which has a much better payout ratio. You can read more about CAP’s FY 2024 numbers here.