Strong Earnings Growth; Capacity Expansion Drives Re-Rating Case | PRESCO PLC – 2025FY EARNINGS
Key Takeaways• Strong Profit Growth: Presco's 2025FY Profit After Tax (PAT) jumped 77.5% YoY to NGN138.1bn, driven by 59.6% revenue growth (NGN331.2bn) and improved operational efficiency (EBIT margin at 64.7%).
• Fortified Balance Sheet: A NGN241.5bn rights issue significantly boosted cash to NGN279.7bn (from NGN31.4bn in 2024), providing a strong base for future investments.
• West African Dominance: Presco's full acquisition of GOPDC cements its position as West Africa's dominant integrated palm oil operator, extending its plantation-to-refinery value chain into Ghana.
• Increased Target Price: Our 12-month target price is now NGN3,032.13 (up from NGN1,862.40), implying a 31.0% upside from the current NGN2,315.40, reflecting strong earnings, wider margins, and a more resilient balance sheet.
ARM Securities Limited is a full-service brokerage house that offers best-in-class brokerage services to local as well as foreign private and institutional investors. Formerly known as Hamilton Hammer, the Company commenced operation in 1994 and was acquired by ARM Investment Managers in 2008--an acquisition which has successfully re-positioned the company as a recognized brokerage firm in Nigeria. The Company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities research team provides insightful commentaries on the Nigerian economy and its equity and debt markets using an approach which incorporates a thorough understanding of the fundamentals of the industries and companies under coverage. The research therefore adopts an integrated methodology of top-down analysis and bottom-up stock selection, which focuses on publicly quoted companies on the Nigerian Stock Exchange that are judged to offer the highest potential for earnings growth. In addition, its analysts provide periodic commentaries on a range of topical global and local issues which provide investing clients with a holistic view of the opportunities and risks in today’s financial market landscape.
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