KEY POINTS

• Flour Mills shares hit a seven-day high after a buyback deal.
• Shareholders approved a buyback at ₦86 per share, above initial offers.
• The company recorded a 60 percent revenue growth in its half-year results.

The shares of Flour Mills of Nigeria Plc reached a seven-day high last Friday following the approval of a significant share buyback plan. This development, endorsed during a court-ordered meeting, has renewed investor interest and confidence.

Buyback deal drives share surge

Flour Mills shares closed the week at ₦78.65 per unit, marking a 10 percent rise from the previous trading day.

Over seven trading sessions, the stock climbed steadily from ₦64, showing strong investor response to the buyback news. The company’s market capitalization now stands at ₦322.49 billion.

The approved buyback deal allows the majority shareholder, Excelsior Shipping Company Limited, to acquire the remaining shares held by minority shareholders at ₦86 per share.

This figure surpasses the previously proposed ₦70 per share, representing a significant premium of 56.3 percent on the last traded price and 63.6 percent on the 90-day volume-weighted average price.

Following this transaction, the shares will be delisted from the Nigerian Exchange Limited, consolidating Excelsior’s ownership.

Strong financial performance bolsters optimism

Flour Mills reported a robust half-year financial performance, with revenue growing by 60 percent year-on-year and gross profit rising by 67 percent.

The company returned to profitability, recording ₦14.42 billion compared to a loss of ₦8.52 billion in 2023.

Management attributed this turnaround to improved sales and marketing strategies and an optimistic outlook on stabilizing foreign exchange policies by the government.

According to Punch, the leadership expressed confidence in continued operational improvements, citing efforts to control costs while expanding market presence.

The buyback aligns with these strategic goals, signaling a commitment to enhancing shareholder value.

Long-term growth prospects remain strong

With the majority stake in Flour Mills now consolidated under Excelsior Shipping Company and its Nigerian subsidiary, Greywise Investment Solutions, the company is poised for strategic expansion. Plans for delisting aim to streamline operations and focus on long-term growth.

The buyback has not only boosted share prices but also reinforced investor trust in the company’s strategic direction.

With ongoing government policy reforms and the company’s commitment to sustainable growth, Flour Mills is positioned to remain a significant player in Nigeria’s industrial sector.