Earnings ReportFeatured

Flour Mills Achieved Our Buy Rating, Announced N2.15 Final Cash Dividend


Rating: Buy

Current Market Price at Earnings Release: N35.35

Year to Date High: N41.45

Year to Date Low: N28.10

Intrinsic Value: N75.01

Latest Cash Div: N2.15

By: Jeariogbe Tunde Segun (Equity Analyst)

Key Financial Tickers:

  • This report observed the full year financial of Flour Mills Nigerian Plc, for the year ended 31st March, 2022. Meanwhile, other full year indices were utilized along in arriving at the intrinsic value for each unit of its shares.
  • Kindly See below for our estimated ratios and comparisons
Bourse Nigerian Stock Exchange
Market Classification Main Board
Nature of Business Flour milling, Pasta Production, Importation, Blending, Distribution and Sale of Fertilizer, Manufacturing and Marketing of Laminated and Woven Polypropylene Sacks, Operation of Terminals A and B at Apapa Ports, etc
Date of Incorporation Sep-29-1960
Date Listed Jan-01-1970
End of Accounting Year 31st March
Website www.fmnplc.com
Registrar Atlas Registrars Ltd
Auditor KPMG Professional Services
Share Price@Relsd (N) 35.35
Earnings per Share  6.83
Intrinsic Value(N)  75.01
Share Outstanding 4,100,379,605
Market Capitalisation 144,948,419,037

Dividend Ratios

  • At the end of 2022 full year financial business session, the management of Flour Mills announced a final cash dividend of N2.15 as against the N1.65 paid at the end of 2021 financial year.
  • The said cash dividend is 31.47% of its full year earnings, and its 19.61% higher than what was paid to investors in 2021
  • Meanwhile, when the dividend was compared to the price of Flour Mills shares on the floor of the exchange as at the time the report was made available to the investing public, it is same a 6.08% yield, slightly above the 5.68% yield achieved in the corresponding year
  • Thus, Sustainable growth rate on the dividend now dropped to 9.80% from the previously estimated 10.85%
  • See the below table for details
Tickers 2022 2021 %Chg
Total Dividend                                  2.15                                    1.65 30.30
Payout Ratio 31.47% 26.31% 19.61
Dividend Yield 6.08% 5.68% 7.08
Sustainable Growth Rate 9.80% 10.8533% -9.70


Comprehensive Income

  • The Total Turnover reported by the management of Flour Mills for the year stood at N1.16 trillion, same as 50.83% below the N771.60 billion reported in the corresponding year
  • Cost of Sales is valued at N1.05 trillion as against N664.85 billion at the end of 2021 business session
  • Operating Profit on the other hand, is estimated at N65.51 billion versus N52.19 billion in the comparable year
  • Operating Expenses (less Depreciation and Amortisation) is estimated at N42.85 billion, compared to N41.12 billion in the similar year (2021)
  • Finance Cost used through the year was valued at N25.48billion versus N18.65 billion in the corresponding year.
  • Thus, Profit Before Tax stood at N39.21 billion as against N37.28 billion in the corresponding year
  • Tax Expenses is valued at N11.20 billion versus N11.56 billion in the corresponding year (2021)
  • In other words, Total Profit for the year stood at N28.01 billion, same as 8.94% above the N25.71 billion achieved at the end of 2021 business session
  • Please understand that, having considered all other transactions, the management achieved N27.98 billion as Total Comprehensive Income for the year, this is 14.32% higher than the N24.47 billion posted in 2021
Statement of Comprehensive Income
  2022 2021 %CHG
Turnover 1,163,802,851,000 771,607,880,000 50.83
Cost of Sales 1,055,712,728,000 664,850,870,000 58.79
Operating Profit 65,513,351,000 52,196,727,000 25.51
OPEX 42,856,095,000 41,125,355,000 4.21
DEPRECIATION 3,144,616,000 2,463,839,000 27.63
FINANCE COST 25,481,623,000 18,655,198,000 36.59
NET FINANCE INCOME 24,395,203,000 15,003,000,000 62.60
PBT 39,215,618,000 37,284,883,000 5.18
TAX 11,200,392,000 11,567,960,000 -3.18
PAT 28,015,226,000 25,716,923,000 8.94
TOTAL COMP INCOME 27,982,176,000 24,476,277,000 14.32
Statement of Financial Position
Current Assets                412,116,426,000            306,005,143,000 34.68
Non Current Assets                254,895,383,000            238,727,670,000 6.77
Total Assets                667,011,809,000            544,732,813,000 22.45
Current Liabilities                293,586,417,000            209,696,110,000 40.01
Non Current Liabilities                177,520,701,000            160,422,753,000 10.66
Total Liabilities                471,107,118,000            370,118,863,000 27.29
Net Assets                195,904,691,000            174,613,950,000 12.19
Retained Earnings                111,101,724,000               90,905,674,000 22.22
Shares Outstanding                     4,100,379,605                 4,100,379,605  

Financial Position

  • At the end of the 2022 financial year, Flour Mills Current Assets is valued to worth N412.11 billion as against the corresponding year value of N306.00 billion
  • Non-Current Assets is stated to worth N254.89billion as against N238.72 billion in the corresponding year
  • This implies that, the company’s Total Assets is N667.01 billion, higher than N544.73 billion in 2021 by 22.45%
  • Current Liabilities on the other hand was estimated at N293.58 billion versus N209.69 billion in the corresponding year
  • Non-Current Liabilities stood at N177.52 billion as against N160.42 billion in the comparable year
  • Thus, Total Liability estimate is N471.10 billion, versus N370.11 billion in the corresponding year
  • Netting both Assets and Liabilities, flour mills Net Assets was estimated at N195.90 billion, higher than the N174.61 billion in the corresponding year
  • Retained Earnings is N111.10 billion versus N90.90 billion in the corresponding year
  • Kindly see the above table for details

Liquidity/Risk Ratios

  • Flour Mills Debt Ratio stood is currently valued at 70.63%, slightly above the estimated N67.95% in the corresponding year. This simply means that Flour Mills Liabilities is 70.63% of the firm’s Asset Valuatiion
  • Total Debt used through the year is 240.48% of the Equity Value, this is 13.45% higher than the 211.96% estimate of 2021. Please understand that this means the Total Debt used through the year can replicate investors’ equity 2.40 times
  • We also estimated the Equity Ratio that compared Equity to Total Assets estimate at the end of the year. As shown in the below table, Net Assets is same as 29.37% of Flour Mills Assets Valuation
Financial Strength/Solvency Ratio
TICKERS 2022 2021 %CHG
Debt Ratio 70.63% 67.95% 3.95
Total Debt to Equity Ratio (MRQ) 240.48% 211.96% 13.45
Equity Ratio 29.37% 32.05% -8.37
TICKERS 2022 Industrial Average %CHG
Beta Value                                        0.40                                    0.89 -55.06

Profitability Ratios

  • As shown in the below table, Flour Mills EBITDA is estimated to be 5.63% of the Turnover figure. This is 16.78% below the 6.76% achieved at the end of 2021 financial year
  • Meanwhile, the Profit before Tax is 3.37% of the Turnover Value at the end of 2022 financial year, as against 4.83% in the corresponding year
  • Direct Cost of running the business, gulped 90.71% of the company’s reported Turnover Value, this is slightly higher than the 86.16% estimated from 2021 numbers. This confirmed that the company is capital intensive
  • Return on Equity is 14.30% against 14.73% in the comparable year. That is, the reported profit at the end of the year is 14.30% of the Equity Value
  • See below for other details
TICKERS 2022 2021 %CHG
EBITDA MARGIN 5.63% 6.76% -16.78
PRE-TAX MARGIN 3.37% 4.83% -30.27
EFFECTIVE TAX RATE 39.98% 44.98% -11.12
CS TO TO 90.71% 86.16% 5.28
ROE 14.30% 14.73% -2.90
ROA 4.20% 4.72% -11.03

Efficiency Ratios

  • Four Mills Operating Expenses (less Depreciation and Amortisation) is up to 3.68% of the Turnover Value, this is a drop in efficiency when compared to 5.33% achieved in the corresponding year
  • Meanwhile Turnover Value is 174.48% of Flour Mills Total Assets Valuation, an improvement in efficiency when compared to 141.65% in the corresponding year. This implies efficient use of the company’s assets all through the year
  2022 2021 %Chg
OPEX TO TO 3.68% 5.33% -30.91
TO TO TA 174.48% 141.65% 23.18
Working Capital Turnover                                        9.82                                    8.01 22.55
Working Capital Ratio                                        1.40                                    1.46 -3.81

Investment Ratios

  • Judging by the closing price of Flour Mills when the two compared financials were released to the investing public, investors’ valuation of its share price improved by 21.69%, having moved from N29.05 to N35.35
  • The amount earned on each units of Flour Mills shares at the end of the year is valued at N6.83, slightly above the N6.27 earned at the end of 2021 financials
  • Total Comprehensive Income at the end of the year stood at N6.82 against N5.97 in the comprehensive year
  • Please understand that the price of Flour Mills at when the price was made available to the investing public can replicate the earnings 5.17 times, higher than the 4.63 times replicate in the corresponding year. That is; P/E-Ratio is 5.17x against 4.63x
  • The yield of the earnings on the market price is 19.33%, though this is lower than the 21.59% achieved in the similar year, it is impressive, and above inflation
  • Another outstanding fact about Flour Mills is the fact that, in its book, each units of its shares is valued at N47.78, higher than the N42.58 in the previous year
  • Indicating an underpriced position for Flour Mills, the Price to Book Value is 0.74x and 0.68x in the two compared years. This is below unity
Investment/Valuation Ratios
Tickers 2022 2021 %Chg
Price at Released 35.35 29.05 21.69
EPS 6.83 6.27 8.94
TCIP/SHARE 6.82 5.97 14.32
P/E-Ratio 5.17 4.63 11.70
Earnings Yield 19.33% 21.59% -10.48
BV/Share 47.78 42.58 12.19
PBV 0.74 0.68 8.46


  • Our valuation metrics was used to access past full year financials of Flour Mills, projections and comparison made along with current Risk Free Rate. We have placed each units of Flour Mills shares at an Intrinsic Value of 01, and since this is higher than both market price and book value, we have Rated Flour Mills a Buy

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