Bargain hunters drive Flour Mills’ shares to highest price in 2 years — after impressive half-year result

Shares of Flour Mills of Nigeria, Nigeria’s biggest miller by market share, traded at a two-year high at N26.50 today on the floor of the Nigerian Stock Exchange, as bargain hunters jostle to take position following the release of its impressive 2020/21 half-year result.

The last time it traded such a high was on August 3, 2018, when it traded at N27.00. The shares also gained 9.09 percent — the highest gain in 11 months.

A bargain-hunter is an investor who buys low-priced stocks with the belief that the stock is undervalued and will soon rise, or that it will provide a steady return.

In its unaudited half-year result for the period ended September 30, revenue increased 31 percent from N270.8 billion in H1 2019 to N355.1 billion in 2020.

Selling and distribution expenses remain flat, administrative expenses, however, ballooned 23.78 percent at N13.01 billion from N10.51 billion.

The makers of Golden Penny saw its profit before tax (PBT) surged 69 percent from N8.6 billion in 2019 to N14.6 billion in 2020. This was largely driven by the agro-allied segment which printed a profit of N6.3 billion as against a loss the previous year.  The company’s profit after tax (PAT) increased 68 percent at N9.9 billion from N5.9 billion.

Commenting on the result, Paul Gbadebo, group managing director/ chief executive officer said “with this result, our business has once again shown resilience, by following the path of sustainable growth despite the prevailing challenges both in the local and global economy.”