Background Analysis of the Financial Performance of Flour Milss Nigeria Plc Group

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  • Date Submitted: 05/05/2011 07:05 AM
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Background Analysis of the Financial Performance of Flour Milss Nigeria Plc Group

BACKGROUND ANALYSIS OF THE FINANCIAL PERFORMANCE OF FLOUR MILLS NIGERIA PLC GROUP
Background
Flour Mills Nigeria Plc was established in 1960 as a manufacturing company in the foods and beverages sub-sector of the Nigerian economy.   Over the years, it has grown into a formidable brand as well as the leader in its industry. The remarkable achievements recorded by Flour Mills Plc may not be unconnected with the crops of seasoned management team that has served in the Company over time. As at the time of this report, its Board is constituted of a non-executive chairman, Mr. George S. Coumantaros (USA), thirteen other non-executive members and two executive members amongst which is the Managing Director, Dr. Chief Emmanuel A. Ukpabi.
Based on the aforementioned, Flour Mills Plc has evolved to be a blue chip company on the Nigerian Stock Exchange and has controlling investments in thirteen subsidiary companies including Golden Sugar Company Ltd, Kaboji Farm Ltd, Nigerian Bag Manufacturing Company Plc , Northern Nigerian Flour Mills Plc to mention` few . Considering our strategic investment goal, we are considering whether or not to acquire a major shareholding in the equity shares of the Company. In order to arrive at this crucial decision, we shall be interested in key performance indicators such as the profitability ratios, stock market ratios and the gearing ratios.

The Executive Summary
Nothwithstanding the limitations behind historical cost accounts on which these analysis are based, we have been able to arrive at some interesting conclusions as per the financial performance of Flour Mills Plc Group between the year 2009 across 2010.
1. Profitability-The analysis carried out revealed the major profitability measures of the Company are on the upside. These impressive results suggest why the Company is being able to continually pay dividends to its shareholders over the years and declare bonus shares.
2. Stock Market Attractiveness- We were able to deduce...
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