“Despite the lull currently being experienced in the secondary market, investors have sustained their interest in the on-going Initial Public Offering (IPO) of the National Sports Lottery Plc.
The company is currently offering for public subscription 800 million ordinary shares of 50 kobo each at N15.50 kobo per share between Monday July 14, 2008 and Wednesday august 20th, 2008.
Receiving agents revelations indicates that investors are leveraging on the company’s results just released which was a major improvement over the half year result of 2007.
Besides, investors are said to be diversifying their portfolios since they have leveraged on capital appreciation enjoyed on the banking and Insurance stocks post consolidation.
Smarting from an operational loss of N238 million in the six months ended June 30th, 2007, the company recorded an after tax profit of N2.6 billion in the same period ended June 30th, 2008, on a gross income which rose from N79 million in2007 to N3.5 billion in 2008.
Shareholders’ funds rose from N471 million in 2007 to N2.6 billion in 2008, while cash and cash equivalent rose from N679 million to N1.67 billion. Fixed assets also grew from N77million to N950 million. Unpaid interim dividends for 2008 stood at N580 million.
In a note to the result, NSL explained that diversification of its revenue base has resulted in a very strong and successful business strategy.
While reassuring investors on the second half of the year’s performance, the company said “barring all unforeseen circumstances, the company is in line to achieving its forecast for the year ended December 31st, 2008, considering the re-launch of the National Lottery, and its strong partnership with LAGTECH, a Lagos Lottery based outfit, and selling of airtime vouchers over the network of 20,000 terminals”
Comparing actuals with forecasts, it showed that the first six month’s profit before tax of N2.556 billion is 52 percent or half way time of the N4.95 billion forecast for the year end, while profit after tax of N2.556 billion is 68 percent of the N3.74 billion one year forecast.
The proceeds of the offer according to the prospectus would enable the company become a platform for the convergence of lottery and electronic transaction processing, which includes credit/debit card payments, electronic air time vending, bill payments and funds transfers.
The company at this moment boasts of over 20,000 merchants/agents acquired nationwide and has all GSM networks airtime on its terminals as well as starcomms. The airtime industry boasts of over N700 billion per year, while the lottery is over N70 billion annually. The estimated point of sales payment is about N1 trillion.
Indeed NSL Plc with its very high quality infrastructure with switching from valucard/visa, is positioned to continue to be a buy stock beyond the IPO. One of its wholly owned subsidiary, PAYTECH has recently been appointed by valucard as an independent visacard marketing company.
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