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Presco Nigeria Advances to Record on Dividend Bets: Lagos Mover

Jan. 28 (Bloomberg) -- Presco Plc, a Nigerian palm-oil producer, jumped to its highest level on record because of prospects that it will maintain dividend payments and a plan to expand into rubber plantations lure investors.

The stock rose 3.3 percent to 44 naira by the close in Lagos, the commercial capital. More than 1.1 million shares were traded, equal to 4.6 times the three-month daily average.

An 18 percent decline in the price of palm oil traded in Malaysia since the start of 2013 helped pushed Presco’s profit down 11 percent in the nine months through September to 1.65 billion naira ($10 million), the company said Oct. 31. Still, the stock rallied 53 percent in the past 12 months to trade at 13 times forward earnings. Primera Africa Securities Ltd. rated it buy on Dec. 3, saying palm-oil shortages in Nigeria gave Presco a chance to become the market leader.

Investors expect the company to match last year’s dividend payment of 1 naira per share, even with a 5.7 percent decline in profit, Rasaki Salawu, an analyst at Lagos-based Meristem Securities Ltd., said in an e-mailed response to questions.

Presco “has a history of good dividend payments,” he said. “The company has plans to venture into rubber in 2014. Even though this will not affect the bottom-line soon, the drive will be greeted positively by investors.”

A spokesman for Presco wasn’t available to comment, according to a woman who answered the phone at the company’s office in Benin, Edo state and declined to give her name.

The stock has risen 14 percent this year, compared with a 0.3 percent decline in the Nigerian Stock Exchange All-Share Index.

To contact the reporter on this story: Emele Onu in Lagos at

To contact the editor responsible for this story: Vernon Wessels at

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