Julius Berger

Julius Berger Plc is a well known company under the Construction sector of the Nigerian Stock Exchange. They have been doing well for a long time and it is one of the few companies with price levels above the N100 mark, which will soon be a thing of the past though, for now.

They released their full year results for the period ended December 2007 recently on the floor. It was rather impressive. Turnover grew by 39% from N56.868 billion to N79.073 billion while profit before tax grew by 43% from N2.204 billion to N3.152 billion. Profit after tax was raised by 58% from N1.119 billion to N1.768 billion. The striking thing about the results is the fact that the profit margin is just about 2.23%. This means that the company has a huge cost of sales to deal with but they have been able to work on cost reduction as seen by the increase in operations margin.

They have declared a normal dividend of 125K per share and a special dividend of 375K per share and proposed a bonus of 3 for 1. The closure of register is going to be on August 7, 2008 and payment date is August 21, 2008. That is huge! This has lead to a serious demand on this stock but shareholders have held on tightly to it as less than 5000 units have been exchanging hands.

Based on this results their earning per share is 246K with 300 million units of shares in issue. But they are giving a total of 500K per share as dividends! That means they are going to dip their hands into their reserve to make their shareholders happy. Not bad. At the current price of N120.33 the price earning multiple comes to 24.01 times, which means that it is currently trading slightly above its fair value. But who cares about a high PE when their dividends ratio is about 5% and there is a bonus of 3 for 1? Other companies have an average dividend ratio of about 2.5%. Julius Berger is definitely a good buy if one can lay hands on it.