December 31, (THEWILL) – In a demonstration of sustained quality corporate leadership among the 155 listed companies, Transporp Hotels Plc emerged the best equity on the Nigerian Exchange (NGX), in terms of return-to-date performance for 2023.
According to data by the local bourse, Transcorp Hotels recorded outstanding performance that singled it out during the year as a strong equity to beat.
The hospitality industry leader closed its last trading day (Friday, December 29, 2023) at N70.18 per share on the Nigerian NGX, recording a 10 percent gain over its previous day’s closing price of N63.80.
Transcorp Hotels began the year with a share price of N6.25 and has since gained 1,023 percent on that price valuation, ranking it first on the NGX in terms of year-to-date performance.
The stock has accrued an outstanding 58 percent over the past four-week period alone, the seventh best on NGX, to sustain the high tempo it recorded during the weekly reports on the local bourse.
The NGX data showed that Transcorp Hotels is the 107th most traded stock over the past three months (Sep 29 – Dec 29, 2023) and has traded a total volume of 6.3 million shares — in 1,163 deals — valued at N304 million over the period, with an average of 99,977 traded shares per session. Further analysis revealed that the stock recorded a volume high of 754,237 achieved on December 13 and a low of 561 on December 4th, for the same period.
Transcorp Hotels Plc is currently the 15th most valuable stock on the NGX with a market capitalisation of N719 billion, which is about 1.76 per cent of the NGX equity market value. This also represents a 1,023.4 per cent increase against the N64.02 billion market capitalisation as of December 31, 2022, signaling the anticipated robust year-end performance.
The hospitality subsidiary of Transcorp Group recorded an impressive financial performance for the third quarter of 2023, showing a strong year-on-year growth on all indices with optimism for a handsome dividend next year .
The company recorded a 31.76 percent growth in revenue to N29.9 billion from N22.7 billion achieved in the previous year, and significantly higher than pre-covid performance.
The Q3 2023 profit also grew by 62 percent to N5.5 billion from N3.4 billion. The company said the results reflected its commitment to delivering exceptional value to its stakeholders and sustaining its growth momentum.
The Average Daily Rate (ADR) increased by 38 per to N134,739 from N99,390 during the same period in 2022, while Revenue per Available Room (REVPAR) grew to N106,244 by the end of September 2023 from N77,428 at the end of September 2022, a 34 rise.
“Transcorp Hotels plays a significant role in boosting the hospitality industry which reflects in the Service and Non-oil sectors growth as shown in the quarterly gross domestic (GDP) report published by the NBS. Their Calabar subsidiary is a cash cow, according to their 2022 annual report,” said Akin Adejumoh, a stockbroker.
Commenting on the results, Dupe Olusola, Managing Director/CEO of Transcorp Hotels Plc said, “This consistent financial upswing reinforces our dedication to excellence and resilience in the face of economic challenges. We have remained nimble, adapting quickly to meet the dynamic preferences of our guests”.
According to her, the company continued to experience strong performance in its International Business Travel segment, as it took advantage of renewed investor confidence in the Nigerian economy as a new government resumed office.
THEWILL recalls that Transcorp Hilton won the ‘Seven Stars Luxury Lifestyle Award’ five times in seven years.
The ‘Seven Stars Luxury Hospitality and Lifestyle Awards’ (SSLHLA) is the most exclusive award for the luxury hospitality and lifestyle industry. According to the organisers, SSLHLA is designed to identify and separate the exceptional from the absolute best.
Industry experts believe that Transcorp Hotels contributed to the bullish trend in the equity market that closed at a record N40.91 trillion on Friday, December 29, 2023.
The Nigerian equities market hit the peak of N40.91 trillion in capitalisation at the close of trading on December 29, 2023, the highest in its 63 years of existence. All Share Index also set a record of 74,773.77.
The performance resulted in a gain of N18 trillion year-to-date, when compared with the N22.91 trillion the market opened on January 4, 2023. The All Share Index gained 45.89 percent in 2023 compared to 19.98 percent in 2022.
The Market Capitalisation and All Share Index were the highest since the establishment of the Nigerian Exchange in 1960.
The Nigerian Exchange achieved the record high amid the nation’s highest inflationary trend (28.20 percent) and official exchange rate of N1,043.09 to a dollar as of December 28, 2023.
Nigeria’s benchmark exchange rate for the 2024 budget is N750 to a dollar.
Commenting on the N40 trillion market capitalisation benchmark first recorded on December 20, a member of the Institute of Stockbrokers of Nigeria, Mr Sola Oni, observed that the development is a landmark worthy of celebration, which he attributed to the active participation of domestic investors.
“The N40 trillion market capitalisation was historic. There is much to celebrate for this milestone. Indigenous investors are becoming more active in the market since foreign Portfolio Investors with hot money are largely adopting a wait-and-see attitude. This is due to factors, such as scarcity of forex and volatility of exchange rates. In this era of rising inflation, a safe haven for equity investors is value stocks”, Oni said in a note to THEWILL.
They have lower share prices and lower price-earning ratios. This category of stocks move along with inflation because of their intrinsic value. This is unlike growth stocks which exhibit superior performance during a low interest rate and low inflation regime. In an inflationary period, shares of small-cap, dividend growth, consumer staples, financial and energy sectors provide hedges.
As in recent years, local participation in the equity market drove activity this year, accounting for 88 per cent or 2.9 trillion of total trade as of November, according to the NGX Foreign Portfolio Investment Report. That compares with 2022 when local investors’ cash accounted for 83.3 per cent or N1.8 trillion of the entire trade.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
