11 Plc Q2 2018 Results Reviews – PAT grew by 126% YoY to N2.7bn

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July 27, 2018/FBNQuest Capital 

­Event: 11 PLC (11) reports better-than-expected Q2 2018 results

Implications: Upward adjustment to consensus estimates expected following better-than-expected results. Compared with our estimates, while sales were in line with our N40.4bn forecast, PBT beat by c.22%. The variance was driven by positive surprises on the opex and other income lines. On an annualised basis, H1 PBT of N8.1bn is tracking ahead of consensus estimates of N14.4bn.

Positives: Q2 sales and PBT of N40.8bn and N4.0bn up 32% y/y and 10% y/y, respectively. PAT grew more significantly (up 126% y/y) to N2.7bn due to base effects (11 Plc posted a loss of –N1.3bn on the other comprehensive income line in Q2 2017). The positive surprises on the opex and other income lines are also commendable. Rental income which is up +12% y/y to N2.0bn is similar to magnitude to Q1 figures, and perhaps could be more predictable going forward after several volatile quarters.

Negatives: Sequentially, sales, PBT and PAT all declined q/q.

We rate the stock Neutral. Our estimates are under review.

11 PLC Q2 2018 results vs. FBNQuest Capital Research estimates (N millions)

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