Growth in operations, management improvement boosts NAHCO’s 2,048% capital gains —Analysts

A cumulative return of 2,048 percent over the 12-year period and average annual return of 170.64 percent of the shares of Nigerian Aviation Handling Company (NAHCO) Plc has been underpinned to continued growth in the operations and improvements in the management of the company.

Stock market analysis in 12 years for the period between August 20, 2013 and August 20, 2025 showed that an investment of N1 million in NAHCO in 2013 now has total share value of N21.5 million, representing cumulative return of 2,048 per cent over the 12-year period and average annual return of 170.64 per cent.

Analysts attributed NAHCO’s capital gain to the continuing growth in the operations and improvements in the management of the company.

Managing Director, GTI Capital Limited, Mr Kehinde Hassan, described the linkage between fundamentals and share pricing trend like the relationship between a building’s foundation and the strength and height of the building.

He noted that while the stock market may be influenced temporarily by emotions, speculations and immediate macroeconomic development, solid fundamentals remain the ultimate support base that ensures that a company retains value over the years.

“Fundamentals refer to the core financial health and performance of a company. These include earnings per share (EPS), revenue growth depicting sales trajectory over time, profit margins and return on equity (ROE) which reflects how well the company uses shareholders fund and dividend payouts indicating cash returned to shareholders. These metrics help investors estimate a company’s intrinsic value,” Hassan, a chartered accountant and multi-asset stockbroker said.

Managing Director, HighCap Securities, Mr. David Adonri said the performance of NAHCO underlined its strong fundamentals.

According to him, the capital market is information driven as all the information available about an issuer or a company as well as macroeconomic fundamentals and sociopolitical environment now and into the foreseeable future are priced into the value of securities.

“The combination of all forces above shape the fundamentals of a company and dictates the direction of price movement of the stock through the market mechanism of supply and demand.

“A stock like NAHCO has appreciated heavily over the years because of its strong fundamentals, high dividend yield and consistent dividends payout. Over time, there is correlation between a company’s fundamentals and growth in its market value,” Adonri, a senior investment banker said.

The total share value of N21.5 million within the period under review included two bonus issues undertaken by the company during the period, but excluded cash dividends paid by the company noted for consistent cash dividend payment.

With N1 million, total shareholdings stood at 158,730 shares at the beginning of the prototype portfolio and closed the period with about 209,524 shares.

NAHCO had declared bonus shares of one share for every 10 shares held in 2015 and followed this with a bonus of one share for every five shares held in 2022.

NAHCO, which was privatized in 2005 and currently has more than 72,000 shareholders, has emerged on the topmost chart of best-performing stock at the Nigerian stock market with more than six times return higher than average annual return at the market.

NAHCO recorded average annual capital gain of 170.64 per cent over a 12-year period, compared with 23.94 per cent recorded by the overall benchmark index for the stock market.

While the overall, double-digit, positive return by the market underlines the value-retention of quoted equities over the years, NAHCO’s excellent performance marks it out as inflation-hedging stock for long-term investments.

This implies that an average investor in NAHCO still has annual return of more than 100 per cent over the 12-year period, when even adjusted for inflation rate and cost of capital or interest rate.   

Trading analysis showed that on a straight line, NAHCO’s share price appreciated by 1,527 per cent over the 12-year period, representing average annual capital gain of 127.2 per cent.

When two bonus issues undertaken during the period were considered, total value of the shareholdings increased by 2,048 per cent, indicating average annual gain of 170.64 per cent.

The analysis showed that NAHCO’s share price rose from N6.30 on August 20, 2013 to N102.50 per share on August 20, 2025, a cumulative increase of 1,527 per cent or average annual growth of 127.2 per cent.   

On the other hand, the All Share Index (ASI)- the benchmark index that tracks all share prices at the Nigerian Exchange (NGX), rose from 36,558.50 points on August 20, 2013 to close August 20, 2025 at 141,566.31 points. This represented cumulative 12-year gain of 287.23 per cent or average annual gain of 23.94 per cent.

Market analysts said stocks like NAHCO underscored wealth-creating and distributing capacity of the stock market, building up significant gain for investors over a period of time.

They pointed out that the success of NAHCO pointed to the indirect wealth distribution of the government’s privatisation programme.

Underlying ratio analysis underlined the growth in the group’s core business operations and increasingly efficient cost management. Gross profit margin improved from 55 per cent in first half 2024 to 59.26 per cent in first half 2025. Operating profit margin increased from 32.06 per cent to 36.0 per cent. Pre-tax profit margin also improved from 29.7 per cent to 36.5 per cent. Return on total assets tripled from 7.09 per cent to 20.14 per cent. Return on equity also jumped to 51.09 per cent as against 16.59 per cent.

The half-year 2025 results placed NAHCO on stronger footing to surpass its 2024 full-year performance, which had been hailed as a record performance. The audited report and accounts of NAHCO for the year ended December 31, 2024 had shown that profit before tax doubled by 115.4 per cent to N18.70 billion in 2024 as against N8.68 billion in 2023. Total revenue rose by 88.5 per cent from N28.40 billion in 2023 to N53.54 billion in 2024. With increased top-line efficiency, gross profit increased by 120.53 per cent to N33.08 billion in 2024 as against N15 billion in 2023.Operating profit also jumped by 123.93 per cent from N8.86 billion to N19.84 billion, underscoring the fact that the group’s performance was driven mainly by core business operations.

Analysts said the performance outlook places NAHCO in a strong position to achieve its five-year growth target of N300 revenue.

A breakdown of the N300 billion revenue target indicated that the group expected to generate N120 billion from the main ground handling business over the five-year period, N40 billion from cargo handling, N36 billion from NAHCO Logistics Services while NAHCO Free Zone, NAHCO Commodities, NAHCO Travel & Hospitality and NAHCO Aviation Academy would contribute N15 billion, N80 billion, N7 billion and N2 billion respectively.

Chairman, Nigerian Aviation Handling Company (NAHCO) Plc, Dr Seinde Fadeni, addressing shareholders at their annual general meeting in May, 2025, said the group has the capacity to attain the N300 billion revenue target, noting that the group plans to further diversify its businesses as part of strategies to drive the group’s revenue above N300 billion within the next five years.

He said a five-year growth strategy being implemented by the company would enhance existing businesses and diversify into other emerging opportunities.

He said the board and management are completely focused on implementing the company’s five-year strategic blueprint, which would drive the next phase of the growth of the group.

He said the company has continued to strengthen its position as the market leader in aviation ground handling while diversifying into new opportunities.

According to him, the company is undergoing a transformative change that has seen improvement in operating strategy, equipment, staff welfare and management and significant investments in technical know-hows and new opportunities.

Fadeni said NAHCO has demonstrated remarkable resilience despite challenges in the operating environment, adding that the company has been positioned for even more rewarding future.

He outlined that the group would focus on four areas of sustained growth, equipment re-fleeting, digitization and environmental social governance (ESG) to ensure better performance in the period ahead.

He explained that the diversified nature of the group and the onboarding of new business ventures would ensure that the group sustain its growth trajectory.

“Since transiting from being the foremost ground handling service provider in the entire sub-region to being a diversified, total logistics group, we have been driven by the earnest desire to provide unmatched level of excellent service delivery to our clients. This commitment has become more urgent as we seek to satisfy new demands for excellence and to improve shareholder value,” Olumekun said.

Market pundits expect NAHCO’s share price to remain bullish overtime as the group continues to expand its operations.

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