Presco Plc is moving into a new phase of its corporate journey, with shareholders giving the palm oil producer a powerful mandate to raise as much as N250 billion in fresh capital through a Rights Issue.
The approval, secured at the company’s Annual General Meeting (AGM) on August 19, 2025, underscores both investor confidence in Presco’s growth trajectory and management’s ambition to strengthen its financial backbone for expansion.
The Rights Issue, according to the filing on the Nigerian Exchange (NGX), will see the company issue additional ordinary shares, the details of which will be determined by the Board. Importantly, any shares not taken up by existing shareholders could be made available to other investors, ensuring that Presco achieves full subscription. Alongside this, shareholders authorized the Board to adopt a flexible financing model that could combine both debt and equity, to be deployed in tranches as needed. This flexibility signals that Presco is preparing for capital-intensive expansion while hedging against market volatility.
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A Windfall for Investors
Dividend approvals took center stage at the AGM, as shareholders ratified payouts from both the 2023 and 2024 financial years. For 2023, investors received N26.30 per 50 kobo share, translating to N26.3 billion in total dividends. But it was the 2024 payout that truly stood out. The Board declared N42 per 50 kobo share, equivalent to N42 billion, a sharp 59.7% year-on-year increase in dividend yield, with a payout ratio of 53.99%. For many investors, this was evidence that Presco’s operational strength was being matched by tangible shareholder returns.
At the governance level, non-executive directors also secured a revised remuneration package. Their fees were raised to N349 million for 2025, up from N152.7 million in 2024, with a sitting allowance of N56.3 million. While such increases often draw debate, the move reflects the company’s robust earnings and its intent to align governance incentives with growth.
Robust Financial Performance
Presco’s half-year 2025 results provided the financial backbone for these decisions. The company reported a pre-tax profit of N111.8 billion, a dramatic 121.8% jump compared to the first half of 2024. The surge was powered by a second-quarter performance that saw pre-tax profit hit N53.2 billion, more than double the N20.7 billion earned in the same quarter last year.
Revenue growth was equally striking. Second-quarter sales leapt 130.8% year-on-year to N104.9 billion, driving total half-year revenue to N198.7 billion—almost double the N88 billion reported a year earlier. These gains came entirely from its palm oil operations, with Nigeria contributing N146.4 billion and Ghana N52.2 billion.
Even with a 30.4% increase in cost of sales to N17.8 billion, Presco’s strong top-line growth drove gross profit to N87.1 billion, up sharply from N31.7 billion in H1 2024. The company’s balance sheet reflected this momentum: total assets rose 29% to N612.9 billion, while retained earnings jumped to N220.6 billion from N126.7 billion at the close of 2024.
Why the Capital Raise Matters
The planned N250 billion Rights Issue is not just about boosting liquidity. It represents Presco’s strategy to consolidate its dominance in the palm oil sector, an industry increasingly seen as both a domestic food security priority and a lucrative export driver. Palm oil remains one of Nigeria’s most critical agricultural commodities, and with global demand climbing, Presco’s ability to expand production capacity could cement its role as a regional powerhouse.
Analysts say the move also reflects a broader trend among Nigerian agribusinesses that are leveraging strong earnings to pursue capital-intensive projects, particularly to ease access to foreign exchange and imported inputs. By shoring up its capital base now, Presco aims to expand both cultivation and refining operations without being overly reliant on external borrowing.
For investors, the combination of record profits, higher dividends, and a bold capital raise paints a picture of a company betting heavily on its future. Presco’s latest results suggest that the bet might just pay off.