The group evokes the weak liquidity of the title and the limited visibility within the quotation to announce its decision to leave the capital market. A public buyout offer covering all the equity securities of Nexans Maroc will be launched by its majority shareholder, Nexans Participations. The title has been suspended since March 24.
The Casablanca Stock Exchange will soon separate from one of its residents. Nexans Maroc decided, at its meeting held on April 1, to delist its equity securities from the Casablanca listing. The group cites as a reason the low liquidity of its title and the limited visibility within the quotation. Consequently, “a public buyout offer covering all the equity securities of Nexans Maroc will be launched by its majority shareholder Nexans Participations, in accordance with the provisions of Law No. 26-03 relating to public offers on the stock market, such as that modified and supplemented ”, explains the group. Nexans Maroc is thus ending 37 years of listing. “It must be said that the security had not been very liquid for almost two decades. The exchanges carried out on the value dwindled year after year, ”underlines an analyst of the place. 81,910 shares were thus exchanged in 2019 for an amount of MAD 10.7 million. In 2020, only 7,309 titles were able to change hands, cumulating an amount of 931,662 DH. To date, 7,511 shares have been traded since the start of the year, representing a volume of MAD 954,731. Note that with a free float of 2.42 million shares, Nexans Maroc is capitalized at just over 331.7 MDH, or barely 0.05% of the overall market capitalization. Despite the share’s reduced liquidity, Nexans is doing well and developing positively since the start of the year, and is posting an annual performance above that of the market of + 9.52%, against + 2.53% for the MASI.
“The low number of shares means that the slightest movement can lead to significant changes”, explains this analyst who claims to have not hedged the value for several years.
“The Nexans Maroc share has long been considered as a portfolio fund value (…) which presented long-term growth potential and was often recommended for purchase,” recalls the market professional.
For its part, the company was always keen to remunerate its shareholders, even in times of crisis. Operating in a context marked by the slowdown in public markets, Nexans Maroc decided to maintain its dividend distribution policy.
“The group usually distributed almost 80% of its profit, but it is clear that the market demanded more and wanted more intervention from Nexans Morocco on the capital market”, explains the analyst.
It must be said that the electrical wiring specialist was more oriented towards the development of its core business and the improvement of its industrial performance than towards the diversification of its sources of financing. Apart from a capital increase carried out in 2008 and a few updates to its commercial paper issuance program, the manufacturer has made very little use of the capital market. The subsidiary of the French cable giant Nexans launched in 2017 “a transformation plan to adapt its organization and its processes to technological developments, to its 2018-2022 strategy, to the evolution of its market and to improve its competitiveness and profitability” . Operating in electrical wiring, Nexans Maroc covers several sectors of activity such as construction, telecommunications and automotive. The company has also just strengthened its industrial presence in Morocco with the inauguration of a new factory for the Telecom Systems business unit in Nouaceur. It will produce fiber optic cable connectorization accessories there. This plant will thus enable the Nexans group to increase its production capacity, while expanding its product range and offering new supply chain optimization services, as well as serving the European and North African markets. Note that Nexans Maroc represents a platform for the group to conquer the markets of other African countries. The company also has two subsidiaries located in Senegal and Ivory Coast.
For Nexans Maroc, export development and the plan to reduce fixed costs represent its main growth levers. In 2020, the export activity, which represents 35% of turnover, grew by 58% compared to the previous year. This made it possible to contain the decline in the group’s consolidated revenues from 2% to nearly 1.8 billion dirhams.
In addition, Nexans Maroc managed to increase its profits in 2020 despite the difficult economic environment. Its consolidated net income thus increased by 22 million dirhams to reach 47 million dirhams, supported by a decrease in working capital requirement due to the decrease in accounts receivable and the rationalization of stocks. In this context, the group intends to propose to its board of directors the distribution of a dividend of MAD 10 / share for this financial year, against MAD 5 / share announced in 2019.
Aida Lo / Eco Inspirations