April 10, 2017

Afriland Properties should diversify its operation for improved result – Akinduro

Heric Akinduro, Chairman, Ibadan Zone Shareholders Association

By Nkiruka Nnorom

Heric Akinduro, Chairman, Ibadan Zone Shareholders Association spoke on what Afriland Properties Plc needs to do to turn around their financial performance going forward.

How do you view Afriland Properties Plc’s 2016 financial performance for 2016?

The result is not really not encouraging, and when we consider everything that made the result unencouraging, you see that the economy was too good because of the recession. But we believe that with time and what the management is trying to put in place now, as time goes on, they will start having better result. My advice to them is that in their estate management, they should consider people at the lower rung of the economy. When real estate properties go for as much as N240 million and N500 million, you can hardly see people that can afford it, but when it goes down to N4 million to N5 million, then a lot of people can afford it.

My advice to them is to try and capture more market share. Estate market is a huge market. If you put the right peg in the right place you will achieve better result, but when you are putting the right peg in the wrong hole, the result will be different. They are in good business, but they should re-strategize so that they can capture the economy and by the time we are discussing next year, they will have a better result and there will be dividend for shareholders.

Heric Akinduro, Chairman, Ibadan Zone Shareholders Association

Apart from restrategising and targeting the low income earners, what other things do you think the company can do to come out of the wood?

They should look deep into the market and see other areas they can exploit. Even if it is not real estate, they can expand to Abuja. Other companies are making it in real estate management. So, they should look deep into their business and see where they have leading role in the business and do more in that area. If they want to concentrate they should strive to capture a segment of the sector, be it malls, garage or something. They should look into it; what we want is result. The Board and management are capable of doing and that is why we put there. So, they are in the best position to restrategise and see how they can deliver result. The value of what you have is meaningless until you determine what you want to do with it.

Also, on their overhead, they should try and minimise their expenses. When a company is not making and you are still paying consultant is not wise. They should also look into this. What a consultant is getting can be used to pay as much as 40 staff. They should look for good hands outside and engage them instead of engaging one consultant, and paying so much even when he is not delivering result. They should employ young graduates that have the zeal and energy to deliver, so tat they can turn this company around. What we want from them is to deliver result and give us returns on our investment.

Are you satisfied with bonus share of one for 10 the company is giving out?

Well, we don’t have option. They are giving it to us. They are increasing our value; they are increasing our units, although the price of the stock as at today is N3.05. But that one for 10 bonus share they are giving us, well we don’t have any other option than to take it, but that is not the best return on our investment.