Livestock Feeds Plc Balances Growth and Cost Control Amid Finance Headwinds

Livestock Feeds Plc shows strong revenue growth, solid operations, and disciplined cost management. Although higher finance costs have pressured short-term profits, proactive debt reduction, expanding market presence, and improving operational margins position the company for long-term earnings recovery, reinforcing its resilience in Nigeria’s agricultural and consumer goods sector.

In the first half of 2025, Livestock Feeds recorded revenue of ₦20.8 billion, representing a robust 34% increase from ₦15.49 billion in the same period of 2024. This growth underscores the company’s expanding market reach and increasing demand for its animal feed products. Gross profit rose 26% to ₦2.96 billion, a reflection of improved production efficiency and effective pricing strategies in the face of inflationary headwinds. Operating profit stood at ₦2.05 billion, confirming that the company’s core operations remain strong despite the drag from higher borrowing costs.

However, profit after tax fell by 62% compared to the prior year, primarily due to increased interest expenses associated with leverage. Basic earnings per share came in at 3.41 kobo for the period. Yet, this profitability pressure is largely cyclical—linked to elevated financing costs—which the company is actively addressing by reducing its debt burden. In fact, total debt declined from ₦13.95 billion in 2024 to ₦8.61 billion in early 2025, enhancing its net debt position and reducing future interest obligations.

The balance sheet remains stable, with total assets at ₦23.05 billion and total liabilities at ₦19.62 billion.

Shareholders’ equity increased slightly to ₦3.42 billion, while retained earnings grew to ₦1.23 billion, highlighting ongoing profitability. Operating cash flow was strong at ₦6.06 billion, supporting both loan repayments and capital investments. The company ended Q1 2025 with ₦879.8 million in cash and cash equivalents, ensuring healthy liquidity.

Importantly, administrative expenses grew more slowly than revenue, and selling/distribution costs remained stable, reflecting disciplined cost control.

This operational efficiency, alongside sustained top-line growth, provides a solid foundation for future margin improvement—particularly if finance costs ease in the coming quarters.

In summary, Livestock Feeds Plc combines consistent revenue expansion, operational strength, improving leverage metrics, and reasonable valuation. For investors seeking exposure to Nigeria’s growing agricultural and consumer goods sector, the stock offers both growth potential and value, with the possibility of enhanced profitability as debt service costs decline.