Last Update21 Jul 25Fair value Increased 152%
WaneInvestmentHouse has decreased revenue growth from 275.0% to 33.0%, increased profit margin from 61.0% to 77.0%, increased future PE multiple from 402.0x to 802.0x and increased shares outstanding growth rate from -0.1% to 0.3%.
Key Highlights:
- EGM Set for July 25: Seeking approval for public/private equity issuance and conversion of related-party loans to ordinary shares.
- Debt-to-Equity Strategy: Board proposes converting director/shareholder and CBN program loans to equity—aimed at deleveraging and strengthening the balance sheet.
- Revenue Surge: Q3 2025 revenue of ₦68.7m vs. ₦416k YoY—despite a ₦238.1m operating loss driven by administrative costs.
- Stock Up 122% YTD: Investor sentiment turns bullish amid turnaround expectations; share price at ₦7.64.
- Palm Oil Production by H1 2025: Expansion of the Edo plantation (2,400 ha) and future palm kernel oil production seen as catalysts.
- N250bn Raise Planned: To consolidate land, improve agri-infrastructure, and scale operations.
- Strategic Land Deals: Ondo State’s potential equity-for-land lease (5,000 ha) would expand asset base without upfront cost.
- Cash Position Thin: Liquidity risk persists—cash balance ₦15.9m, down from ₦243m.
Ellah Lakes Plc appears poised for a structural transformation as it prepares for an Extraordinary General Meeting (EGM) on July 25, 2025, seeking shareholder approval for a sweeping capital restructuring initiative. The proposal includes issuing new equity—either via public offer or private placement—and converting existing director and related-party loans into ordinary shares.
These moves mark a crucial milestone in the company’s ongoing turnaround journey, one anchored by its pivot into agribusiness following the 2019 acquisition of a 2,400-hectare oil palm plantation in Edo State. Now, with palm oil production slated to begin in H1 2025, the firm is gearing up for what could be a breakout year.
Q3 2025 results show a dramatic revenue jump to ₦68.7 million, from just ₦416,000 a year ago—signaling early traction. However, the operating loss of ₦238.1 million, largely due to overhead costs, suggests scale and efficiency have yet to catch up.
Despite the losses, investors have responded optimistically. The stock has gained 122% year-to-date, trading at ₦7.64, with analysts pointing to the EGM’s proposals as a vote of confidence in Ellah Lakes’ capital and operational blueprint.
A key part of the strategy is debt conversion—notably, the board plans to convert ₦658 million owed under the Central Bank of Nigeria’s Oil Palm Development Programme and other liabilities into equity. This could ease the company’s debt burden and improve solvency metrics significantly.
The ambition is bold: a ₦250 billion raise to finance land consolidation, agricultural infrastructure upgrades, and production acceleration. If realized, this would position Ellah Lakes among Nigeria’s top agri-businesses by scale.
Another game-changer is the planned integration of ELP Sunshine Ltd, with a novel proposal from the Ondo State Government to trade its 20% equity stake for a long-term lease on 5,000 hectares—effectively expanding Ellah’s land assets without cash expenditure.
Still, challenges loom. With cash reserves at just ₦15.9 million, down from ₦243 million at fiscal year start, liquidity remains a significant constraint. Execution risk is high, and successful capital deployment post-EGM will be critical.
Conclusion:
Ellah Lakes is undergoing a high-stakes transformation. While financial fragility persists, a successful EGM outcome could unlock massive upside—both operationally and in shareholder value.
The proposed equity issuance and debt conversion are strategic and timely. If managed with discipline, Ellah Lakes could emerge as a leading force in Nigeria’s agribusiness sector—turning what was once a speculative stock into a fundamentally grounded growth story.
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Disclaimer
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