NASCON H1 2026 profit jumps 27.6% on cost control and cash income - here's what investors need
NASCON Allied Industries Plc reported a strong first half of 2026 with pre-tax profit rising 27.59% to N29.70 billion and earnings per share climbing 25.74% to N14.51 for the six months ended June 30, 2026. Revenue grew only 3.84% to N81.16 billion, but profit surged ahead due to strict cost control and significant income from the company's substantial cash holdings. Cost of sales fell 1.03% to N40.35 billion despite higher revenue, lifting gross margin to 50.28% from 47.83%, while operating profit rose 15.01% to N24.53 billion.
The profit growth had two equal drivers: N3.20 billion came from core business efficiency gains, and N3.22 billion came from interest earned on NASCON's N46.05 billion cash pile (with minimal debt of N64.74 million). Interest income more than doubled to N5.35 billion. However, investors should watch two key factors: first, whether this high interest income level is sustainable as market rates fluctuate; second, the rapid growth in trade receivables, which jumped 68.01% to N65.20 billion (88.43% from related parties within the group), while provisions against bad debts remain low at just 0.22% of gross receivables.
The market has responded positively, with NASCON shares up 80.93% year-to-date to N194.50 and dividend yield at approximately 3.08% (N6.00 per share). Given the strong dividend growth outpacing earnings, investors should consider whether to hold for continued payout growth, monitor receivables collection trends closely, or wait for clearer signs of sustainable core business profitability before increasing exposure.