Morning Market Brief 29th November 2018
NIC Group Plc (NSE: NIC) 3Q18 Results
NIC Group Plc (NSE: NIC) announced a 4.1% y/y drop in 3Q18 profit after tax to KES 3.2Bn. Net interest income (NII) fell 5.9% y/y while Non-Interest Revenue grew by 7.2% y/y leaving operating income slightly down 2.2% y/y to KES 11Bn. Total operating expenses were muted (-2.1% y/y) at KES 6.7Bn mainly attributed to a 25.4% y/y decline in Loan Loss Provisions (LLP). Staff costs grew 8.8% y/y while other operating expenses also rose 8.4% y/y. Deposits grew 10.3% y/y while the loan book shrank by 3.1% y/y to KES 114.9Bn.
We maintain our BUY recommendation on NIC at a target price of KES 34.89. This represents an upside potential of 54.0% from the current market price of KES 22.65.
Trading is still slow in the market with no clear movement as the holiday season starts to creep in. Trades are on the key index counters; Safaricom, Equity and KCB and the trend is expected to continue into the end of the week. No major movements in price expected on the counters with thin spreads on bids-asks for most shares.