Investors can keep shares of Ellah Lakes in their portfolios because plans by the board to raise N250 billion from the capital market for investments could “drive a stronger revenue growth” and help it to achieve an “improved asset utilization, and gradual margin recovery,” according to analysts at Meristem Research.
The company intends to source the funds through either a public offer or private placement to boost its balance sheet and liquidity profile.
In a note obtained by Business Post, Meristem Research said the fresh capital, if successful, should “expand the company’s asset base, with total assets projected to increase from N24.91 billion in 2024FY to N32.69 billion in 2026FY,” strengthening the short-term liquidity position, with current and quick ratios trending upward, bringing the firm closer to industry benchmarks.
“In addition to shoring up liquidity, the funding will provide Ellah Lakes with greater flexibility to finance its ongoing planting programme and expansion drive and source Fresh Fruit Bunches (FFB) from local producers in the near term until its plantations reach full maturity.,” a part of the note stated.
Meristem Research noted that, “Based on our 2025FY expected BVPS of N6.05 and our target P/B of 2.55x, we arrive at our target price of N15.40, representing a 3.21 per cent upside compared to the ticker’s closing price of N14.95 as of August 27, 2025. We recommend a HOLD on the ticker.”
However, it was stressed that Ellah Lakes is faced with operational risks that could constrain revenue delivery, and failure to achieve processing targets may constrain projected growth despite the planned capital raise, while escalating input costs threaten margins.
“Furthermore, weak yields, delayed palm maturation and palm oil price volatility could further pressure the company’s ability to sustain revenue and profitability margins (although there is a planned diversification into livestock, oil palm remains the core business),” it pointed out.
Ellah Lakes competes the market share in Nigeria with Presco and Okomu Oil, which closed at the Nigerian Exchange (NGX) Limited on Monday, September 1, 2025, at N1,480 and N1,020. Ellah Lakes closed yesterday at N12.69.