The management of Zichis Agro Allied Industries has disclosed plans to strengthen shareholders value and market liquidity through a proposed Initial Public Offer (IPO) of up to N10 billion for its working capital.
The proposed working capital also for the acquisition of an additional 1,000 hectares of land for oil palm expansion, development of an oil milling plant, and strategic vertical acquisitions of existing poultry operations in the South-South and South-East regions to support integrated meat processing.
The company in a document obtained by Financial Edge in its growth & cash flow strategy stated that over the medium to long term, it targets the development of 1,000 hectares of Royal
Palm estates, reinforcing the Company’s vertically integrated model, earnings resilience, and long-term value creation for shareholders.
The management stated that its ability to achieve N1.5 billion in operating cash flow is underpinned by a diversified and scalable revenue strategy across its core agribusiness verticals.
It explained that, “In the poultry segment, the brooding operation targets 50,000 day-old chicks (DOCs) across three production cycles, generating an estimated inflow of approximately N580 million, with one cycle retained for internal egg production.
“Egg production remains a major revenue driver, with 50,000 layers operating at 80per cent capacity, translating to approximately 40,000 eggs per day over 360 days and an expected annual inflow of about N2.4 billion. The feed milling business, designed with a 30-tonne-per-day capacity, is projected to achieve output of approximately 7,200 tonnes per annum, of which 60% is targeted for commercial sales at an average price of N13,800 per 25kg bag, supporting projected revenues of approximately N2.4 billion from FY-2026/27.”
The management explained that additional cash flow will be generated from the oil palm business, with 60 acres under cultivation expected to yield approximately 900 tonnes of fresh fruit bunches, translating to estimated inflows of N450 million at N500,000 per tonne, while the fish farming segment remains a medium-term growth lever, with expansion plans currently under evaluation.
“Given the Company’s low leverage profile, expansion will be executed through a balanced capital structure, with selective equity dilution to support long-term growth initiatives.
“Near-term expansion will be supported by 2 billion naira commercial paper to boost our working capital and scale up our layers to 50,000 layers for egg production, feedmill capacity to 30TD and secure an additional 1,000 hectares for our palm fruit estate,” the company explained.
Financial performance
The fully integrated agro-industrial company, revealed that its profitability ratios show a strong and improving profile.
According to the document, the company’s net profit margin expanded significantly to 35.9per cent from 12.7per cent in FY-2024, highlighting superior cost discipline and pricing strength. Return on equity (ROE) is estimated at approximately 18.5per cent, while return on assets (ROA) stands at about 15.7per cent, both robust for a capital-intensive agribusiness. Liquidity ratios remain very strong, with current assets of N360.3 million against total liabilities of N53.1 million, implying a current ratio of about 6.8x.
“Leverage is minimal, with a debt-to-equity ratio of roughly 0.05x, reflecting a near debt-free balance sheet and very low financial risk. Asset turnover improved to 0.44x from 0.33x in FY-2024, indicating more efficient asset utilization as scale increases.”
The company stated that its integrated agribusiness model continues to deliver tangible financial benefits, stressing that revenue diversification is improving, with no single segment accounting for more than 38per cent of total revenue, thereby reducing earnings volatility.
“The steady growth in feed milling supports margin stability in poultry and fish operations, while the oil palm business provides long-term earnings visibility as plantations mature. Inventory levels rose to N196.5 million (+98.4per cent YoY), reflecting higher production volumes and
strategic stock build-up, while receivables increased to N155.3 million (+216.8per cent YoY), consistent with expanding sales activity.
“Asset growth of 22per cent YoY to N1.06 billion confirms sustained reinvestment into productive capacity, positioning the company for continued top-line expansion.”
