Following an exceptional 2024, wherein Transnational Corporation Plc (TRANSCORP) recorded a 189.7% YoY surge in earnings to N94.1 billion on the back of robust increases in revenues from power and hospitality subsidiaries, we expect the company to sustain its strong earnings trajectory into the 2025 financial year.
We are of the view that TRANSCORP's performance in 2025 will be shaped by the successful transition to a bilateral trading arrangement in line with the Electricity Act 2023, which offers enhanced revenue stability and improved cash flow management for the power business. Additionally, the sustained growth in key hospitality performance metrics— such as Average Daily Rates (ADR) and occupancy rates— supported by additional revenue from the 5,000-capacity event centre further bolsters our outlook for the group.
Following the completion of the share reconstruction, TRANSCORP returned to the board with 10,161,997,574 ordinary shares listed at a share price of N44.20 per share. This reconstruction exercise and our revised forecast for the constituent businesses resulted in a 12-month Target Price ("TP") of N61.10, which leaves our BUY recommendation on the ticker unchanged.
