Spirits maker Diageo’s (LSE: DGE) plan is twofold. First, the company is pushing for increased sales of Guinness and local beer brands to build links with distributors and consumers alike. The hope is it will be easier in the future to sell the higher margin spirits Diageo is famous for, such as Smirnoff and Johnnie Walker.

Results for the first six months of fiscal 2016 illustrated that parts of this plan are working. Organic volume movement rose 7% and organic net sales were up 3%, although foreign exchange movements meant an actual fall in real-terms sales.

While operating margins in Africa still lag those posted in developed markets, this is to be expected as the company invests heavily in marketing and focuses primarily on lower-margin beer sales. Looking forward, the emphasis Diageo has placed on Africa is remarkable and it now accounts for 13% of revenue, a figure that should continue to grow in the years to come as developed Western markets offer little room for growth.

Core market

Consumer goods giant PZ Cussons (LSE: PZC) is no stranger to Africa, having been founded in Sierra Leone well over a century ago. While the company long ago expanded into Asia and Europe, Africa still provides the majority of revenue and Nigeria alone accounts for roughly 25% of group profits.

However, trading in Nigeria has been poor recently due to high inflation and subsequent currency devaluation. Still, on a constant currency basis, Africa revenue rose a full 17.9% over the past half-year period. Given the company’s market-leadership in Nigeria, Africa’s largest economy, and growing operations in Ghana and Kenya, PZ Cussons is well-placed to benefit in the coming decades from the growing middle classes in these countries.

Exploiting spending power

Ex-Barclays CEO Bob Diamond is obviously more bullish on Africa than his former company, which recently announced plans to divest its African holdings in the coming years. Diamond, after being ousted from Barclays, turned his attention to his new company, Atlas Mara (LSE: ATMA), which invests in banks across Sub-Saharan Africa. Atlas Mara’s stakes in seven separate banks are intended to take advantage of growing spending power among consumers who will require greater access to financial institutions.

Although the company slipped into the red in Q1, it posted an $11.3m net profit in full-year 2015 and expects to exceed this target in 2016. If the bank can do better than larger rivals such as Standard Chartered in avoiding non-performing loans, particularly those related to the commodities sector, this should be a reasonable target thanks to strong performances from Nigerian and Rwandan subsidiaries. The need for banking services is certainly growing across Sub-Saharan Africa, and if mobile banking doesn’t obviate the need for traditional banks, Atlas Mara is well-placed to take advantage of this.

The post Why Diageo plc, PZ Cussons plc and Atlas Mara Ltd are betting big on Africa appeared first on The Twelfth Magpie.

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Ian Pierce has no position in any shares mentioned. The Motley Fool UK owns shares of PZ Cussons. The Motley Fool UK has recommended Barclays and Diageo. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Shares in financial services company Atlas Mara (LSE: ATMA) have risen by around 15% today after it confirmed it has had discussions with a consortium of investors regarding the potential acquisition of Barclays’ stake in Barclays Africa. Barclays’ 62% stake is set to be reduced as part of a new strategy by the bank’s new management team and with Atlas Mara’s management supporting the exploration of a potential combination between the two companies, a deal could be on the cards.

This could be a sound move for Atlas Mara, since the company — which which was co-founded by former Barclays’ CEO Bob Diamond — is intent on building up its sub-Saharan presence, and a combination with Barclays Africa could have a positive impact on accelerating that process. Clearly, there is no guarantee that any combination will be effected, but the potential for it could lead to further gains in Atlas Mara’s share price in the short run. And with Africa offering significant long term growth potential within the financial services space, the company could be worth a closer look for less risk averse investors.

Upbeat

Also among the major movers today is Plexus (LSE: POS), with the oil and gas engineering services company raising $5m through a subscription deal with Russian oil and gas equipment maker LLC Gusar. This will involve Plexus issuing 6.8m shares at 52.05p per share, and at the same time as the subscription, Plexus, Gusar and Konar have also entered into a commercial agreement under which Plexus will work with them to finalise an additional licence agreement to enter Russia’s larger and more active surface land and platform production well-head equipment markets.

Clearly, the market is upbeat about today’s news, with Plexus’s shares moving 8% higher. The subscription agreement should enable Plexus to fast-track its entry into Russia’s large and important oil and gas production sector and further diversifies its revenues away from its traditional North Sea jack-up exploration market. As such, it could have a positive impact on Plexus’x future share price performance and for long term investors who can live with above average risk, Plexus could prove to be a sound buy.

Volatile

Meanwhile, shares in Redt Energy (LSE: RED) have slumped by 15% today despite it reporting a €700k profit for the 2015 financial year. This is a significant improvement on last year’s €2.2m loss and was largely due to a rise in revenue from €5.6m in 2014 to €11.1m in 2015, with it successfully shifting towards a pure play energy storage business.

However, the market seems to have reacted negatively to Redt Energy’s decision to take the commercialisation of its energy storage system step-by-step, and to try and avoid falling into the trap of selling a product that is not market-ready. As such, the company’s profitability growth may be slower than many investors had anticipated, although Redt continues to believe that there is latent demand for a storage system that performs reliably and economically. As such, it could be worth a closer look for less risk averse investors, although its shares may remain volatile in the short run.

The post Why Atlas Mara Ltd, Plexus Holdings plc and Redt Energy plc are among today’s top movers! appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of Barclays. The Motley Fool UK has recommended Barclays. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.