BERGER PAINTS: MUSCLE WHERE IT MATTERS.

It appears like so far this financial year, Berger Paints Nigeria PLC, has developed muscle where it matters most for a manufacturer: Direct cost caging.
According to the unaudited figures for nine months to September released last week, Berger Paints recorded only 1.8% increase in its direct cost while growing turnover by 18.7%.
The company's turnover closed the nine months at N2152.5m as against N1812.8m while direct cost stood at N1043.4m, thus only marginally higher than September 2014's N1015m.
In addition, only 3.1 per cent increase in administration charges to N706.7m was recorded.
Hence, the near crippling 164.3 % increase in selling and distribution cost to N242.1m and 42% decrease in investment income, failed to hold Berger Paints to ransome successfully.
As a result, its profit before tax ended nine months 88.6% up to N303.4m from N160.9m for a far healthier 13.1% profit margin compared to 8.13% previously.
Good for liquidity position? Not quite because with current liabilities rise by 11.2 % compared to very marginal 0.08% in current assets, working capital dropped by 16.6% to N522.7m from N626.4m.
THUS:
* Berger Paints needs to develop all round muscles by tackling selling and distribution cost growth
* Of course, all things being equal and in spite of the times, Berger Paints seems on course for a relatively good 2015 financial year.

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