CADBURY NIGERIA PLC: MORE LIQUIDITY BUT....

Cadbury Nigeria PLC is apparently having better run with its liquidity position this financial year compared to last year but unfortunately, this has not translated so far in higher profitability.
According to the figures for the nine months to September 2015 released this week, compared to its threatening net N15,247m deficit cash position by 2014 September, it now had N860.6m net surplus.
The tight grip applied to shore up the situation becomes obvious when it is discovered that Cadbury Nigeria's current liabilities dropped by 7.6 per cent to N13935.4m within the period while decrease in current assets came to 1.31 per cent from N12336.3m to N12173.6m.
In the end, the company's working capital position only worsened slightly by 3.28 per cent from September 2014 N1705.9m to N1761.8m.
However, none of the relief that appeared in the physical cash position of the company ( up 81.7 per cent to N4545.8m) could be attributed to increase in profit. On the contrary, Cadbury Nigeria's profit before tax dropped significantly by 98.3 per cent to only N40.8m compared to N2396.7m. earlier by September 2014.
This was as a result of 9.6 per cent decrease in turnover to N21073.4m from N23313m and cost pressures applied by even if marginal increases recorded in cost of sales (up 0.46 per cent) and Distribution and Administration expenses ( 0.28 per cent higher).
THUS:
* With just three months to go, Cadbury Nigeria is almost certain to end 2015 financial year desperate for even single digit profit margin.
* That is, unless a way is found to either shore up sales or keep costs down in step with turnover decrease rate.

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