D N MEYER PLC: RAY OF HOPE

From the results released by DN Meyer PLC for nine months and third quarter to September, the obvious deduction is that the third quarter offered some ray of hope that year end figures may not look as bad as the nine months ones look.
The first indicator to this effect was the fact that DN Meyer's loss came to N72m, that is 27.2% better than the N98.9m loss by September 2014.
The other indicator was that a change in fortune trend occurred in the third quarter as turnover increased by 2.04% to N279.9m for the quarter and more importantly, a very modest profit of N0.52m was recorded  compared to N40.8m for the same quarter in 2014.
A closer look shows that profit emerged as cost of sale dropped by 5.67% to N156.5m in spite of the turnover increase, as operating expenses grew by only 1.62% and finance cost dropped by 59.1% to N12.4m.
In other words, it was 53.8% increase in distribution costs to N10.2m that gave room for concern.
Interestingly, however, it became less a headache within nine months perspective increasing by only 6.01%.
Hence DN Meyer's reduced loss for nine months was as a result of 26.% decrease in finance costs and 13.1% drop in cost of sale as turnover went down by 8% to N837m from N907.8m.
THUS:
* The ray of hope will be brighter and surer if the third quarter increase in distribution costs is manageable.
* Other gains and losses  seemed too to have grown some good wings in the third quarter. Does this portend future trend or just a flash in the pan?

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