NCR NIGERIA: THE LATE STARTER'S NIGHTMARE.

It looks like 2014 business trend is repeating itself for NCR Nigeria PLC this financial year. That is, a sluggish start pepped up by the third quarter to a fairly good year. How far will it take NCR this year?
The answer seems to be that it will not go very far this year because it looks like the slow start this year was really slow.
First. according to the figures released for the period, even the third quarter ended up dragging overall turnover growth down to 4.73% at N5323.6m because it closed with 37.2% drop to N1291.6m.
Beyond this though, the quarter came up with better grips on cost of sale and administration cost while slipping slightly over distribution and selling costs.
As against the 37.2% decrease in the quarter s turnover, its cost of sale had dropped faster by 39.8% to N952.6m thus paving the way for gross profit increase.
However, things had been so tough in the half year to June that the 7.86% increase in cost of sale recorded for the nine months to N4715.2m was well ahead of 4.73% increase in overall income for the nine months. The result was the decrease in overall gross profit to N608.4m from N711.6m previously.
This way too a lower 136.6% increase in administration costs to N13.2m for the third quarter only resulted in 294.4% rise in the nine months figure to N119.1m from N30.2m.
It was in distribution costs that the third quarter tried to stoke the fire for the full nine months. It ended with 193.4% jump to N80.1m but this only resulted in 159.2% increase for the nine months to N314.4m from N121.3m.
Consequently, in 2014, NCR clocked 14.9% profit margin in its third quarter but settled for 11% for the nine months.
This year, the third quarter came up with a stronger 19.6% but nine months overall came to only 3.29%.
Now, that is a sure hurdle from a very poor start.
THUS:
* Can NCR end the year with higher profit margin? Answer is yes if the third quarter tempo can be sustained in terms of relative cost growth.
* And if the drop in third quarter turnover is reversed in the fourth quarter.

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