TRANSCORP HOTELS PLC: SEEKING MORE STRENGTH.

In the face of decreasing income and increasing expenses, by September it was obvious that Transcorp Hotels could do with more strength from new or revamped streams.
According to the figures for the period released not too long ago, Transcorp Hotels invested N4106.1m on subsidiaries within the period.
This no doubt, was in search of new income streams that could beef up, instead of dragging down main business inflow.
Sure, by September the subsidiaries had helped narrow group gross income drop to 6.0% from 6.16% for the company but that was about it.
In the first place, cost of sales for the company at N2295.5m down 4.79% was nearer the income decrease than 3.26% overall drop for the group to N2462.5m.
The same with administration costs which at N5230.2m for the group was 2.15% up compared to 1.19% increase for the company.
Also, the company virtually accounted for solid increase in finance income by 70.1% to N275.9m for the group and the fourfold rise in income from other sources to N377.1m from N85m.
Thus, eventually, the group profit before tax dropped by 15% to N3422.8m from N4024.6m as against 12.8% decrease from N4021.3m to N3505.3m for the company.
As a result group gain on each N100 income decreased to 31.6% from 34.9% while that of the company closed at 33.6% compared to 36.2% by September 2014.
IN SUM:
* This is hoping that new money injected into subsidiaries pays off and soon too, because the cost of the bridged loan of N2953.4m may soon begin to impact on net finance income.
* For now though, nothing much can be done to beef up sliding bottom line unless there is enough fat in the administration overhead to melt down.

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