UACN: GOOD BYE TO DOUBLE DIGIT MARGIN IN 2015

Apparently, UAC of Nigeria can kiss double digit goodbye this financial year as macro economic cookies continue to crumble. Or so indicates nine months figures to September released recently.
One thing is sure though, UACN is still trying to stay in control. For example, growth in distribution and other expenses slowed to 15.6% in the third quarter compared to over all 28.6% to N3054m recorded for the full nine months.
Also in the third quarter there were heartwarming increases in income from other sources ( from N3.04m to N414.1m) and share of profit from holding investments from N0.39m to N226.5m when compared to levels at the same time in 2014.
However, none of these could stop nine months profit margin from sliding to 5.02% as the third quarter closed with 4.0%. At this point it was apparent that the 10.8% profit margin clocked by 2014 year end will be beyond reach this time around because by September then, the closing margin was 8.45%.
The spoiler was less the 9.35% drop in overall income as main revenue decreased by 9.82% to N54602.4m; the increase in overhead or lower decrease in cost of sale but more influenced by 264.5% jump in finance charges in the third quarter.
The higher charges were inevitable because current loan liability increased to N26443.7m from N22936.8m.
In the end UACN settled for N714.3m profit before tax in the third quarter bringing nine months figure to N2860.3m, down 58.8% on the N6775.9m achieved by September 2014.
SO:
* Does UACN have anything up its sleeves by drawing down inventories, and receivables to beef up cash a little bit and reduce trade payable?
* No matter what though, UACN may still be depended on to stay in step with tradition to declare dividend.

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