CUTIX PLC: CRUISING TO DOUBLE DIGIT

From the half year figures to October 30 released recently, Cutix PLC is cruising well for a closing double digit gain on N100 income this financial year.
This was due more to higher growth in revenue in the second quarter although cost pressure within the same period was equally more.
By October, Cutix revenue had dropped slightly by 0.91% to N1132.9m but in the second quarter, the growth recorded was actually 26.2%.
However, cost pressure came more from 4.74% increase in administration expenses by half year to N152.6m more so in the second quarter with increase recorded at 8.29%.
There was also pressure from finance cost which by half year was up 27.7% even as income decreased although second quarter growth was less at 19.1%.
In spite of the pressures Cutix ended second quarter with 9.17% gain on N100 income (profit margin) compared to 5.31% by the same quarter in the previous year.
In view of the lower pressures in the first quarter, the full profit margin for half year came to 11.7%, way ahead of 6.54% recorded previously.
Now, by year end previously, this half year profit margin rose to 8.57%, thus raising the possibility of Cutix ending the current year with a more solid double digit margin if the previous financial year's trend holds.
The truth was that by half year in the previous year, only 37% of the full year profit had been achieved. If it stays true this year, then the half year profit of N132.7m is likely to close well ahead of the N202.1m reported for all of previous year.
SO:
* With the recent drop in benchmark interest rates, less pressure here should help Cutix more into more solid double digit profit margin.
* That is no reason though not to monitor overheads more effectively.

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