RED STAR EXPRESS: COULD BE BRIGHTER.

Red Star Express PLC will need to glitter some more if it hopes to end the financial year to March better than it did in the previous year. That is, if its mid year figures to September was anything to go by.
According to the figures, turnover from main line business barely grew yet even this was watered further by decrease in income from other sources.
Main line revenue closed the period at N3357.3m, up only 1.47% on N3308.8m previously. Naturally this growth was too low for expenses to stay in line.
Cost of sale increased by 4.36% to N2491.8m from N2287.8m thus depressing gross profit to N865.5m compared to N921m earlier.
Then overheads ended 2% up at N598.6m from N587m.
Along the same vein finance income dropped by 39.7% to N5.04m from N8.36m and other income went down 25.4% to N6.4m from N8.58m.
A breather, on the other hand, came from 46.6% drop in finance cost from N11.8m to N6.3m.
Balancing off, Red Star Express ended the half year with N224.3m profit before tax, down 24.5% on September 2014's N297m.
That works out at N6.66 gain on each N100 income as against N8.93 previously.
However, the company was not thirsty for cash within the period, it just closed with less working capital and less cash on hand. The working capital by September was N1166m compared to N1198.8m at the same time in 2014 while cash closed at N506.9m from N674.4m previously.
* The key to hitting even previous year's form lies in more effective cost control and if possible more business.
* There is good enough grip in liquidity management.

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