UNION DIAGNOSTIC & CLINICAL SERVICES PLC: LOOKING GOOD

Even by Nigerian stock market standards Union Diagnostic & Clinical Services PLC is a small company being one of those still battling to cross N2bn turnover mark. However, it is among the few still looking good in these trying times.
According to figures for nine months to September released not too long ago, Union Diagnostic almost doubled its profit margin within the period and more importantly had enough cash to invest substantially in new equipment.
By September Union Diagnostic revenue had increased by 21.1% to N936.8m from N773.7m at the same time in 2014.
Then, as if to come up with more tasty ending, only costs essentially outside management control grew out of line.
Cost of sale rose by a lower 15% from N398.5m to N458.2m thus ensuring 27.6% increase in gross profit.
Along the same vein, labour cost grew by only 0.99% to N132.5m and more importantly, other major overheads dropped. Transportation expenses decreased by 18.8% to N14.7m; repairs and maintenance cost declined 14.6% to N21.6m from N25.3m and other operating expenses went down by 10.5% to N74.5m from N83.2m.
The out of control costs were rent which closed September up 87% at N16.7m from N8.93m and finance cost which closed the period at N8.17m up 54.8%.
Provision for depreciation also fell into this category closing 92.6% up understandably because of the N200m invested in new medical equipment and land and building within the period.
All three though only succeeded in making the company end September with 16.6% profit margin but this was still a great improvement on 9.22% reported by September 2014.
Union Diagnostic is more liquid too even after the fixed assets purchase. Its working capital was N709.3m, way ahead of N608.7m previously.
SO:
* It should be all smiles for shareholders come next general meeting  all things bring equal.
* Indeed this is surer given the recent drop in benchmark interest rates.

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