VONO PRODUCTS: NOTHING WAS GOOD ENOUGH.

For Vono Products PLC, the financial year to September 2015 was one in which nothing was good enough to turn the tide. In spite of all efforts, it was downhill into greater loss.
According to the brief on the year released to the stock market within the week, market continued to shrink and efforts to cage cost continued to amount to little in terms of visible impact.
Firstly, it was a year all income sources went down. The 10.9% decrease in core revenue from N889.7m to N793m was depressed further to 14.5% drop in total income because other operating income dived by 77.4% to N11.5m from N50.8m.
To worsen matters, direct cost of producing core revenue refused to decrease rising instead by 5.31% to N616.8m from N585.7m.
From there on, Vono Products did put up a good fight particularly by decreasing selling and distribution costs by 47.8% to N9.4m from N50.8m and holding administration expenses down enough to secure 4.57% decrease.
A close study of how the drop in administration cost came about threw up some surprises as it turned out that personnel cost dropped by 7.91% to N125.8m; electricity bill went down 15.1% and cost of diesel decreased by 10.7%, amongst others.
However, advertising cost increased by 33.3% to N5.49m from N4.12m but it will take much closer study to see if this was in spite of the revenue drop or was what helped to keep some customers in line.
Another surprise was the 7.53% decrease in finance cost to N22.1m in a year liquidity pressure was far greater as working capital deficit closed at N645.5m from N458.5m and short term debt rose by 32.2% to N460m from N348m.
The secret lay in the soft interest bearing loan from Vitafoam PLC which at year end had N429m outstanding while long term loan from the same friendly source of N92.7m from 2014 was paid up.
That could not stop Vono Products overdraft commitment from more than doubling to N23.8m from N11m, though.
All because receivables closed 41.7% up to top liquidity pressure alongside 16.9% rise in prepayments and 5.82% build up of inventories.
In the end, the score card was certainly not pleasant. Loss recorded on each N100 income leapt to N18.2 compared to only N0.45 by September 2014.
SO:
* The struggle continues to come up with a year when because of efforts that counted, all ended well
* Most certainly, Vono Products PLC could do with more products with higher margins or volume sales.

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