AFROMEDIA PLC: BOTTOM AT LAST

Has Afromedia PLC , the Nigerian outdoor advertising quoted company, hit the bottom at last and so, can now begin to recover?
According to latest audited and unaudited figures downloaded from their site, the answer could be yes after a very poor finish in financial year to September 2015.
Or at least, so the figures for the first quarter to December 2015 do indicate even if it comes as a tiny ray of light.
No doubt stakeholders of Afromedia could do with any thing that could raise their hopes about the company. In the year to September 2015 things ended to badly that loss before tax reported not only increased to N2745.3m from N1705.7m but it meant that shareholders fund ended at minus N4260.6m almost fourfold the deficit of N1506.8m in previous year.
In more graphic terms it meant the company ended the year losing N627.2 on each N100 income earned compared to N499.6 loss previously.
It got that bad because total income grew by 26.3% to N431.6m from N341.3m while all costs, with the curious exception of finance charges, increased at higher percentage rates.
Cost of sale grew by 84.2% to N806.8m from N437.9m and total overhead rose by 58.4% to N1708.1m from N1078.6m.
This was at a time core income actually increased by only 19.4% to N407.3m from N341m.
Financial charges on the other hand increased by 24.7% to N661.8m from N530.7m.
Of course the 2015 year figures were depressing but not to worry, the first quarter figures indicate there is a turn around in the offing.
In the first place core revenue for the quarter increased by 9.21% to N111.5m. The good news was that this was accompanied by only 6.82% rise in cost of sale and more importantly by 29.7% drop in overhead to N94.6m from N134.6m.
Finance charges this time around rose by 21.9% to N186m.
But the point was made, management is taking better charge of costs Thus loss on each N100 income dropped to N269.6 compared to N284.5 at the same time previously.
SO:
* There is still a long way to go but if the grip on costs can be sustained, there should be light at the end of the long tunnel.
* Perhaps it may be time to inject a new blood into Afromedia because  the top directors have been around since 1999. Good for stability but never too good for thinking out of the box.

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