FAIR START FOR AVON CROWN CAPS

For Avon Crown Caps PLC, there has been a fair start for the current financial year given what figures for the quarter to December 2015 show.
According to the figures released last week, this was principally because as core revenue increased by a fairly impressive 20%, accompanying cost of sale dived by 59.7%.
Core revenue closed the first quarter at N3832.7m, well ahead of the N3194.4m reported in the first quarter of the previous year.
This became a very pleasant development because direct cost of producing the goods sold, dropped to N1099.5m significantly lower than N2728.1m deployed to generate the lower previous first quarter sale.
Then income from other sources offered icing on the cake by closing at N9.17m as against just N40,000 previously.
Unfortunately, the miracle did not extend to overheads control as this cost head increased ahead of core revenue growth though below overall income growth of 23.4%.
Overhead costs increased by 21.6% to N314.5m from N258.7m.
Then financial charges attempted to hold back the train by closing the quarter at N313.8m up 82.1% on N172.3m previously.
This was absorbed effectively for quarter end good start in the form of N114.1m profit before tax more than triple the N35.4m recorded by December 2014.
Hopefully too put alongside full year figures for the previous year, the chances are that Avon Crown Caps PLC may only have scratched the surface of possibilities, all things being equal.
HENCE:
* Someone must notice that all things were not equal with the company's liquidity position within the quarter. It grew far worse and demands new strategies.
* Overheads are still far more controllable although present day Nigerian environment hints otherwise.

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