TRANSCORP HOTELS 2015 COMFORT ZONE

The business of selling comfort to customers was relatively tough for Transcorp Hotels PLC in 2015 but the company had its own comfort zone from which to scale through with flying flags.
According to the audited figures released earlier this month, group core business revenue dropped 7.45% to N13979.3m from N15104.8m but the first stage of its comfort zone composition was 114.2% rise in finance income to N594.8m from N277.7m.
This was made possible greatly by N2410m deposit for shares by shareholders.
Even though the 4.09% decrease in cost of goods sold to N3362m from N3505.4m did not match the core revenue drop, Transcorp Hotels firm hold over administration costs then sealed the year's happy ending.
Administration expenses decreased by 20.5% to N5943.2m compared to N7476.6m in 2014.
Hence even before the growth in finance income was taken into account, 8.21% decrease in gross profit to N10647.4m had been reversed to 12.2% rise in operating profit to N4783.2m from N4262.3m.
In the end, leap in finance income ensured a closing 18.5% uplift in profit before tax to N5378m from 2014's N4540m.
Thus, with the eventual drop in total income coming to about 5.16% to N14721.2m from N15522m, the company's gain on N100 income climbed to N36.5 from N29.2m.
Meaning that Transcorp Hotels proposed 40.85kobo dividend for the year was not only more than earned, its liquidity position was strong enough to make for payment from its own comfort zone.
SO:
* Given 2015 performance, the main art Transcorp Hotels has to perfect is how to link direct cost more directly to revenue downward swing.
* Of course, it has to be acknowledged too that 2015 recorded a huge decrease in earnings from foreign exchange while offering comfort to foreign visitors continue to be part of its core business.

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