BERGER PAINTS' 2015 BRIGHT COLOURS

Paint manufacturer, Berger Paints PLC  ended the year 2015 in bright and shinning colours so much so that tough 2015 turned out to be a myth of sorts.
According to the audited figures published recently, everything worked out in Berger Paints favour within the year with the lone exception of core revenue that dropped very marginally.
Core revenue from paint manufacture decreased by 1.97% to N3022.3m from N3082.9m but not to worry, the good news started flowing almost immediately.
First, non- core revenue growth reversed that for 1.31% increase in total income from N3239.6m estimated by Henates for 2014 to N3282.2m.
Next, cost of producing the paints sold decreased at a faster rate. It dropped by 5.32% to N1643.7m from N1736.1m thus ensuring a 2.35% increase in gross profit.
More shots in the arm were on the way too. Income from other sources increased by 20.4% to N95.1m from N79m and finance income more than doubled ( up 133%) to N144m compared to N61.8m previously.
To cap these, Berger Paints performed surgery on administration costs driving it 27% down to N682.7m from N938.2m.
Hence, as selling and distribution cost jumped by 71.8% to N380.3m from N221.4m it was more like a mosquito bite.
Boosted further by the 37.3% decrease in finance charges within the year to N49.5m from N79m, Berger Paints thus ended 2015 in colours that were almost too bright for the times.
Its profit before tax doubled to N565.2% from N249.3m ( up 126.7% actually) while its gain on each N100 income closed at N17.2 compared to 2014's N7.70.
There was some strain on liquidity within the year though but, again, it was for a good course. Berger Paints invested more in fixed assets with closing value up 19% at N1046.3m from N879m and this impacted on liquidity.
Other liquidity pressures surfaced through leap in prepayments to N770.9m from N125.6m and reduction in long term borrowing by 67.2% to N3.77m.
This decreased working capital surplus to N1024.6m from N1259.2m with some help from 86.5% drop in deposits for imports and more than doubled short term borrowing.
SO:
* Cleaning up the liquidity tight space may help Berger Paints in 2016
* Of course, this will be while retaining 2015 grip on costs and bringing selling and distribution expenses within site.

BERGER PAINTS PLC.(Nm)
                          2015.              2014
Total Revenue  3282.2.          3239.6
Core   Revenue  3022.3.         3082.9
Cost of sale.      1643.7.         1736.1
Gross profit        1378.6.         1346.9
Other income.       95.1.             79.0
Selling & Distr.    380.3.            221.4
Administration.   682.7.           938.2
Operating profit.  470.7.           266.8
Finance income   144.0.             61.8
Finance cost.         49.5.             79.0
Profit before tax   565.2.           249.3
Profit after tax.     330.3.          148.8
Profit margin %      17.2.             7.70

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