COURTVILLE BUSINESS SOLUTIONS: SOLUTION RETHINK

For Courtville Business Solutions PLC (CBS) the lone guarantee of avoiding a repeat of tough 2015 year in the current financial year is a rethink of internal solutions.
According to the 2015 audited results released recently, something has to be done to cage growth in finance costs, cost of solutions offered clients and operations cost.
They combined to  drive CBS profit before tax down by 59.6% to N184.4m from N457.0m after the company recorded 10% increase in core revenue to N1486m from N1350.9m.
The top punch was from growth in interest paid closing the year at N155.1m representing 176% rise on 2014's N56.2m.
It could have even been worse though because forward looking ensured CBS purchased more plant and equipment within the year with closing value rising by 13.4% to N1521.1m from N1341.2m even as external borrowing was reduced by 16.4% to N367.8m from N440.4m.
This was made possible at no higher cost of funds because N179.7m was in escrow as tax deducted at source, prepayments dropped by 70.7% and closing cash eased to N102.1m from N114.6m.
Additional pressure on profitability came from the 35.9% topping of operations costs to N601.3m from N442.6m, 14.2% increase in cost of sale to N600.8m from N526.3m and 59.2% decrease in income from other sources to N52.4m from N128.5m.
Thus, CBS gain on each N100 income tumbled to N12 in 2015 from 2014's N30.8m.
SO:
* Even though working capital recovered to N73,000 from 2014 deficit of N24.9m, it is obvious this is temporary because the tax deducted at source has to be remitted and 139.4% rise in trade payable to N39.5m will have to be attended to too
* Of course, more cost control can not fail to deliver good dividend in 2016.