FULL YEAR RESULTS (1) ALUMINIUM EXTRUSION Nice try McNICHOLS Fair year but...

ALUMINUM EXTRUSION IND PLC.
NICE TRY

Aluminum Extrusion Industries PLC tried its very best to end 2015 financial year gloriously but it could not. In fact aside from very marginal profit growth from double digit revenue increase, profit attributable to shareholders dried up because the tax man, this time, took his share.
According to the audited figures released earlier, in 2014 there was a tax rebate of about N51.2m which swelled distributable profit to N170.1m from N118.9m profit before tax.
On the other hand, in 2015, distributable profit came to only N83m from N120.4m profit before tax because N37.5m was provided for as tax payable.
Before the tax impact, the main battle Aluminum Extrusion lost was with cost of sale. To generate 31.8% rise on core revenue to N2501.4m cost of sale increased by 36.4% to N2167.7m and that made gross profit to grow by only 8.44% to N333.7m.
Others then played supporting roles starting with 7.2% drop in Other income to N1.16m; 26.1% increase in administration expenses to N83m and 13% increase in selling expenses to N35.7m.
The 16.2% decrease in finance cost to N38.8m helped a lot but to no avail partly too, because there was higher depreciation provision.
In the end, Aluminum Extrusion settled for only 1.26% rise in profit before tax (PBT) to N120.4m before the taxman share was provided for.
However, it did win a very important battle over liquidity pressures. Its working capital closed at N68.3m compared to N19.7m previously as trade receivables dived to N8.54m, Cash on hand came to N14.8m as against N1.42m previously despite 28.8% increase in inventories to N475.1m and 30.8% drop in payables to N124.6m.

ALUMINIUM EXTRUSION PLC (Nm)
                          2015.            2014
Total income  2502.56.       1898.45
Core revenue  2501.4.         1897.2
Cost of sale.   2167.7.         1589.6
Gross Profit.     333.7.           307.7
Other income      1.16.             1.25
Personnel.          50.6.             42.7
Selling cost         35.7.            31.6
Administration.   83.0.            65.8
Finance cost.       38.8.           46.3
Profit before tax 120.4.         118.9
Profit margin %     4.81.           6.26
Working capital.   68.3.          19.7
Inventories.         475.1.          368.8
Receivables.          8.54.           76.6
Cash                      14.8.             1.42
Payables.             124.6.          180.1

McNICHOLS CONSOLIDATED PLC
FAIR YEAR BUT....

McNICHOLS Consolidated PLC apparently had more opportunities to sell its products in 2015 but there was a snag: Cost of producing the same goods for sale had virtually gone out of hand.
According to the 2015 audited figures released recently, McNICHOLS ended the year with N65.3,m as profit before tax, up 43.8% on 2014 level except that this was from total and core revenue that almost doubled to N1013.08m and N1009.8m respectively.
The problem was that cost of sale more than doubled ( up 115.6% to N811.1m)  thus leaving little room for 37.3% decrease in finance charges and 160.3% rise in pint sized other operating income to have much impact.
Thus, in spite of the opportunities the year offered, the company ended with 6.45% profit margin compared to 8.7% in 2014.
But the resultant 48.8% increase in profit after tax to N60.3m was impressive enough in the eyes of directors and so, for the second year running they recommended dividend and bonus issue of one for ten.
There is not likely to be much sweat over cash to pay the dividend because unlike 2014 when year end working capital was N7.1m  deficit and only N14.6m cash in the till, by 2015 working capital was N18.4m surplus and N35.4m cash was on hand.

McNICHOLS CONSOLIDATED PLC
                           2015.           2014
Total income   1013.08.        521.06
Core revenue.  1009.8.          519.8
Cost of sale       811.1.          376.2
Operating cost  131.3.            90.7
Other Income      3.28.             1.26
Finance cost.      5.42.             8.64
Profit before tax 65.3.            45.4
Profit after tax    60.3.            40.5
Working capital. 18.4.            (7.1)
Cash.                   35.4.           14.6
Profit margin %  6.45.             8.70

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