NINE MONTHS RESULTS: HOPE RISING FOR ELLAH LAKES.

If figures for the third quarter buried in the nine months results of Ellah Lakes are anything to go by, there is hope that one day the company will break the yolk of annual loss.
According to the nine months figures, what is easily discernible is the reduction in Ellah Lakes PLCs loss margin to 36.8% from 38.4% in nine months to April 2016.
This occurred even as revenue growth of 17.8% to N43.6m was accompanied by 21.2% increase in cost of generating it to N29.2m.
Not that impressive, especially when later 11.8% increase in overheads to N30.4m depressed loss to N16m as against N14.2m previously.
But the figures for the quarter to April give a different picture altogether. It indicates better control of costs in that quarter that led to reduction, not increase, in the quarter's loss to N6.59m from N7.27m previously.
This was because in the quarter, revenue actually dropped by 3.29% to N14.7m but first, direct cost dropped faster at 13% to N12m and overheads grew by only 7.14% compared to the 11.8% growth for the full nine months.
Ellah Lakes still has a long way to go though before it can break the surface. Aside from the grip on costs that will need to be firmer, liquidity challenge remains. By April, this too eased a little but N2663.5m deficit still looks a very high mountain for a company still battling to scale one billion in revenue.

ELLAH LAKES Nm
                   Nine months
                      2016.           2015
Revenue.       43.6.             37.0
Cost of sale  29.2.             24.1
Gross profit  14.4.              12.9
Overheads    30.4.              27.2
Profit b4 tax (16.0).           (14.2)
Profit margin (36.8).         (38.4)
Working capital (2663.5) (2666.6)

       THREE MONTHS TO APRIL
Revenue.         14.7.            15.2
Cost of sale    12.0.             13.8
Gross profit      2.70.            1.41
Overheads.      9.30.             8.68
Profit b4 tax   (6.59).          (7.27)

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