FULL YEAR RESULTS: RED STAR EXPRESS, TRIPPLE GEE PLC


RED STAR EXPRESS PLC: 2016'S RED ALERT

If nothing else, the financial year to March 2016 issued a red alert of sorts to Red Star Express plc which if not noted could negatively affect the immediate future.

According to the figures for the year released recently, both total core revenue dropped marginally although the main good news from the year also emerged therefrom: That cost of sale that generated the income dropped at a slightly faster rate.

Core revenue had decreased by 0.38% to N6633.0m, while total income went down by  0.84%  to N6656.6m as both other operating income and finance income recorded 60.7% and 43.8% drops respectively.

However, cost of sale decreased by 0.97% to N4674.5m thus engendering 1.05% increase in gross profit to N1958.5m.

This foundation was not strong enough though, because administration and marketing expenses increased, not decreased, by 2.57% to N1399.3m.

Hence, even though finance cost went down by 37.6% to N10.8m, the alert from exceptional growth in overheads came in the form of 6.73% decrease in profit before tax to N572.1m

That meant gain on every N100 income of N8.59 down significantly on N9.11 gain in 2015 year.

It was a mild alert though since overheards are controllable and, besides, Red Star Express ended the year more liquid than it started it with working capital surplus of N1442.9m as against N1179.3m previously.

RED STAR EXPRESS PLC Nm
                                                      2016                   2015
Total revenue                               6656.6                6712.9
Core revenue                                6633.0                6658.5
Cost of sale                                  4674.5                 4720.3
Gross profit                                  1958.5                 1938.2
Other operating income                   16.2                    41.2
Administration etc                        1399.3                 1364.2
Finance income                                7.42                      13.2
Finance cost                                   10.8                        17.3
Profit before tax                           572.1                      611.1
Profit margin %                              8.59                       9.11
Working capital                           1442.9                 1179.3


TRIPPLE GEE PLC: LOST ADVANTAGE.

It is rare kind of to see the cost of producing goods sold increasing at a far lower pace that that recorded in income generated from the goods sold. When it occurs, it provides good foundation for good profit. Like for Red Star Express, not so for Tripple Gee plc in the financial year to March 2016.

According to the full year results released recently, both total and core income managed to top up by 3.7% (total income to N806.6m) and 3.77% to N806.4m, in the case of core income.

The greater pleasant surprise was that cost of sale increased by only 0.09% to N556.7m thus allowing 13.1% increase in gross profit to be recorded.

No doubt, this was a good advantage but it was soon lost as distribution and administration cost closed the year 38.2% up at N139m; as finance cost increased by 17.4% to N73.6m.

Sure, loss on investment within the year narrowed by 93.5% to N0.46m, the pressure from cost growth was already too much especially when this was supported by 66.7% decrease in income from other sources.

Hence, though Tripple Gee did not find itself in the loss league, its profit before tax dropped by 31.5% to N36.9m leading to 4.57 % profit margin compared to 6.93 % in 2015 financial year.

TRIPPLE GEE PLC: Nm
                                                    2016                              2015
Total income                               806.6                             777.8
Core revenue                               806.4                             777.1
Cost of sale                                  556.7                             556.1
Gross profit                                  249.8                             220.9
Other operating income                  0.20                              0.60
Investment income                         -                                   0.082
Loss on investment                       0.46                                7.04
Distribution etc                            139.0                             100.6
Profit before tax                             36.9                              53.9
Profit margin %                            4.57                              6.93
Working capital                          345.4                            303.4

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