PRESCO PLC'S HEAD ABOVE WATERS

Recession? Well even in war time, there are companies that thrive and so Presco PLC is one company with head above today's turbulent waters in Nigeria.

According to the nine months unaudited results released recently, core revenue grew at 48.4% to N11937.5m accompanied by a heartwarming 3.43% rise in cost of sale to N29460m.

This gave birth to 73% increase in gross profit to N8991.5m with which to absorb blows from cost pressure.

Yet it turned out that real pressure came only from 86.9% growth in distribution expenses to N166.7m although 36.7% decrease in other operating income to N78.4m tried to dampen vision.

There was 35.1% increase in administration expenses to N2240m but this was not threatening since it was well behind both core revenue and gross profit growth.

But more cheery news was to come. First gain on fair value for Presco PLC's biological assets rose by a handsome 97.6% to N4408.5m. This was paper profit no doubt, but it came as icing on good operating profit.

Then due to improved liquidity position, financial charges dipped by 27.3% to N422.8m.

In the end, in spite of the recession and more importantly, in spite of N933.7m in foreign exchange related loss, Presco ended September with N9714.7m profit before tax; up 105.2%.

Naturally, this led to far more solid profit margin (59.1%) and above one billion in working capital surplus as against N413.1m deficit at the same time in 2015,

PRESCO PLC: Nm Nine months.
                         2016.          2015
Total income 16424.4.    10399.4
Core revenue 11937.5.      8044.4
Cost of sale    2946.0.       2848.2
Gross profit.   8991.5.       5196.2
Admin. Cost  2240.6.       1657.9
Distribution     166.7.           89.2
Other op exp.    78.4.         123.8
Bio assets gain 4408.5.  2231.2
Fx gain.             (933.7).  (487.2)
Profit b4 tax     9714.7.   4735.3
Working capital 1355.3.  (413.1)
Profit margin %    59.1.     45.5

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