INTERLINKED TECHNOLOGIES PLC'S PROFIT PANACEA

There is only one sure horse move that could make Interlinked Technologies PLC not end the year to June with loss: Cut administration expenses.

According to the interim results to December released not too long ago, this move should have been resorted to early in the year but it is not yet too late.

From the six months figures, revenue took a major dive by 35% to N46.9m but this ended with 9.47% rise in gross profit to N18.5m all because accompanying cost of sale went down much faster, by 53% to N26.4m.

That was a nice one but it turned soar as administration expenses grew by 57.7% to N17.5m thus leading assault on the bottom line aided a little bit by 26.2% increase in distribution cost to N0.82m.

With finance cost chipping in N3.05m, up 32.6%, Interlinked Technologies PLC landed in N2.85m loss compared to N2.89m profit at the same time in June 2016 year.

This translated into N8.21 loss on each N100 income as against N4 gain previously.

Oh sure, administration cost is the most controllable of all costs and so it can be done especially with the company's good liquidity management amidst loss that resulted in working capital increase to N264.7m and leap in cash on hand by 423% to N15.9m.

INTERLINKED TECHNOLOGIES: Nm
                         Half year.
                         Dec 2016.    Dec 2015
Revenue             46.9.              72.2
Cost of sale       26.4.              56.2
Gross profit.      18.5.               16.9
Distribution.        0.82.              0.65
Administration.  17.5.             11.1
Finance cost.      3.05.              2.30
Profit b4 tax.     (2.85).             2.89
Profit margin % (8.21).            4.0
Working capital 264.7.           262.8
Cash.                     15.9.              3.04

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