KENYA'S EVEREADY (EA) PLC: NO SO EVER READY

In the financial year to September 30 2017, Kenya's Eveready East Africa PLC was not quite ready for what the election year had to offer in Kenya but it did make one crucial move: It sold a major asset to stay afloat.

According to the audited figures released this week by board Chair, Mrs Lucy Waithaka, the year was tough what with uncertainties of the elections; weaker credit growth and drought in Kenya.

So much so that Eveready's income from core business declined by 38.7% to Ksh 338.9m from Ksh 553.3m in 2016 year. 

Even though cost of sale dropped at a faster 40.8% to Ksh 251.6m leading to only 31.9% decline in gross profit to Ksh 87.3m, growing overhead by 11.3% to Ksh 330.46m, was more than enough to land the company in loss league.

That was despite the handy 917% growth in other income to Ksh 49.5m and drop in finance cost by 86.5% to Ksh 9.736m.

That it instead reported profit before tax of Ksh 249.1m as against Ksh 218.96m loss previously was mainly because the sale of a landed property resulting in Ksh 452.46m profit thus beefing total income to Ksh 840.9m, up 50.7%.

Of course, this helped greatly not in keeping the bottom line healthy, but also in resolving the company's hitherto very tight liquidity position. Its working capital that was in the red to the tune of Ksh 320.8m by 2016 year close, now ended with Ksh 363.4m surplus amidst reduction of borrowings by 99% to Ksh 4.5m from Ksh 443.2m 

But one thing is sure, should the previous year illwind continue as opposition leader declaring himself president seems to hint at, then Eveready needs to really do more work to be ready this time. After all, the same asset can not be sold again.

Mrs Waithaka says Eveready is up to the task ahead and is already trying its best to boost sales and core bottom line. In particular, hope is strong that portable power solution launched about three months into the year, will wax stronger and contribute more to core sales.

For now, awash with cash, the directors are recommending Ksh 1 per share dividend for the year.

EVEREADY (E.A) PLC: Full year, Ksh000.
                                  2017.         2016
Total income          840945.    558183
Core revenue.         338931.    553311
Cost of sale.           252610.    425016
Gross profit.             87321.     128295
Other income.          49546.         4872
Sale of property.    452468.        ----
Impairment reversed  ----            17021
Overhead.               330465       296782
Finance cost              9736.         72368
Profit before tax.   249134.    (218962)
Working capital.    363425.    (320828)
Cash                        245827.          3744

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