7up plc just released its 2014 FY results showing revenue grew 21.5% to N77.8billion compared to N64billion posted in 2013. Profit after tax rose 125% to N6.4billion compared to N2.8billion posted a year earlier.
- Cost of sales rose by 20% YoY however, the rise in revenue did enough to cushion that effect. This helped gross profit margin to remain within the range of 36% for the year (35% 2013)
- Operating expenses also rose 11.3% to N19.3billion compared to N17billion declared in 2013. This increase though higher than the 5% increase between 2013 and 2012 the increase in revenue did enough to also cushion this effect. In fact, operating expenses as a %age of Gross profit was 68% compared to 76% in 2013. This here was the secret for the increase in bottom line
- Operating profit will thus rise by a whopping 66% the beginning of what was to be a massive increase in profits
- 7up appears to have repaid its debt reducing it from N19billion to N4billion. This brought down debt cost by 33% to N1.5billion
- The increase in revenue and reduction in debt propelled the company into the N6.4billion profits.
- Return on equity of 43% and Return on Asset of 17% is a blast for me any day.