Secure Electronic Company formerly National Sports Lottery released its Q3 2012 unaudited accounts with revenues climbing 32.5%year on year to N3.3billion. However, gross profit dropped about 24% to N192.9million representing a margin of about 5.9%. The company’s direct cost of N3.1b representing a 39% gulped more than 95% of revenue helping reducing their operating profit to just under N22million. The company has in the past attributed its dwindling fortunes to increase competition from non-lottery based companies like GSM and CDMA operators, however it seems that their inability to control direct cost may well be their achilles heel. The company still have a fairly balanced capital structure with interest gulping about N85b this quarter.The company must then find ways to imporve efficiency if it is to remain viable in the future and close the year with a positive bottom line. Another worrisome indicator is their liquidity considering that they are a lottery company. Operating cash flows are negative and available cash is just under N90million. The company is on the ropes.
Secure Electronic Technology Plc Q3 2012 unaudited results is posted on the website of the NSE.