As at close of trading yesterday, Courteville remained at a regulator floor price of 50kobo per share. It has remained in this price since at least the beginning of this year and doesn’t appear to be going up going by its latest results. The best bet would have been to go right down but since the NSE places a floor of 50kobo as the lowest share price can drop, your best bet is that it will remain at 50 kobo.
This doesn’t come as a surprise as investors do not see any value from this company based on current results and intelligence. The company did not propose any dividends in its 2014 FY results even though it spent about N1billion building a new head office. Earnings per share growth has also remained flat at under 9 kobo since 2013. Their latest 2015 Q1 result was 2.29 kobo suggesting an annualized EPS of 9kobo per share. Cash in the bank is also small and shrinking due to negative working capital.
Revenue growth has also dropped to single digits from its high of 24% in 2012 and 22% in 2013 (both figures year on year). The prospects for revenue growth is as unclear as it is for profits and investors don’t like that. The company currently relies on Hackney Permits commission business with little or no growth showing up in their e-commerce segment. Maybe, the new APC Government may help the company increase revenues as State Government will likely rely on aggressive revenue mobilization schemes to improve their fiscal situation.
But that is still a long shot and purely speculative at the moment. Whilst we wait, expenses continue to shoot up.The company saw expenses rise 38% in 2015 Q1 mostly due to deprecation charge doubling to N44million for the quarter. In fact, they restated their PP&E classifications moving N287million out of Building to computer equipment, Furniture and fitting, Elevators and Office Equipment. The impact of this is that depreciation charge will increase in the short term due to the shorter lifespans of the assets (not building).
For now, the share price remains stubbornly at 50kobo per share and we do not expect any change in the near term. People who own shares in this company and have been trying to sell it haven’t had much luck either. No one is willing to buy as perhaps without dividend there is no value.
Disclosure – Nairametrics and the author of this article owns shares in Courteville Business Solutions and does not plan to buy shares in Courteville Business Solutions in the next one week. The author of this article wrote it themselves, and did not write this article on behalf of Courteville Business Solutions , its associates or representatives. The article is purely their opinion.