Courteville Business Solution Plc was on the floor of Nigerian Stock Exchange a few days ago promoting its facts behind the figure presentation. Typically, when companies do that it is an opportunity for them to showcase to investors the company’s prospects and how they intend to translate that into significant creation of shareholder value now or in the near future.
Looking at the presentation uploaded on the website of the NSE, the presentation looks like it is nothing to write home about. The bungled up presentation included a few slides that were ineligible to read and contained little details about the company’s business.
But that aside, there were more questions to be asked that answered after reading that presentation. Why did Courteville decline to pay dividends in 2014? Why did they acquire an asset in Jamaica? Why are they even expanding to more African States when they haven’t conquered their home country? Why is profitability growth stalling and why is cash flow not as robust as one should associate with tech companies? Where do they see their share price heading to by the end of the year? Are they happy to see it remain at 50 kobo per share?
We have written severally about this company and will not like to belabour the issue. Courteville in our opinion is failing to create shareholder value and as it is there is no clear plan to achieve that. The company is still profitable but can’t continue to be at a profit level of under N400m. The Board and Management of the company need to recapitalise and reinvest in its current infrastructure if it desires to capture the whole of Sub-Saharan Africa and the Caribbean’s as a business solutions company. Revenues are growing at double digits but not fast and large enough to create any significant impact. The company also has to consider adopting a B2B model rather than rely mostly on Government for business.
Our outlook for Courteville remains bearish and will SELL if the opportunity arises.
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.
