Chams Plc hit an all-time low in yesterday’s trading session on the Nigerian Stock Exchange. The stock opened at N0.22 and closed at a 5 year low of N0.20. Year to date, the stock is down 60%.
About the firm
Chams Plc was incorporated as a private limited liability company on September 10, 1985, and became a public limited liability company in 2007. The company’s name was changed from Chams Nigeria Plc to Chams Plc.
The company has three subsidiaries: Cardcentre Nigeria Limited, which is engaged in the production and manufacturing of cards, ChamsAccess which is involved in the deployment of ATMs in the country, as well as multi platform terminals, and ChamsSwitch which is engaged in the provision of e payment transaction platforms.
Crawling from a hole
Results for the nine months ended September 30, 2018 show that revenue increased from N1.4 billion in 2017 to N2.1 billion in 2018. The firm made a profit before tax of N178 million in 2018, as against a loss before tax of N161 million incurred in 2017. Profit after tax also stood at N151 million, as against a loss after tax of N161 million recorded in 2017.
Investors expecting a dividend may have to wait a while, due to the company’s negative retained earnings of N7.5 billion. Companies are barred from paying dividends while they have negative retained earnings.
Where the company stumbled
The company’s struggles are largely due to the cancellation of a concession agreement to produce National ID cards. The company raised N9.2 billion (comprising N8.4 billion from a public offer and N800 million internally), which it spent on equipment and four digital cities.
The contract was revoked by the National Identity Management Commission (NIMC) and handed to several other firms.