R.T. Briscoe, the pioneer dealer of Toyota automobiles, suffered a loss of N618.9 million in the first half of 2020. The loss increased by 84%, when compared to the corresponding period in 2019.
This was disclosed in the company’s H1 2020 published by the Nigerian Stock Exchange (NSE).
According to the report, the decline in revenue negatively impacted the company’s bottom line. Briscoe for the first half of this year reported N2.42 billion as revenue, which is 21% lower when compared with a revenue of N3.07 billion in H1 2019.
- Revenue decreased by 21%
- Cost of sales decreased by 19%
- Net finance costs increased by 27%
- Loss increased by 84%
Facts behind the loss
A careful review of the results revealed that the decline in revenue, which aggravated the loss, is attributable to the 30.2% decline in revenue from the sales of Motor Vehicles, and the 33.5% decline in revenue from Aftersales services and parts.
In the light of the figures contained in the reports, Nairametrics found that the sales of Toyota & Ford Vehicles declined in the first six months of 2020.
On the flip side, revenue from other segments such as; Industrial equipment, and Property development & facility management increased, compared with the corresponding period in 2019.
Other downward pressures on profitability
The company’s hunt for profit for the first half of this year was eroded by Selling and distribution expenses of N6.95 million, and Administrative expenses of N542.2 million. These expenses eroded the gross profit of N473.93 million to the tune of N38.8 million operating loss, which was compounded by a N580.14 million Net finance cost.
Key issues facing the auto dealer
R.T. Briscoe has a total current assets value of N2.33 billion and current liabilities value of N17.69 billion, as the auto dealer maintains a massive working capital deficit of N15.36billion, driven by bank overdraft worth N15.86billion.
The bank overdraft of N15.86billion in the company’s book represents 89.7% of the total liabilities of the company, and this casts shadows on the going concern of the auto dealer, given the penalty charges from banks and court litigations from creditors.
As a result of the sustained losses incurred over the years, the shareholders’ fund has been completely eroded, to the tune of N10.12billion deficit, for the group as of 30th June 2020.
Cutix Plc forecasts N148 million profit in Q4 2021
Cutix Plc has projected that its revenue will double and profit will increase by 9% to N148 million.
Cutix Plc has projected that in the fourth quarter of its financial year 2021, its revenue will double and profit will increase by 9% to N148 million.
These projections were made by the company in a recent earnings forecast issued by the Management, and signed by the Company’s CEO and CFO.
Key highlights of the earnings forecast for Q4 ended April 30, 2021
- Revenue to increase to N1.66billion, 100% Q-o-Q.
- Cost of Sales to increase to N1.16 billion, 70% Q-o-Q.
- Distribution, Admin & Other expenses to increase to N232.89 million, 14%% Q-o-Q.
- Other Income to remain unchanged at N2.50 million,
- Finance Charges to increase slightly to N47.38 million, 3% Q-o-Q.
- Operating income to increase to N227.83 million, 14% Q-o-Q.
- Taxation is projected at N79.74 million.
- While Profit attributable shareholders is projected at N148.10 million.
The earnings forecast was made on the ground that the Nigerian economy will continue improve, as the country recovers from the impact of COVID-19. In this regard, revenue in the fourth quarter of 2021 will be slightly higher than the revenue projected in the third quarter of 2021.
However, the increase in the cost of sales driven by the input cost will pressure profitability to the tune of N148.10 million, which is 9% higher than the profit after tax made in the corresponding quarter of 2020.
Vitafoam shares gain 9.6%, as company reports N4.11 billion as profit in 2020
Vitafoam Nigeria Plc profit revealed 72.10% increase when compared with the N2.39 billion reported in the corresponding period of 2019.
Vitafoam Nigeria Plc has reported in its audited financial statement for 2020 that it made a profit of N4.11billion for the year ended 30 September 2020.
This represents a 72.10% increase in profit when compared with the N2.39billion profit reported in the corresponding period of 2019.
- Revenue increased to N23.44 billion in 2020, 5.21% Y-O-Y.
- Cost of Sales decreased to N12.43 billion in 2020, 8.06% Y-O-Y.
- Gross Profit increased to N11.01 billion in 2020, 25.68% Y-O-Y.
- Other income increased to N638.97 million in 2020, 63.91% Y-O-Y.
- Distribution costs increased to N1.05 billion in 2020, 8.13% Y-O-Y.
- Administrative expenses increased to N4.13 billion in 2020, 10.57% Y-O-Y.
- Operating profit increased to N6.47 billion in 2020, 45.58% Y-O-Y.
- Finance income increased to N106.51 million in 2020, 5.39% Y-O-Y.
- Finance Costs decreased to N930.17 million in 2020, 11.39% Y-O-Y.
- Profit from continuing operations increased to N3.92 billion in 2020, 58.88% Y-O-Y.
- Profit from discontinued operations increased to N191.63 million in 2020, 345.68% Y-O-Y.
- Profit for the year increased to N4.11 billion in 2020, 72.10% Y-O-Y.
What you should know
- Shares of the company have gained 9.6% within the first one hour of trading, largely at the backdrop of news of the company’s impressive performance as the current valuation of the company in the light of its results suggests that the shares of the Company are undervalued at the current price.
- Checks by Nairametrics as of 11:10 am today confirmed that the company is on a full bid, as 4,930,245 bids from 23 investors have been placed at the highest price for the day, without a single offer at a price lower than N8.55.
The profitability of the company was beefed up in 2020 on the back of the decrease in the cost of raw materials coupled with the increase in sales from the core segment of the company which led to the 5.21% increase in revenue in 2020.
However, it is important to note that the impressive performance of the Vitafoam Group was also strengthened by the increase in other profit owing to improvement in sales, this helped the company to also grow its revenue from services provided to customers’ after-sales.
Neimeth posts profit of N212.48 million for year-ended September 2020
Neimeth profit declined by 3.48%, as profitability was pressured by rising costs and expenses in 2020.
Neimeth Pharmaceuticals Plc has reported in its audited financial statement for 2020 that it made a profit of N212.48 million for the year ended 30th September 2020.
This represents a 3.48% decline in profit when compared with the N220.15 million PAT reported in the corresponding period of 2019.
- Revenue increased to N2.84 billion in 2020, 19.73% Y-O-Y.
- Cost of Sales increased to N1.33 billion in 2020, 13.11% Y-O-Y.
- Gross Profit increased to N1.51 billion in 2020, 26.23% Y-O-Y.
- Other income increased to N29.29 million in 2020, 1049.33% Y-O-Y.
- Marketing and distribution expenses increased to N505.11 million in 2020, 33.90% Y-O-Y.
- Administrative expenses increased to N452.28 million in 2020, 20.54% Y-O-Y.
- Exchange loss increased to N188.05 million in 2020, 479.25% Y-O-Y.
- Operating profit decreased to N393.26 million in 2020, -4.87% Y-O-Y.
- Finance costs decreased to N95.87 million in 2020, -12.00% Y-O-Y.
- Profit after tax decreased to N212.48 in 2020, -3.48% Y-O-Y.
The report revealed that despite the impressive performance of the core operating segment of the company, and the increase in the revenue generated from the Animal Health segment, the profit of Neimeth Pharmaceuticals was pressured by rising costs in 2020 and this led to 3.48% decline in profit year-on-year.
Neimeth Pharmaceuticals suffered from substantial cost and expenses increase in 2020, as the increase in production cost, marketing and distribution expenses (driven by increased payment to employees in this department), administrative expenses (driven by expenses paid for conference and meetings, bank charges and commission, communication and subscription, energy cost, insurance and medical expenses) and increase in foreign exchange loss driven by naira devaluation, pressured profitability in 2020.