TheCitizen - It's all about you
  • Home
  • Headlines
  • Latest News
  • Governance
  • Business
  • Financial Crimes
  • Opinion
  • Editorials
No Result
View All Result
  • Home
  • Headlines
  • Latest News
  • Governance
  • Business
  • Financial Crimes
  • Opinion
  • Editorials
No Result
View All Result
TheCitizen - It's all about you
No Result
View All Result

CAP: Earnings expected to maintain stable growth

The Citizen by The Citizen
May 2, 2014
in Company Review, Uncategorized
A A
0
22
SHARES
734
VIEWS
Share on FacebookShare on Twitter

Chemical and Allied Products (CAP) is expected to maintain stable earnings growth records in the 2014 financial year. Sales revenue and profit are expected to keep a balanced growth with a good chance for a slight gain in profit margin. This is the trend the chemical and paints manufacturing company has maintained for the past several years, which by its first quarter result, has defined the earnings outlook for the current year.

At the end of the first quarter, sales revenue was up by 19.7% to N1.75 billion from the corresponding figure last year. Based on the growth rate in the first quarter, the company is expected to close the year with a turnover of N7.52 billion in 2014. This will be an increase of 21.5% over the full year revenue figure in 2013.

The company had grown sales revenue by 18.4% to N6.19 billion in 2013. Revenue growth has been stable for the company over the past several years at an annual average of 19.6% in the past five years. This is an indication of ability to defend market share in a highly competitive market place.

In addition to accelerating revenue, there is a strong growth also in other operating income, which rose by 27.6% to N14.47 billion in the first quarter. This is an accelerating growth compared to the improvement of 14% in other operating income in the 2013 full year. Finance income is also showing an improving performance at an increase of 13% in the first quarter compared to a decline in the 2013 full year.

The company posted an after tax profit of N402.52 million at the end of the first quarter, which represents an increase of 30.4% from the corresponding quarter in 2013. Based on the growth rate in the first quarter, full year net profit is projected at N1.74 billion for CAP in 2014. This will amount to an increase of 22.5% over the net profit figure in the preceding year.

After tax profit grew virtually at par with sales revenue at 18.3% to N1.42 billion in 2013. A step up in the growth rate is therefore likely for the company in the current year. The company has grown after tax profit continually in the past five years though at fluctuating rates. On the average, after tax profit has grown well ahead of turnover in the past five years at 50.8%.

In the current year, profit is also growing ahead of revenue, which is indicating greater cost management effectiveness by the company. The ability to convert revenue into profit has increased in the current financial year. There is an improvement in net profit margin from 21.1% in the corresponding quarter last year to 23% at the end of the first quarter. This is virtually at par with the net profit margin the company recorded at the end of the 2013 financial year.

The gain in profit margin is coming from a moderation of cost of sales, which increased by 9.7% to N842.59 million compared with the growth of 19.7% in sales revenue. The proportion of revenue claimed by cost of sales went down from 52.6% in the first quarter of last year to 48.2% in the current year. This enabled gross profit margin to grow well ahead of sales revenue at 31% to N904.55 million in the first quarter.

Selling and distribution expenses are growing far ahead of sales revenue, indicating that greater effort is being made to achieve the improving sales figure. Selling and distribution cost grew more than twice as fast as sales revenue at 46% to N131.06 million in the first quarter. This is a reversal of last year’s position when selling and distribution expenses grew by 11% against the 18.4% growth in sales revenue. Administrative expenses are also growing slightly ahead of turnover at 21.3% to N235.77 million.

The company’s balance sheet is entirely free of interest bearing debts and there is therefore no interest expenses at all. This has helped the company to defend its profit margin in the present situation where high interest charges are eroding profit margins of many companies.

At the end of the first quarter, inventories declined by 20.5% to N459.51 million over the December 2013 level but trade debtors and other receivables rose by 158.8% to N1.34 billion. The high growth in receivables is suggesting that about one-half of the sales made in the first quarter happened on credit. The company is clearly relying on credit inducement to push sales. This has affected cash flow with cash and bank balances declining by 5.4% to N1.38 billion during the same period. Trade and other payables increased only slightly at 3.7% to N735.52 million.

The changes in the balance sheet resulted in cash flow difficulties for the company in the first quarter. Operating activities used a net cash of N108.70 million in the first quarter against a net cash of N1.45 billion generated in the 2013 full year. Despite a huge drop, interest income continued to keep net cash flow from investing activities positive and there were no movement at all in respect of financing activities. The absence of cash flow pressure from investing and financing activities enabled the company to manage the drop in cash flow from operating activities during the period.

The company earned 58 kobo per share in the first quarter, improving from 55 kobo in the corresponding quarter in 2013. Based on the projected profit for the company at full year, earnings per share is expected to come to N2.48 for CAP in 2014. This will be an increase from the N2.02 per share the company earned in 2013. This will be a major improvement after a slowdown in earnings per share in 2013, which was induced by a bonus of one for four paid within the year.

Share9Tweet6Share2
Previous Post

As DISCOs take full charge… – Leadership

Next Post

NLC expounds on delay in payment of Rivers teachers’ salaries

Related Posts

Gov. Adeleke freezes Osun govt accounts, reverses state name, makes key appointments
Company Review

Osun tribunal: Aide denies Adeleke certificate forgery

February 1, 2023
DSS denies Nnamdi Kanu’s maltreatment in detention
Latest News

Ohanaeze, Afenifere, MBF, others, knock FG for dragging Kanu to Supreme Court

October 22, 2022
Ortom makes a U-turn, orders closure of churches, mosques
State of the States

Gov. Ortom sacks 8 commissioners

January 5, 2022
South-East: I do not favour zoning for 2023 Presidency, says Fayemi
Latest News

State governors consider dialogue with bandits, others

February 24, 2021
$9.6bn judgement: UK court issues timetable for hearing FG suit against P&ID
Headlines

Fed Govt puts up recovered assets for sale, invites bids

February 3, 2021
FG, ASUU in talks today over strike
Latest News

SSANU, NASU begin strike Monday, ASUU continues industrial action

October 3, 2020
Next Post

NLC expounds on delay in payment of Rivers teachers’ salaries

FG sets November deadline for unified payroll system for federal varsities

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

FROM THE GRASSROOTS

Anambra records more killings as hoodlums gun down six cops, driver

Anambra communal clash claims 5 lives

by admin
February 6, 2023
0

...

Rousing the electorate from apathy – Vanguard

Elder statesman, Idatto Uzairue village Monarch-in-Waiting, Mallam Jibril Adamu Oshonebo, cautions politicians against heating up polity

by admin
January 28, 2023
0

...

AUN matriculates new students for Spring 2023 semester

AUN matriculates new students for Spring 2023 semester

by admin
January 27, 2023
0

...

CIVIC calls for probe into deadly airstrike in Nasarawa State

CIVIC calls for probe into deadly airstrike in Nasarawa State

by admin
January 27, 2023
0

...

ODDITIES

Time to clampdown on sexual offenders – The Guardian

Father defiles 10-year-old daughter in Lagos

by admin
February 7, 2023
0

Nigerian kills compatriot in South Africa

Hoodlum stabs funeral guest for dating ex-wife

by admin
January 27, 2023
0

Why I married my daughter’s boyfriend – Kano woman

Why I married my daughter’s boyfriend – Kano woman

by admin
January 25, 2023
0

State of the States

2023: If 4 governors & I quit PDP, party won’t win – Wike

Wike donates N70m to families of slain, injured police officers

by admin
February 7, 2023
0

...

2023: Gov. Ugwuanyi won’t tamper with zoning arrangement in Enugu State — Aide

Gov. Ugwuanyi to meet Enugu-born inventor of battery-powered cooking stoves

by admin
February 6, 2023
0

...

Akeredolu brokers peace in Ondo community after 4-year crisis

Allow states to determine workers’ salaries, control resources, pay taxes to FG – Akeredolu advises

by admin
February 2, 2023
0

...

Edo PDP suspends Obaseki, Shaibu’s loyalists

Edo strengthens delivery of primary healthcare, to upgrade 55 PHCs

by admin
January 29, 2023
0

...

  • Trending
  • Comments
  • Latest
UK licenses 266 Nigerian doctors in two months

UK licenses 266 Nigerian doctors in two months

August 3, 2022
Military will not rest until Book Haram is annihilated, says Army Chief

Shake-up in army

January 8, 2023
May Edochie finally speaks about husband’s second wife

I will not be cajoled into accepting polygamy, says May Edochie

December 24, 2022
Why I didn’t remarry — Patience Ozokwo

Why I didn’t remarry — Patience Ozokwo

January 20, 2023

Air Peace begins operations, offers airfare to Armed Forces personnel

170

Diezani breaks silence, reveals side of story in 3-part exclusive interview

26

FG’s N4trn contractual debts under Jonathan – National Mirror

21

2015: Washington Post condemns Jonathan for campaign slogan

20
Governors endorse CBN proposal for states to access N15tr infrastructure fund

CBN will provide required cash for INEC election expenses – Emefiele

February 7, 2023
Politicians paying Labour party officials millions to defect from party, says Utomi

Politicians paying Labour party officials millions to defect from party, says Utomi

February 7, 2023
Wike accuses Ayu of lying, plot to blackmail G-5 Governors

Wike accuses Ayu of lying, plot to blackmail G-5 Governors

February 7, 2023
Reforms: Court adjournments, delays should attract stricter sanctions – Osinbajo

2023 elections: Nigerians will hold leaders accountable at ballot, says Osinbajo

February 7, 2023

GLOBAL NEWS

Premier League clubs press to kick out Man City over alleged financial breaches

Turkey declares three months’ state of emergency in earthquake zones

by admin
February 7, 2023
0

...

Death toll rises to 1,800 in Turkey, Syria earthquake

Death toll rises to 1,800 in Turkey, Syria earthquake

by admin
February 6, 2023
0

...

US shooting down spy balloon damages relations, says China

US shooting down spy balloon damages relations, says China

by admin
February 6, 2023
0

...

Powerful 7.8 earthquake strikes Turkey, Syria, kills hundreds

Powerful 7.8 earthquake strikes Turkey, Syria, kills hundreds

by admin
February 6, 2023
0

...

Pope receives Merkel on farewell visit to Rome

Pope Mass in South Sudan: Pontiff urges people to reject ‘venom of hatred’

by The Citizen
February 5, 2023
0

...

EDITORIAL REVIEW

Flood warning: Prepare for the worst – Punch

Flood warning: Prepare for the worst – Punch

by admin
February 7, 2023
0

Insecurity: Aggrieved APC senators move to join opposition lawmakers’ plot to impeach Buhari

Corruption waxing stronger under Buhari – Punch

by admin
February 6, 2023
0

Avoidable deaths from container-laden trucks – Punch

Avoidable deaths from container-laden trucks – Punch

by admin
February 2, 2023
0

COVID-19: Security operatives foil attempted jailbreak in Kaduna

Governors should act on death row inmates – Punch

by admin
February 1, 2023
0

Electoral Act Amendment bill: Senators threaten to override Buhari as governors back President

State assemblies right to reject LG autonomy – Punch

by The Citizen
January 31, 2023
0

Opinion

Naira redesign: Emefiele working for public good

Naira redesign: Emefiele working for public good

by admin
February 7, 2023
0

...

Rousing the electorate from apathy – Vanguard

Lux Tera: Catalyzing responsible leadership and informed citizenship 

by admin
February 6, 2023
0

...

Russia bans Facebook, Instagram platforms

Social media and solutions to political apathy

by admin
February 2, 2023
0

...

Understanding the Sheriff Oborevwori brand

Understanding the Sheriff Oborevwori brand

by admin
January 25, 2023
0

...

  • UK licenses 266 Nigerian doctors in two months

    UK licenses 266 Nigerian doctors in two months

    113 shares
    Share 45 Tweet 28
  • Shake-up in army

    59 shares
    Share 24 Tweet 15
  • I will not be cajoled into accepting polygamy, says May Edochie

    51 shares
    Share 20 Tweet 13
  • Why I didn’t remarry — Patience Ozokwo

    47 shares
    Share 19 Tweet 12
  • NNPC slashes petrol price for marketers to ease scarcity

    40 shares
    Share 16 Tweet 10
  • Home
  • Headlines
  • Latest News
  • Governance
  • Business
  • Financial Crimes
  • Opinion
  • Editorials

© 2022 TheCitizen Ng. All Rights Reserved.

No Result
View All Result
  • Home
  • Headlines
  • Latest News
  • Governance
  • Business
  • Financial Crimes
  • Opinion
  • Editorials

© 2022 TheCitizen Ng. All Rights Reserved.