Berger Paints Nigeria Plc gained momentum as the company recorded a 50.02 percent increase in net income amid rising inflation, infrastructure bottlenecks, multiple taxation, weak consumers spending and a high interest rate environment.
Berger Paints has been recording growth at the top and bottom line level since 2013, the best results among peers, data gathered by BusinessDay shows.
For the first six months through June 2015, Berger Paints net income was N161.37 million, from N107.43 the same period of the corresponding year (H1) 2014.
Sales increased by 15.53 percent to N1.41 billion as the company continues to pursue aggressive expansion with a view to increasing market share as it opened a new Color World Centre in Lekki, a city on the island in the country’s most populous state Lagos.
Earnings per share EPS were up by 51.35 percent to 56k in 2015 as against 37k the preceding year. Net margin, a measure of profitability and efficiency jumped to 11.42 in the period under review
The Nigeria painter said its ability to produce quality products with a view to meeting consumer needs and maximizing the value of shareholders, is responsible for its growth trajectory.
The company said in a recent release that its strong board and management who have assiduously pursued the corporate governance code also helped bolster performance.
While most companies in Africa largest oil producer are struggling with the tough operating environment, Berger Paints was able to reduce cost of sales by 1.67 percent to N664.53 million in the period under review.
Cost of sales ratio jumped to 47.05 percent in 2015, from 55.04 percent in 2014. This means the company is spending less to produce each unit of product.
Gross profits were up 35.03 percent to N747.63 million which means the Paint maker is efficient in managing direct costs directly attributable to projects. Gross profit margin moved to 46.37 percent in the period under review as against 45.05 percent last year.
Industry analysts following Berger Paints financial statement in last three years said the company’s right issue, raised with a view to financing the modernization of its manufacturing operations has improved efficiency and has impacted positively on profitability and turnover.
The company will outperform peer rivals as it plans to become the first paint company in West Africa to automate its factory. This means the company is unrelenting in minimizing costs and maximizing the value of shareholders.
Berger Paints total assets increased by 10.71 percent to N4.03 billion in June 2015, from N3.64 billion the preceding year. Shareholder’s fund grew by 6.93 percent to N2.62 billion in 2015 as against N2.45 billion last year.
Currency ratio, which measures the ability of a firm in meeting short term obligations as at when due was 1.72x, which is near the 2.1x industry average.
Berger Paints has utilized the resources of shareholders in generating higher profit as return on equity (ROE) increased to 6.51 percent in 2015 compared with 4.37 percent as at June 2014.
The company’s share price closed at N9.97 on the4 floor of the exchange while market capitali8zation was N2.85 billion.
BALA AUGIE
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