These are not the best of times for Chams Nigeria Plc as shares of the Information and Communication Technology company repeatedly tumbled on the Nigerian Stock Exchange (NSE), despite recording impressive financial performance in the first three months of the year.
After posting a 53 percent increase in bottom line in the first quarter of 2019 on Friday, May 3, the stock rallied to a five-year high of 53 kobo on May 7. However, Chams reversed the gains thereafter by falling consistently for four straight sessions to close at 36 kobo on Monday.
As a result of the bearish performance which worsened with a 10 percent depreciation on Monday, over N798 million has so far been wiped off Chams’ market value at the Lagos bourse, shaving its return since the start of the year to 80 percent.
Chams Consortium Ltd, a subsidiary of Chams Nigeria Plc, had recently accused MasterCard of breach of contract over a national identity card project where it invested $100 million.
In a statement issued on May 2, 2019 by the chairman of the company, Demola Aladekomo, the firm sought the federal government’s intervention over the matter in order to persuade MasterCard to accept wrongdoing, apologise for the breach of contract and pay $100 million compensation to Chams Consortium Ltd for accumulated losses over the project.
It is therefore unclear if shareholders of Chams Plc were reacting negatively to the dispute between its subsidiary and MasterCard as attempts to reach Chams Plc to speak on the matter proved abortive.
Chams Plc grew sales by 70.4 percent to N1.26 billion in the first quarter of 2019 compared with N739 million recorded in the corresponding period of 2018, making the ICT firm record a gross profit of N410 million from N324 million.
Administrative expenses rose by 17 percent in the review period to N245.6 million, but that was not enough to deplete its operating profit which increased to N183 million from N129.6 million.
Consequently, pre-tax profit surged 41.2 percent to N182.9 million from N129.5 million, while lower tax expense resulted to N182.8 million after-tax profit for the company between January and March, 2019.
Total assets of Chams improved to N6.11 billion with declined liabilities, making its shareholders’ funds to grow by more than double to N1.95 billion as at the end of March 2019 compared with N704 million achieved in the same period a year ago.
Chams Plc offers smartcard technologies. It also offers a public access retail billing and collection system with internet access. Chams was incorporated on September 10, 1985 and listed on the NSE in 2008.
OLUWASEGUN OLAKOYENIKAN
