Chams Plc, a Lagos-based information and communication technology company, gained the most among traded equities on the floor of the Nigerian Stock Exchange (NSE) on Wednesday, marking an end to its five-day bear run.
The stock appreciated by 9.09 percent to close at 36 kobo, its biggest gain since the release of its financial results for the first quarter of this year. This placed the stock above 10 other stocks that rose in value at the Lagos bourse.
BusinessDay had reported the bearish performance in the company’s stock despite an impressive outing in the first quarter (Q1) of 2019. The bear run had triggered Chams Plc’s dividend yield from 6 percent to 9 percent.
Turnover of the ICT firm stood at N208.7 million in the first quarter of the year, this represents a percentage increase when compared with N206.5 million achieved in the corresponding quarter a year earlier.
The company’s pre-tax earnings jumped 108 percent to N11.44 million from N5.54 million as the firm’s zero income tax expense for the period bolstered its net income by 125 percent to N11.44 million compared with N5.1 million recorded in Q1 2018.
Total assets of Chams Plc fell by 8.96 percent to N5.34 billion. However, the company cut its liabilities by a wider margin of 36 percent to N1.6 billion, propping up its shareholder’s fund by 11.7 percent to N3.74 billion from N3.35 billion a year earlier.
Chams Plc was more profitable in the period as its net income margin soared from 2.5 percent in Q1 2018 to 5.5 percent in the first three months of this year.
A further analysis reveals that the company’s management was efficient at using its assets to generate earnings as return on assets, which stood at 0.09 percent as at end-March 2018, surged to 0.21 percent at the end of the first quarter of 2019.
Similarly, the company was able better utilise the equity investments of its shareholders to generate income as return on equity rose to 0.31 percent in the first three months of 2019 from 0.15 percent in the same period a year earlier.
In a statement filed at the NSE on Wednesday, Chams Plc clarified that Chams Group was not listed on the Nigerian Stock Exchange (NSE). This indicates that while Chams Group recorded a negative retained earnings of N1.76 billion as at end-March 2019, Chams Plc recorded N397 million positive retained earnings in the review period.
Chams Plc was incorporated as a limited liability Company on September 10, 1985, and became a public company on September 4, 2008. It was listed on the floor of the NSE on September 8, 2008. The firm offers services which include identity management, payment collections and transactional systems.