In its financial year ended March 31, 2023, Nigeria’s foremost logistics enterprise, Red Star Express Plc reported 250 percent rise in after tax profit and 43.4percent increase in turnover.
Its annual reports and financial statements for the review year showed the Group’s revenue grew to N13.87 billion from N12.59billion in 2022, while Profit After Tax (PAT) for the year was reported at N313.9 million as against previous year’s N87.80million, up by over 250percent.
Red Star provides a portfolio of logistics solutions which includes domestic and international deliveries, freight forwarding, integrated warehousing and haulage services, information and document management, e-Commerce order fulfilment services.
The financial year 2022/2023 presented Red Star Express with a challenging operating environment, influenced by several significant economic factors in Nigeria. These included the impact of the preparation for elections, challenges posed by Naira redesign and ensuing scarcity, and a steep increase in inflation.
During the period under review, Red Star Express Plc recorded Profit Before Tax (PBT) increase to N593 million. This represents a growth of 43.4percent when compared to N413 million recorded in the preceding year.
This remarkable growth was primarily driven by increased business activities and successful business expansion initiatives, including its collaboration with new domestic airlines and the expansion of the e-commerce logistics services.
The company’s basic Earnings Per Share (EPS) stood at 33 kobo per 50 kobo share, showing over 100percent increase compared to the preceding year. The N2.91 per share which Red Star closed on the Nigerian Exchange Limited (NGX) as at Wednesday October 11 implies positive return of 28.8percent year-to-date (YtD).
The board of directors of the company at its annual general meeting held on September 14, 2023 got shareholders’ approval to pay a dividend of 20kobo per share (2022: 7.5kobo) less Withholding Tax.
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The dividends were paid electronically on September 15 to shareholders whose names appeared on the register of members as at Friday August 18, who completed the e-dividend registration and mandated the Registrars to pay dividends directly into their designated bank accounts.
Looking at deeper into the annual report, it shows the shareholders that have more than 5percent holding as follows: Koguna, Mohammed Hassan (19.58percent), Koguna Babura Insurance Brokers Limited (15.25percent), Petra Properties Limited (10.10percent), Suleiman Barau (8.35percent), and Apel Capital & Trust Limited {Nominees} (7.33percent).
“The Company has always prioritised the creation of shareholder wealth and have maintained a steadfast commitment to rewarding our valued investors,” said Suleiman Barau, chairman, Red Star Express Plc.
Red Star Express remains the flagship, in the pick-up and delivery of express documents and parcels within the domestic and international market. It is the sole licensee of FedEx Corporation in Nigeria.
Red Star Express Plc was incorporated as a Private Limited Company on July 10, 1992 under the name, Red Star Express Nigeria Limited and commenced business operations on October 12, 1992.
The Company was subsequently converted to a Public Company in July 2007 and on November 14, 2007 its shares were listed on the Nigerian Stock Exchange (now Nigerian Exchange Limited). Red Star Express Plc has three (3) wholly owned subsidiaries; Red Star Logistics Limited, Red Star Freight Limited and Red Star Support Services Limited.
Total assets base grew from about N7.7 billion to over N8.65 billion in the current period. This reflects the strategic intent of the company in steady investment in technology and investing in tangible assets that will ensure future growth.
The increase in total asset base is also a strong demonstration of shareholder confidence in the company and its preparedness to withstand any turbulence in the economy, given the socio-economic challenges at the global and local levels.
“As we look ahead to the new financial year, we hold a positive outlook for our company amidst the stabilisation of the Nigerian economy. We welcome the market principles being adopted by the new government. With the removal of subsidies from petroleum products, improved foreign exchange dynamics, and efforts to control inflation, we anticipate a more stable and predictable business environment that will facilitate better performance and growth opportunities.
“Nevertheless, we are not oblivious to the challenges that may arise due to the opportunities presented by the ever-changing socio-economic dynamics, both domestically and globally. However, the board and management of our company remain optimistic, having strategically invested in various initiatives to strengthen our position in the market,” Barau said.
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While expressing the company’s unwavering commitment to delivering robust and sustainable performance, ensuring maximum returns for shareholders, even in the face of economic challenges, the chairman further said: “Our recent business expansion initiatives, such as the construction of a world-class warehouse facility at the Murtala Mohammed Airport in Lagos, demonstrate our commitment to enhancing our operational capabilities and meeting the evolving needs of our customers. Moreover, we have embraced technology as a driver of efficiency and competitiveness, positioning ourselves to adapt to the fast-changing business landscape”.
“In line with our growth strategy, we are resolute in continuously delivering strong and sustainable performance to maximize returns for our esteemed shareholders. Our businesses have been repositioned to capitalize on key opportunities, and we remain firmly committed to staying the course in executing our growth plan,” Barau said.
Auwalu Babura, group managing director/CEO, Red Star Express also restated the company’s readiness to leverage opportunities in the logistics and supply chain arena.
He noted that the company is poised to take advantage of the opportunities in the logistics and supply chain market going forward, adding that Red Star Express will continuously pursue opportunities in Warehousing, Logistics, Digital and Mobile Commerce while deepening its brand presence and relationship with partners in the traditional courier, express and parcel segments of the industry.
“The continuous and relentless pursuit of efficiency whilst engaging in our core business activities remains our strategic focus at this time and beyond. Red Star Express will focus on four important areas namely: service delivery, brand management, business expansion and development and leveraging on technology.
“The company has implemented a strategic approach to cost optimisation, particularly in response to the volatile increase in foreign exchange rates impacting our international transactions with FedEx,” Babura noted.
He said that Red Star Express has now shifted to remitting funds in the local currency, naira, adding that “This proactive measure aims to mitigate the effects of exchange rate fluctuations, providing us with greater stability and relief from currency-related pressures. This strategic decision reflects our commitment to prudent financial management and reinforces our ability to navigate challenging economic conditions with resilience and confidence. The company remains a customer led organisation”.
“We will continue to optimise our operations and cost management with the goal of improving our customers and consumers experience from the first and to the last mile. The coming year will also see a review and audit of our product lines with the aim of increasing profitability through aggressive marketing support and business expansion into new markets. We will also be innovation driven through the continuous scale of our investments in technology, business process re-engineering and innovative logistics solutions,” added the group managing director/CEO.
As the company strives to be the most value driven logistics company in Nigeria, the last quarter results showed a substantial investment in technology, innovation and other operational assets.
One of the areas of development for Red Star has been in its growing and empowering of small and medium enterprises (SMEs) which it began since 2018. It has since been enhanced over the last three years and it now empowers farmers and agro entrepreneurs through various mentorship processes and close guidance.
Red Star also made heavy investments in trucks/cold store storage for transporting perishable farm produce and for providing indispensable cold storage facilities to pharmaceuticals and makers of other goods that require strict temperature control. Its investment in the e-commerce sector has also grown as this is considered important for driving growth.
