Shareholders of Red Star Express Plc now have a course to smile given the stellar performance the Lagos-based cargo-generating and logistics company delivered in the three months through June 2019.
The company’s net income rebounded by some 21 percent, the highest profit growth since 2012, to N131.4 million in first quarter (April-June), after dipping 7 percent last year.
At its recently-held 26th Annual General Meeting (AGM) which held in Lagos, shareholders approved a final dividend of 43 kobo per share equivalent to N253 million pay-out. Also, directors’ fees were pegged at N5.37 million for the period ending March 31, 2020.
Among the resolutions passed at the AGM were plans to institute an Employee Equity Benefit Scheme for Executive Directors, in which the board have been empowered to allot such number of shares from the unissued shares of the company to the scheme.
The surge in proceeds from freight and logistic segments gave turnover a single-digit boost of seven percent in the review period. Turnover grew to N2.52 billion in the review quarter from N2.35 billion a year before.
While cash realized from freight and logistic grew in excess of 20 percent, the company’s business pillar, courier, up some 9 percent to N1.4 billion from N1.29 billion reported last year.
In spite the upward trend in production, operating and borrowing costs, and even tax expense, Red Star Express Plc saw a slight improvement in profitability.
This was evidenced by 58 basis points increase in net margin to 5.3 percent and N4 jump in earnings per share.
The company, in a bid to expand operations across West Africa, ventured into cargo General Sales Agent Services (GSA) about two months ago. A move it says would help connect passenger baggage and packages from an airport to another at faster rate.
Its managing director, Sola Obabori said sometimes in June, that part of the company’s targets in the current financial year is to partner operating airlines locally and internationally to strengthen its cargo services.
As at June 30, 2019 total assets of Red Star Express Plc is valued at N5.53 billion, with trade receivables accounting for some.
A dive into its books revealed the company is owed N2.3 billion by debtors, in which N203 million are classified as doubtful.
Total liabilities in the review period stood at N2.63 billion with about half of the figure being short-term obligations to creditors.
Red Star Express Plc provides air express, transportation, warehousing and other supply management services. Shares of the company traded last at N4.76 on the Nigerian Stock Exchange (NSE).
It has returned some 13 percent gain to investors since January outperforming the equity benchmark gauge that has lost 12 percent.
Recall in November 2018, the logistic firm widened presence to Burkina Faso via Red Star Burkina Faso Office, to carry out pick-up and delivery of time-sensitive and time-definite shipments within the West African nation.
Israel Odubola
