Red Star Express Plc held its annual general meeting (AGM) on Thursday September 12 where its board of directors got the shareholders’ approval to pay recommended dividend of 27kobo per share.
At the meeting, the Suleiman Barau-led board of directors of Red Star Express Plc, among other businesses of the day presented before members of the company, the audited financial statements for the year ended March 31, 2024 together with the report of the directors, auditors and statutory audit committee there on.
The financial scorecard
Red Star Express Plc 2024 annual report and accounts show that the group revenue grew by 16.1 percent to N16.127billion from N13.874billion in 2023. Also, the group’s gross profit printed higher at N4.468billion from N3.814billion in 2023. Profit Before Tax (PBT) was down by 8.6 percent to N542.146million from N593.415million in 2023, while profit for the year stood higher at N343.003million from a 2023 low of N313.900million, representing an increase by 9.6 percent.
CEO speaks…
Auwalu Badamasi Babura, group managing director/Chief Executive Officer, Red Star Express Plc said at the shareholders meeting that despite challenging environment, “Red Star Express has demonstrated resilience and growth.”
“The past year brought notable challenges to the transport and logistics sector. According to the National Bureau of Statistics (NBS), the real GDP growth for the transport and storage sector plummeted to -50.64 percent for the year ended March 31, 2024, a dramatic decline from the 51.66 percent growth recorded in 2023.
“This sharp downturn highlights the severe impact of economic volatility on our industry. Additionally, the growth in postal and courier services sector slowed to 2.39 percent in 2024 from 4.91 percent in the previous year, while the transport services sector also saw a decrease, with growth at 3.36 percent compared to 4.90percent in 2023. These figures underscore the need for strategic adaptation and resilience in our operations to navigate these challenging conditions,” the CEO told shareholders.
He noted that despite the challenging environment, “Our revenue for the financial year reached N16.1 billion, a substantial increase from N13.8 billion in the previous year, reflecting a growth of 16.1percent. Our Profit After Tax (PAT) rose to N343 million from N313 million, marking a 9.6 percent increase. Additionally, Earnings per Share (EPS) improved to 36 kobo per 50 kobo share, up 33 kobo in the previous year. These results are a testament to our successful expansion efforts and robust operational strategies.”
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According to him, “This financial year has been a period of significant achievements for Red Star Express and its subsidiaries. As part of the giant stride we recorded in the financial year, we secured a certificate of registration as agents of foreign airlines, and we also obtained a recruiter’s licence, further strengthening our service portfolios.
“These advancements have enhanced our capacity to expand our service offerings. Our strategic partnership with FedEx continues to strengthen our international presence. Additionally, the operational launch of our new warehouse facility at Murtala Mohammed Airport in Lagos marks a major milestone in our infrastructure expansion”.
“We have also successfully extended our e-commerce logistics services to new regions, further improving our market reach and operational efficiency. Our strategic focus will continue to emphasize enhancing brand management and optimising logistics operations.
“We are committed to scaling our e-commerce logistics capabilities and integrating technology-driven solutions to better serve our customers. We will explore new partnerships and business opportunities within domestic and regional markets to diversify our revenue streams and mitigate risks associated with economic volatility”, Babura added.
The company’s dividend of 27 kobo per share (2023: 20 kobo) amounts to a total dividend of N257.69 million (2023: N190.88 million). The dividend, less withholding tax was paid on September 12 to shareholders whose names appeared on the Register of Members as of Friday August 23, 2024.
Red Star Express has three (3) wholly owned subsidiaries; Red Star Logistics Limited, Red Star Freight Limited and Red Star Support Services Limited. The results of the Company’s subsidiaries were consolidated in the group’s financial statements. The Group is principally engaged in the provision of courier services, mail management services, freight services, logistics, ware housing and general haulage.
A look into the company’s future…
For Red Star Express, its future prospect is set to be robust, “driven by our commitment to leveraging on advanced technology.” It aims to improve operational efficiency, expand market reach, and provide innovative solutions that meet the evolving needs of its customers.
For instance, Red Star Express is introducing a new technology-driven e-logistics service, aiming to revolutionise its logistics operations and enhance its service delivery.
“As we look ahead to the new financial year, we are excited about several strategic initiatives that position us for sustainable growth and enhanced service delivery. These include: The adoption of cutting-edge e-logistics technology to streamline our operations and improve efficiency,” the CEO told shareholders on Thursday September 12. He further noted that Red Star Express will rapidly expand its service offerings to enable its consumers get greater choice and value; and explore more strategic growth opportunities. The company also plans massive investment in talent and technology; while building on its warehousing capabilities; and strengthening its domestic and international partnerships.
The Annual General Meeting was streamed live via the company’s website to enable shareholders and other stakeholders who were unable to attend physically to participate in the proceedings.
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 had its shares listed on the Nigerian Exchange Limited (then Nigerian Stock Exchange) on November 14, 2007.
Share price nears 52-week high
At N3.85 per share it closed on Wednesday September 11, Red Star Express Plc share price nears its 52-week high of N4.54 as against 52-week low of N2.65. Red Star Express Plc is listed on the mainboard of the Nigerian Exchange Limited (NGX). It has shares outstanding of 954,423,326 units. The company is listed on the Courier/Freight/Delivery subsector of the NGX services sectors.
Shareholders with more than 5 percent holding
Analysis of Red Star Express Plc shareholding shows the shareholders that have more than 5 percent holding. They are: Koguna, Mohammed Hassan (186,863,273 units or 19.58 percent), Koguna Babura Insurance Brokers Limited (145,547,447 units or 15.25 percent), Petra Properties Limited (96,419,958 units or 10.10 percent), Suleiman Barau (79,656,679 units or 8.35 percent), and Apel Capital & Trust Limited (Nominees) (70,000,000 units or 7.33 percent).
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Last 7 Days Trades
Independent auditor’s reassurance
“In our opinion, the accompanying consolidated and separate financial statements give a true and fair view of the consolidated and separate financial position of the Company and its subsidiaries as at March 31, 2024, and of its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards) and in the manner required by the Companies and Allied Matters Act (CAMA), 2020 and the Financial Reporting Council of Nigeria (Amendment) Act, 2023,” according to KPMG Professional Services in their independent auditor’s report.
“The Group generates revenue majorly from the following key activities – provision of courier services, freight services, logistics, mail management services, warehousing, and general haulage services while the Company generates revenue mainly from courier services,” they auditors further noted.
“Based on the procedures performed and evidence obtained, nothing has come to our attention to cause us to believe that the Group’s internal control over financial reporting as of March 31, 2024 is not effective, in all material respects, in accordance with the COSO Framework and the Securities and Exchange Commission Guidance on Implementation of Sections 60 – 63 of Investments and Securities Act 2007,” KPMG Professional Services also said in the independent auditor’s limited assurance report.
Leveraging strengths of subsidiaries to meet clients demands
Red Star Express Plc seeks to further meet its clients’ demands and ever-changing needs by setting up subsidiaries to handle the peculiarity of each segment of the market. The subsidiaries are: (i) Red Star Freight –
This is a subsidiary with competencies in Air and Sea Freight of Heavyweight Cargo, Container Handling, Packing, Movements and Removal of Personal Effects, Clearing and Forwarding, Door-to-Door Pickup and Delivery Service; to and from various local and international offices/depots of our clients. Other services include General cargo sales agents for airlines, agro trade services and last-mile delivery for agro produce nationwide. Red Star Freight is a member of the International Freight Logistic Network (IFNL) thereby having access to over 160 countries and expertise of over 180,000 professionals.
Another subsidiary is Red Star Logistics: This is the ground haulage delivery service division. It consists of Haulage of Domestic Heavyweights, Trucking, Cargo Consolidation, Ancillary and Warehousing Services. With a fleet of heavy-duty trucks delivering shipments across Nigeria, this subsidiary provides manufacturers with better logistics integration and speed to market. Other services include home/office relocation and cold chain logistics for temperature-controlled goods.
The third subsidiary is: Red Star Support Services – which provides outsourcing services to companies in various sectors of the economy. The service involves the provision of dedicated personnel and material resources for the day-to-day running of their customers’ operations. Offerings include Mailroom Management, Dedicated Dispatch, Executive Drivers, Fleet Management, HR Outsourcing, Printing and Packaging and Food Delivery Services.
