Livestock feeds H1 profit up 32 percent as sales climb
Livestock feeds Plc, a Nigeria company that manufactures and markets animal feeds posted a 32 percent increase in half year profits as sales climbed.
For the first six months of the year, the company’s revenue rose by 24 percent to N3.35 billion from N2.70 billion in the same period of the corresponding year (HY) 2013.
The impressive top line performance was translated to bottom growth as profit before tax surged by 32 percent to N125.60 million in HY 2014 compared to N95.21 million as at HY 2013.
It should be noted that the company has been recording stellar performance since December last year. Based on BusinessDay analysis of firms in the Agric sector, Livestock feeds is the best performer.
The company is poised to improve performance as it is focusing on improving its brand, product expansion, increased production capacity and cheaper cost of funds.
Furthermore, in order to boost its revenue base and reduce business risk through a well diversified portfolio, the company is poised to launch its own brand of fish feed which is positioned to be the fish farmers choice across the country.
In addition, the feed industry had been projected to grow by 20 percent with greater contribution from the fish and aquaculture sector, adjudged as one of the fastest growing sectors in 2013.
Gross margins were up by 12.83 percent in FY 2014 from 11.19 percent in 2013, while net margin, a measure of profitability and efficiency remained flat at 25.75 percent in the period under review.
Operating expenses were up by 25.14 percent to N205.88 million in HY 2014 as against N164.52 million as at HY 2013, operating margin remained flat at 6 percent.
Total assets for the first six months through June 2014 increased by 14 percent to N3.67 billion from N3.23 billion as at HY 2013, while shareholders fund rose by 12 percent to N1.58 billion.
Return on average equity ROaE and the return on average assets ROaA in the period under review were 2.32 percent and 4.87 percent respectively.
Current ratio, which measures the ability of a firm to meet its short term obligation, was 1.54 xs lower than the 2.1x industrial average.
Livestock Feeds was established in 1963, by Pfizer as a subsidiary to the pharmaceutical business that had been introduced to Nigeria few years earlier.
The company’s share price closed at N3.05 July 18 2014 on the floor of the Nigeria Stock exchange, while market capitalization was N6.10 billion.