Greif: A refurbished container | Independent Newspapers Limited
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Greif: A refurbished container

Posted: Apr 24, 2015 at 12:33 am   /   by   /   comments (0)

By Andy Nssien


Grief Nigeria Plc, formerly known as Van Leer Containers (Nigeria) Plc is involved in manufacturing and production of metal drums and plastic containers. It produces sheet metal product and stainless steel shape. The company also provides services such as punching and aluminum welding.  Listed on the first tier market of The Nigerian Stock Exchange, it has a market capitalization of N489,507,200.00.

The company’s results for the  period ended October 31, 2014 indicated a revenue of N787.5 million which slipped by one per cent from N795.2 million achieved in the corresponding period in 2013. Profit before tax rose by 11 per cent to N58 million from N52.5 million, while total comprehensive income jumped by 42 per cent to N43.3 million from N30.6 million earned in a similar period in the previous year.

Earnings per share was good, rising by 42 per cent to 102k from 72k, while net asset per share grew by 6 per cent to 790k from 749k realized in 2013. Shareholders have cause to smile as the Board of Directors of the company have recommended  a dividend of 60k per share which is subject to approval at the annual general meeting slated for April 28, this year.

It is noteworthy that the company  clamped down on cost of certain expenditure items such as repairs and maintenance, as well as other operating expenses which have helped to reduce the total general and administrative expenses. However, an item, auditor’s remuneration which shot up by 70 per cent to N5,250,000 is at variance with this trend.

Although, the cost of publicity at N130,000 was a 67 per cent reduction from N395,000 spent in 2013, the increase by 18.5 per cent of representation expenses to N3,607,000 further put pressure on the total selling and marketing cost, all of which had a telling effect on the operating profit.

Gross profit margin slipped to 17.5 per cent in 2014 from 17.8 per cent recorded  in the corresponding period in 2013, while net profit margin rose to 5.5 per cent from 3.8 per cent of the previous year.

However, this positive showing was not re-assuring in the company’s first quarter unaudited report for the period ended January 31, 2015 recently released. Although, revenue inched up by one per cent to N187 million in the first quarter from N185.7 million registered in the corresponding period in  2014, profit before tax dipped by 25 per cent to N8.6 million  from N11.6 million entered during the same period in 2014.  Even so, net asset per share rose by 3 per cent from 772k to  795k achieved during the same period . Gross profit margin was high, rising to 19.5 per cent in the first quarter of 2015 from 17.4 per cent attained in the corresponding period in 2014. However, net profit margin dropped to 0.9 per cent from 5.3 per cent during the period, majorly on account of tax expense which shot up by 332 per cent to N6.8 million in the first quarter of 2015.

There is no doubt that the company’s policy of using its staff to distribute its products has some benefits. However, outsourcing such responsibility to professionals would not only ensure efficiency and effectiveness, it would help to create more job opportunities for those in the industry.

For the timely filing of the first quarter 2015 report, the company appeared to have learnt some lessons after it was sanctioned for non-rendition of first quarter and second quarter 2014 interim reports by The Nigerian Stock Exchange.

Quoted companies on The Exchange are required to file their quarterly accounts within 45 days after the end of the quarter in accordance with  the Listing Rules

There is the compelling need for the directors of the company to sit up and steer the ship of the company away from the situation where some of the directors hardly attended meetings in 2014. In fact, one of the directors never attended any of the three meetings scheduled for the year, while two were present twice. It is even worse that these absentee directors were also members of the audit committee where they exhibited similar misconduct during the year.