Growth in revenues drive PZC’s earnings

On the Ghana stock exchange, PZC for the third quarter ending February 2018, churned out a profit of GHS 3 million. It recorded a loss of GHS 9.53 million in the same period last year. Its revenues grew by 26% from GHS 66.82 million in February 2017 to GHS 84.34 million in February 2018. Its return on equity and return on assets currently stands at 16.3% and 3.3% respectively. Earnings per share increased from -0.057 in February 2017 to 0.018 in February 2018.

PZC’s inventory turnover ratio which indicates the number of times its stocks were sold and replaced increased from 2.97 to 3.75. Its day sales outstanding which measure the average length of time it takes the firm to receive cash on its credit sales dropped to 116 days from 192 days in the previous period. The company’s ability to cover obligations on debt also improved significantly with its times-interest-earned ratio increasing to 19.75 from -15.28. This was as a result of a decline in its finance costs from GHS 512,000 to GHS 85,000 and an increase in its operating profits to GHS 1.68 million from a loss of GHS 7.82 million recorded in the previous period.

PZC has rewarded investors with a YTD return of 90%. Its share prices have followed an upward trajectory since year open. Its currently trades above its book value of GHS 0.11. GN analysts remain confident that the turnaround in the company’s profits will be sustained buoyed by the expected improvement in the Ghanaian economy with gross domestic product forecasted to grow at 8.3% in 2018 by the World Bank.

The composite index and the financial stock index inched up by 1.57 points and 6.29 points to peg at a YTD return of 31.89% and 34.29% respectively. There were 2 gainers [GCB & CAL] and 4 losers [FML, HFC, PBC, EGL]. CAL topped the charts in terms of volume as 717,200 shares worth 1,254,776 changed hands.

On the Ghana Alternative Market, Digicut Production & Advertising Ltd. (DIGICUT) listed 118,890,621 shares on the Ghana Alternative Market after the completion of its Initial Public Offer on Wednesday April 11, 2018. Trading activity on the Ghana alternative market ended with 1000 shares of DIGICUT and 1000 shares of ILL changing hands.

On the Currency market, the Cedi appreciated marginally against the Dollar but lost to the Euro and the British Pound at the end of yesterday’s trade. The local currency exchanged at a mid-rate of GHS 4.4052 to the USD, GHS 6.2589 to the GBP and GHS 5.4563 to the EURO as at week close. The GCFM Cedi index, a measure of the holistic performance of the Cedi on the interbank market now records a year-to-date depreciation of 1.62%.2015.

 

By: GN Research

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