In its expansion drive, Red Star Express Plc, one of Nigeria’s leading logistics company, has disclosed its plans to raise additional capital and to restructure the company from the current group structure to a holding company.
The firm which sought the approval of the shareholders at the 24th Annual General Meeting (AGM) in Lagos could raise the capital via the issue of debt instruments, preference shares or ordinary shares or a combination of any of these options whether by way of private placement, rights to existing shareholders, offer for subscription or any staff share scheme, at a quantum and price upon such other terms and conditions to be determined by directors and subject to regulatory approval.
However, the company posted a turnover of N7.3billion in the financial year ended March 2017. This represents 10 percent above N6.6 billion recorded in the preceding year.
The profit before tax increased from N572million to N653million, while profit after tax also increased from N334.4million to N426.8million.
On dividend, the company maintained its commitment to the creation of wealth for shareholders in appreciation of their support at all times. Consequently, the board of directors declared a gross cash dividend of 40 kobo for every 50 kobo share totaling N236million which will be paid on September 7th 2017 subject to the deduction of appropriate withholding tax.
According to Mohammed Koguna, chairman, the company is happy to have posted a profit from its preceding year inspite of challenges.
“I am happy to inform you that despite the challenges posed by the environment during the financial year under review, our staff and management worked assiduously to ensure that our company posted a satisfactory result.
He noted that lower oil revenues, tight capital controls, increased inflationary pressure and exchange rate volatility combined to make 2016 a challenging year for Nigeria.
By June 2016, the country had slipped into recession, facing its first full year contraction for almost three decades, with a negative annual GDP growth rate of -1.73 percent compared to about 2.8 percent growth rate recorded in 2015 as reported by the Nigeria Bureau of Statistics (NBS). Most of the hitherto solid conglomerates had to resort to several cost cutting measures, including the most inevitable of downsizing, in order to remain active in the economy. Despite being a global phenomenon, unemployment has been a major challenge successive administrations contend with yearly. The national Bureau of statistics (NBS) says the country’s unemployment rate rose from 13.3 percent in the 2nd quarter to 13.9 percent in the 3rd quarter of 2016. The crisis in the nation’s aviation industry escalated from occasional crashes to perpetual flight delays and cancellations. The acute shortage of aviation fuel also worsened the situation with airfares rising by as much as 3005.
“However, we are aware of government’s multi-faceted efforts in confronting and resolving the economic challenges and we can attest to the fact that they are already yielding positive efforts. We are glad our company made profits despite all”, Koguna added.
Red Star Express remained steadfast in its policy of making sure that the social and economic welfare of its stakeholders are preserved and sustained through the Red Star Foundation. However, to show commitment on this, during the year under review, the company awarded 20 additional scholarships to secondary school students from the Eastern, Western and Northern parts of Nigeria.
In the course of the year, the company opened a branch office in the Niger Republic and is gradually building capacity in pickup and delivery of mails and packages.
Nevertheless, the company looks forward to restructuring the company as a Holding Company from its current Group Structure which the company has run for over seven years. This according to the chairman became necessary in view of the various initiatives the company seeks to explore and the need to have a more structured accounting system.
Hope Moses-Ashike
