On the Ghana Stock Exchange (GSE,) Sam Woode Limited [SWL] failed to impress investors in 2016FY as the company churned out poor financial results during the 52 weeks period.
The turnover reported in 2016FY fell by 33.2%; from GHS 4,567,914 in 2015FY to GHS 3,051,214.
The company incurred extra expenses during the year resulting in a 22.01% rise in the total expense figure from 2015. Operating profit generated from the core business line of SWL fell sharply by 71.02%; from GHS 1,394,238 in 2015FY to GHS 404,115 in 2016FY.
Bottom line for the period under review also fell by 87.68%; from GHS 1,055,219 in 2015FY to GHS 404,115 in 2016FY. Earnings per share [EPS] equally fell from GHS 0.048 in 2015 to GHS 0.016 in 2016 as a result of the dip in earnings. Liquidity ratio; a measure of the company’s ability to meet short term obligations [debt] when due fell from 0.768 in 2015 to 0.331 in 2016.
The weakened fundamental of the company is expected to make the equity unattractive on the bourse especially to institutional investors. Dips in earnings are strong signals of an economic ill-health of a company.
The low price of the equity however will remain an attractive feature for some retail investors who seek short term capital gains on low priced stocks. The equity however remains illiquid on the bourse since most investors hardly give attention to the stock at most times; as a result the dip in company fundamentals could have a less immediate impact on the share performance.
Trading activity on the bourse ended with 2 gainers [GCB and EGH] and 1 loser [ETI] yesterday. UTB topped the trading chart in terms of volume as 178,900 shares worth GHS 7,160.00 changed hands. Returns on the Composite and Financial Stock Index pegged at 7.22% and 9.90% respectively.
Trading activity on the Ghana Alternative Market (GAX) was hushed as no shares changed hands.
HORDS currently lead record capital gains on the GAX, appreciating by 25% from 2016 year open.
The Cedi gained marginally to the British Pound and Euro but lost to the Dollar yesterday.
The local currency exchanged at a mid-rate of GHS 4.3760 to the USD, GHS 5.4450 to the GBP and GHS 4.6143 to the EURO.
The GCFM Cedi index, a measure of the holistic performance of the Cedi on the inter-bank market now records a year-to-date depreciation of 4.23%.
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