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ZENITH Bank Plc did not quite hit the zenith in the financial year to December 13, 2011 but the company remains one of the active equities in the market. Indeed, the hope was that as more figures roll in, the banking sector may be almost back on its feet and so able to give more positive touch to the market's daily statistics.

However, for investors, the good news is that Zenith Bank is planning to pay 95 kobo dividend based on the 2011 annual figures provided this is approved at the annual general meeting scheduled for April 3, 2012. But make no mistake about this: the dividend is being recommended in spite of reduced profit margin and the return, more significantly, of asset value drop on the debit side of the profit and loss.

IT looks like one of this year's early birds as far as full year audited figures release is concerned; Chellarams PLC had a change in strategy in the financial year to December 31, 2011. Did it pay off or was it a change with an eye on the future?

This might have to be a major revelation come this year's annual general meeting. This is because even though Chellarams was a conglomerate, the increase in investments significantly by 80.3 per centwas kind of surprising. The closing investment value was N423.1m compared to N234.7m by December 2010.

It did not have immediate positive impact on the company's bottom line during 2011 financial year though. Chellarams was only able to grow its total income by 13.4 per cent to N19310.3m from N17031.2m. This was as a 36.2 per cent drop in income from other sources slowed down 13.9 per cent rise in core business turnover from N16849m to N19194m.

The company was able to keep corresponding cost of sales increase within limits. It rose by 13.1 per cent to N16790m from N14847m. However, the little gains that accrue from this was quickly swallowed by 17.4 per cent rise in distribution, administration and marketing expenses. It jumped from N1915m to N2248m.

This dampened resultant profit before tax thus rose by only 3.08 per cent on 2010 level. It closed the year at N271.3m compared to N263.2m in 2010. And the tax man got less than proportionate share of this within the year thus making profit after tax to grow by 7.32 per cent to N212.5m from N198m

So, if the change in strategy did not help the year's bottom line, why was it necessary? That is one question only full year annual report can give a good hint later on but from the brief released to the stock market late in February, Chellaramsended with a big drop in its cash and bank balance position principally because  of this and some other liquidity management indicators.

The cash position closed 63.9 per cent down on 2010's closing N164.2m at N59.2m. This was in spite of a 38.1 per cent increase in short term borrowings to N2329m from N1686m; and 58.4 per cent rise in other creditors balance to N6616m from N4177m.

As cash was being generated from these major shifts resulting in inflow in cash or kind, investments' significant growth was joined by 47.8 per cent increase in stocks; 19.3 per cent rise in trade debtors and 11.5 per cent increase in other debits to soak it up and ensure the low cash position by the financial year end. Trade creditors' balance dropped by 50.4 per cent too.

In the end, even working capital balance eased by 12.4 per cent to N921.1m from N1052m while more importantly, the company's profit margin closed nearer the loss league at 1.4 per cent compared to 1.55 per cent by 2010 year end.

THE frown was already developing when the recent nationwide economic shut down occurred; now it is inevitable and could be directed somewhere else when the figures of Northern Nigeria Flour Mills PLC (NNFL) surface later this year. Of course, the financial 2012 has not ended yet (it ends by March 31) but it is almost certain to be a year with all indicators pointing downwards.

According to the interim figures for the third quarter to December 2011 released recently to the stock market, turnover increased in double digit but not high enough to match the leap in cost of sales and expenses recorded. Then, as if this was not bad enough, the nationwide strike occurred while the company's warehouse was fuller with stocks; trade debtors were mounting and more importantly, it was becoming much difficult to make profit.

The turnover for the period rose by 21.5 per cent to N10052m from N8274m.

IT looks like one of this year's early birds as far as full year audited figures release is concerned; Chellarams PLC had a change in strategy in the financial year to December 31, 2011. Did it pay off or was it a change with an eye on the future?

This might have to be a major revelation come this year's annual general meeting. This is because even though Chellarams was a conglomerate, the increase in investments significantly by 80.3 per centwas kind of surprising. The closing investment value was N423.1m compared to N234.7m by December 2010.

It did not have immediate positive impact on the company's bottom line during 2011 financial year though. Chellarams was only able to grow its total income by 13.4 per cent to N19310.3m from N17031.2m. This was as a 36.2 per cent drop in income from other sources slowed down 13.9 per cent rise in core business turnover from N16849m to N19194m.

UNIC Insurance PLC has probably found a new life line for its main business of insurance. That is comparatively better returns on its investment. Or so the figures for the third quarter to September 2011 say so clearly. They also point out that for the helping hand offered by investment income within the nine months in question, the company would have found it very difficult to close financial 2011 far from the loss league.

According to the interim figures for the period released to the stock market, the company's gross premium took a 34.3 per cent dive within the nine months. It dropped to N882.3m from N1342m by September 2010.

It was at this early stage of the period's accounting that investment income played a far better hand to ensure that, across the board, things were not as bad as ther gross premium figures were pulling. UNIC recorded a far less drop in investment income within the period and so, average drop in overall turnover was considerably less. Investment income had come to N854.9m, down by only 5.64 per cent on N906m previously.

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