Briscoe Motors Suffers N1.27bn Loss
This may not be the best of times for Briscoe Motors, the pioneer dealer of Toyota automobiles, though the firm may likely come out great at the end of the day.
According to Nigerian Stock Exchange released audited financial results of Briscoe Motors suffered a loss of N1.27 billion in 2019.
The report released by the exchange on Monday however showed the company’s performance is an improvement, when compared with the N2.18 billion loss the company reported in 2018.
Highlights Of 2019 Financial Report: Revenue increased by 33.9 per cent, Cost of sales increased 41.8 per cent, Operating profit increased by 94.5 per cent, Finance costs decreased by 37.3 per cent and Loss for the year decreased by 41.7 per cent.
A cursory view of R.T. Briscoe’s performance, revealed that revenue increased from N5.18 billion in 2018 to N6.94 billion in 2019. This increase was driven by the improvement in the dealer’s core business segment, as the proceeds from the sale of Motor vehicle and accessories in 2019, rose by 59.7 per cent.
This improvement in revenue is a consequence of the board’s decision in 2017, to return the company back to profitability, with avid steps taken to restructure the business for greater efficiency and economic rewards, via a strategic positioning of the company’s business segment to customers. This has helped the core business segment of Briscoe in recent years.
Despite this improvement, it is noteworthy that the 61 per cent increase in the cost, coming from the company’s activities in the Motor vehicle and accessories segment, continue to pressure the growth prospect of the dealer.
In like manners, the rising cost of sales from this segment was compounded by a N1.45 billion finance cost, which the company incurred during the year, as the company is aggressively geared with bank overdraft of N15.76 billion, representing 86 per cent of the total liabilities of the company.
With recoverability of the trade and other receivables of the company long overdue, the Toyota Automobile dealer is exposed to credit risk, as trade and other receivables accounted for 31 per cent of the total assets value of N8.914 billion.
Key issues facing the company
It is noteworthy that the auto dealer has a massive working capital deficit of N14.76 billion, driven by a current debt of N15.76 billion.
With bank overdraft and other debt unpaid, the company faces penalty charges by banks and court litigations. All these issues have led to winding-up cases of the company, from the banks and other creditors.
As a result of both current and previous losses incurred over the years, the shareholders’ fund has been completely eroded, to the tune of N9.5 billion and N9.9 billion deficit for the group and company respectively, as at December 2019.
The widespread vulnerability in the company’s book has cast doubts on the going–concern of the company. (Nairametrics)
