RedStar Records 27 Percent Increase

In spite of the global economic downturn that has drastically reduced volumes in the logistics and courier business, RedStar Express Plc, a wholly owned indigenous courier company that aspires to be the best service –driven logistics solution provider in the country has recorded an impressive 27 percent growth in earnings. Mohammed H. Koguna, chairman of the company disclosed this during his annual report and accounts presentation for the financial year 2008/2009  at the company’s 16th  Annual General Meeting held in Lagos last week . This year’s AGM marked the second since the company was quoted on the Nigerian Stock Exchange.
Koguna informed that despite the lull in capital market activities that sizeable volume of the company’s shares was actively traded on the floor of the Exchange.
Koguna said the entrance of more players in the courier space has heightened competition in the industry with mounting pressure on prices and margins even as he lamented the deplorable condition of the Nigerian roads which the organization has to contend with often leading to high maintenance cost and accidents.
The chairman was happy that three subsidiaries created by the company in the financial year demonstrated impressive first year results saying that collectively the subsidiaries accounted for 25 percent of the group’s turnover with higher margins.  Focusing on different segments, he said the birth of the subsidiaries gives RedStar Express Plc a broader revenue base and greater growth potentials which he said will go a long way in reducing the risks of the company while ensuring stability of income.
On the financial performance of the company within the financial year, Koguna said the harsh business environment notwithstanding that RedStar Express posted a good performance with group turnover increasing by 29 percent from N3.1 billion N4 billion while profit before tax leapfrogged by 50 percent to N459million and profit after tax grew by 27 percent to N248 million after making adjustments for back duty additional tax arising from 5 years tax audit covering 2003-2007. Earnings per share therefore increased from 33 kobo to 42 kobo. In view of that, the Board of Directors of the company recommended a cash dividend of 30 kobo per share payable to shareholders whose names appeared on the register of the company as at August 13, 2009.Subject to withholding tax , the AGM  approved that the total dividends payable  to shareholders amounts to N177 million
It would be recalled that in the company’s Annual General Meeting held in July last year, dividend of 25 kobo was declared per ordinary share amounting to N147 million.
On corporate social responsibility, Koguna said the board of directors approved a grant of N6million to RedStar Foundation for the purpose of establishing the scholarship scheme in the eastern and northern parts of the country even as the AGM approved that appropriation of 0.5 percent of profit after tax be granted to RedStar Foundation as a way of extending the CSR of the company on continual basis.
On its operations, the chairman said the board has set a strong growth platform in the subsidiaries of the company given their potentials saying that considering the global economic downturn that the approach of the company for 2009/2010 will be of cautious optimism.
Sule Umar bichi, managing director / chief executive officer of the company assured that all the companies’ money owed by their customers will be collected as the management has contracted credit collection personnel in Abuja and Port Harcourt to enhance the process. He said what is happening in the money market and the finance   sector  has been noted even as he informed that the company is making sure that that does not affect their debt collection.