RT Briscoe Nets N3.16bn Loss, As Auditors Propose Fresh Capital Injection

The suspension of trading on the shares of RT Briscoe may be lifted soon, following Tuesday’s release of its audited financials for the year ended December 31, 2108, with barely three months into the current financial year. The result however showed the company’s further slide into oblivion, as turnover from sales dropped by 55.37%, while loss after tax increased to N3.16bn.

The external auditors- KPMG Professional Services, in its report, proposed that the rt Briscoe shareholders should consider injecting fresh capital into the group to continue as a going concern, given that group liabilities exceeded current assets by N11.27bn; while total liabilities surpassed total assets by N6.04bn.

“As at the date of our report, the company is yet to secure the required funding to enable it settle its outstanding obligations and to finance its working capital requirements. We believe these events or conditions, individually or collectively cast significant doubt on the group and company’s ability to realize its assets and settle its obligations in the ordinary course of business.

“As a result, the preparation of the consolidated and separate financial statements on a going concern basis is inappropriate. In our opinion, the consolidated and separate financial statements should reflect adjustments to reduce the value of assets to their recoverable amounts and to provide for any further liabilities that might arise,” the auditors added.
Specifically, revenue for the period fell by N5.431bn from N9.808bn to N4.376bn; just as cost of sales reduced to N3.405bn from N8.248bn; leaving gross profit of N971.463m, down from N1.559bn.

A breakdown according to business units showed that revenue from motor vehicles and accessories remained the honey pot at N2.556bn; down from N7.1bn in 2016; while and cost of sales was N2.168bn, down from N6.454bn. It was followed by income from after sales services and parts which stood at N1.044bn and N810.472m; as against N1.064bn and N619.729m respectively. Property development and facility management contributed just N219.47m, down significantly from N871.418m

Other income for the period dropped significantly from N345.946m to N83.818m, mainly a total of N24.232m recovered “bad debts,” which fell from N235.376m; while the company recognized an impairment of goodwill totaling N33.999m. Impairment loss on financial assets dropped to N45.804m, being “allowances for doubtful receivables (trade, VAT and Withholding tax); compared to previous year’s N1.134bn. Selling and distribution expenses stood at N187.685m from N186.534m; administrative expenses dropped slightly from N1.526bn in 2016, to N1.254bn; following which operating loss fell from N941.756m to N467.102m.

Finance income dropped to N90.696m from N196.829m; while finance costs increased to N2.76bn from N2.057bn; resulting in net finance costs of N2.67bn from N1.86bn; loss before income tax climbed to N3.145bn from N2.819bn, representing a drop by N326.35m or 11.57%. Loss after tax rose from N2.9bn to N3.16bn, following which loss per share increased to N2.69, from N2.47 each.

https://investdata.com.ng/2018/09/rt-briscoe-nets-n3-16bn-loss-as-auditors-propose-fresh-capital-injection/