Red Star Express, the only indigenous logistics company to be listed on the Nigerian Exchange Limited (NGX), has grown its total assets to nearly N8 billion as the company continues to invest in the future and establishes new benchmarks for innovation and technological growth.
In what can aptly be described as a seemingly resilient performance, the group posted strong revenue and profit for the final quarter of its fiscal year. The group’s revenue jumped to over 12.6 billion naira and pre-tax profit was 393 million naira for the year ended March 31, 2022, compared to 220.8 million naira for the 2021 financial year.
RSE recorded revenue of N12.6 billion (an impressive 34% increase over the same period last year) while net cash provided by operating activities of N740 million naira vs. 726 million naira the previous year (a 16% improvement on the previous year)
Details of the revenue split include the following; Red Star Courier which grew by 38.8% to N7.38 billion in 2022 from N5.31 billion in 2021, while Red Star Freight grew by 33.5% to N1.7 billion. naira in 2022 compared to 1.28 billion naira in 2021.
Other contributors to revenue are Red Star Support Services which appreciated 13% to N1.66 billion in 2022 from N1.46 billion in 2021, while Red Star Logistics grew by 37% to reach 1.92 billion naira in 2022 from 1.4 billion naira in 2022. 2021.
It is pertinent to note that the global economies have been going through very difficult times since 2020, following the adverse outbreak of the COVID-19 pandemic which has all but wiped out many businesses in Nigeria and around the world. Only the most resilient managed to remain profitable.
Red Star presented a very strong and healthy balance sheet, ending the period, with cash and cash equivalents of 761 million naira, an increase in pre-tax margin of 3%, compared to 2.2% the previous year and earnings of 28 kobo per share, an increase of 75% over the previous year to 16 kobo.
During the reporting period, the company invested in operating assets of over N700 million to expand its operations. The findings come as the industry continues to grapple with supply chain headwinds and inflationary pressures.
Investment is reflected in total assets
Red Star’s commitment to investing in the future was reflected in its non-current asset base, which grew to N3.2 billion, while current assets reached over N4.5 billion. naira. Total assets thus jumped to a record high of over 7.8 billion naira in 2022, from billions of naira reported in 2021.
The cautiousness of the company’s management is also reflected in the revenue pipeline which now stands at nearly 2.6 billion naira. Equity also increased during the period under review.
At a time when many companies were spending more on recurring expenses, Red Star continued to pursue a strategy of investing in technology and assets.
The strength of the company is its acute sense of innovation and strategic partnerships. Red Star has effectively developed strategies that have an impact not only on its business, but essentially on the economy and its potential customers.
A good example is the continuous support it provides to small and medium-sized enterprises (SMEs), which it started in 2018 and strengthened over the past three years. By focusing particularly on what it calls “small SMEs”, Red Star has conquered the segment of investors who constitute an important economic power.
The result is a solid and commendable relationship between the company and thousands of SMEs, in collaboration with its e-commerce department.
Supports in the non-essential sector
Red Star also continued to support the agricultural sector, targeting farmers and agribusinesses and asking its in-house experts to offer free assistance to ensure that rudimentary processes such as business documentation/certification are in place. place in others to help them develop their businesses, even at the export level. These efforts should result in positive returns for businesses in the near future.
The company’s additional investment in cold chain trucks (its brand new trucks, plying the roads as “Red Star Cargo – cold chain services”), while futuristic, is already paying off. positive. The company’s trucks/cold stores which at first started off transporting mostly perishable agricultural products such as tomatoes, recently with the advent of COVID have been banked into a more strategic function of providing storage facilities. cold storage essential for pharmaceuticals and other product manufacturers. which require strict temperature control.
Red Star has therefore deployed its investment in assets sufficiently to give its business the necessary impetus.
Utmost importance is placed on deploying huge asset investments in the e-commerce industry which it rightly sees as the most important growth engine of the new era. There is probably no doubt that CSR has successfully positioned itself as the backbone of the industry.
The company’s new Managing Director, Mr. Auwalu Babura, however, stressed that the key factor in Red Star’s success and differentiation is the resilience of its people and the company’s non-negotiable commitment to putting people first.
He noted that “Red Star is driven by its strong philosophy of PSP – People, Service, Profits. We have long understood that when you take care of people, they will take care of you. In the logistics sector, the consequences of errors are very high. We believe that if the team is well motivated, we can continue to provide extraordinary and top-notch services.
Revenue, resilient revenue
Describing the company’s latest result as “resilient revenue and profit growth”, the CEO of Red Star Express enthused: “Given our momentum, we are optimistic about our business, especially the light of our operational improvements and process re-engineering activity.While we recognize the challenges of continued inflationary cost pressures, with rising energy prices, we believe we are well positioned to make growth with good returns for shareholders.
According to Babura, Red Star’s enduring success is indeed attributable to its futuristic approach, strategic planning, agile management style and bold investments in the future. It continued to weather the storm with no capital erosion and very low employee turnover. “With a human resources vision and culture that sees its people as its greatest asset, heavy investments are usually made in human capital development.”
Head of Finance, Mr. Valentine Onyibo echoed this, “despite rising costs due to inflation and other negative business indices, Red Star maintained improved margins and further improved its financial position. The portfolio continued to perform well and we saw several positive earnings across the company and its subsidiaries.
Red Star Express Plc is a licensee of Federal Express (FedEx) Corporation, the world’s largest provider of delivery solutions. It has over 150 offices in Nigeria; with international offices in Niger, Burkina Faso and Benin. Its network spans over 1,500 communities in Nigeria and 214 countries worldwide.
Red Star Express is made up of 4 divisions and business units specializing in areas such as express delivery, logistics, freight, outsourcing services, supply chain management, e-commerce facilitation, printing and packaging, electronic archiving, as well as agri-food trade logistics. .
Considering the above, Babura’s prediction of better years ahead is certainly not far-fetched. “I envision a stronger Red Star – bigger in terms of size, revenue and investment in technology,” he said.