Tantalizer share unattractive as food restaurant chain declares loss

Tantalizer Plc, Nigerian fast food restaurant chain, could not sell as much to cover its operating cost, its 9-month result for financial year 2019 shows. The company loses 7k on every share outstanding in the period.

At the close of trading today, shareholders 3,211,627,907 shares outstanding in Tantalizer worth N642.325 million.

The fast food restaurant chain’s share has not been performing in the stock market since the beginning of the year when it opened at 21 kobo, now trading at 20 kobo, an obvious lack of liquidity support.

Meanwhile, at fair value of N489.642 billion at the end of 9 months in financial year 2019, the company’s net asset has been watered down by 30% from N699.916 million.

Year to date, its revenue clicked at N942.583 million compare to N1.165 billion the company made in the comparable period in 2018. This represents 19.13% decline year on year.

Following the reported decline in business activities cost of sales moved just in line. It dropped 23.11% from N69.1.45 million in 2018 to N531.661 million in 2019.

Though gross profit went down by 13% from N473.86 million to N410.92 million, cost efficiency boosted gross margin, from 40.66% to 43.59%.

This came on the back of improvement recorded in cost to sales ratio that was strengthened as Tantalizer cost per foods sold was reduced.

In the 9 months of financial year 2019, for every N100 foods item sold on the average, Tantalizer expended N56.40 as against N59.34 in the comparable period.

Distribution expenses in the prior period were N30.622 million, but it turned positive a year after at N3.354 million.  This means, the company made money from its logistic and distributions activities.

Administrative expenses also went down from N859.377 million to N732.078 million, just as finance expenses dropped to N65.886 million from N137.317 million in the comparable period.

From review of its statement of cash flow, Tantalizer has cash to throw around for its business. Though, it records negative profit for the year, its cash flow from operating activities was actually positive at N184.491 million.

From this amount, the management engaged in investing activities valued at N7.949 million – purchase of property, plant and equipment. It also repaid N88.6 million borrowed funds.

Read: https://dmarketforces.com/investors-gain-%e2%82%a6162-billion-as-stock-market-sustains-positive-momentum/

After adjustment for opening cash, the company closed the period with total cash of N49.626 million.

The company financial position looks weak. At the end of financial year 2019, Tantalizer’s term loan closed the period at N438.678 million, as against N518.108 million at the beginning of the year.

It means that management made some payments; this has been confirmed in the statement of cash flow.

Its trade and payable increased to N1.634 million from N1.366 million at the beginning of the year. However, trade and other receivables decline to N846.953 million from N973.209 million.

Analysts say Tantalizer is one of the kobo stock that is dragging stock market performance, and should not be listed on the main board.

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