FosRich Company Ltd. (JSE: FOSRICH) released their audited financial statements for the financial year(FY) ended December 31, 2017.
The company’s first financial report post IPO sets a positive tone for 2018.
FOSRICH saw a sharp increase in its net profit of JMD $54 million or 81 percent when compared to the previous financial year of JMD
$30 million; as a result of other income and gains in currency conversion.
FOSRICH also displayed excellent financial management having increased Return on Assets (ROA) by more than 50 percent in 2017 of 4.2 percent compared to 2.7 percent in the prior year.
Furthermore, the company expanded its Return on Equity of 9 percent when compared to FY 2016 of 7.6 percent. This is as a result of the marginal growth in the company’s total assets and decreases in total liabilities such as payables and current portion of long-term liabilities.
Moreover, FOSRICH increased its retained earnings by 48 percent giving them leverage to invest more in core business functions for further growth in the 2018 FY.
FOSRICH reported robust growth in its cash and cash equivalents in 2017 by 621.7 percent; an increase of JMD119.8 million when compared to financial year 2016 JMD-22.9 million. This notable increase was as a result of the growth in financing activities of 245.9 percent from listing on the JSE and also the decrease in cash used for investing activities of JMD-7.6 million compared to -10.5 million in FY 2016. Currently, FOSRICH is trading at 2.70 with a Price to Earnings (P/E) of 24.49x.
Overall FosRich Company Ltd. displays good financial health with good financial management, and while there are some potential risks such as currency risk, FosRich remains a strong buy recommendation.