Cutix Plc – Revenue Growth Offset by Declining EPS and Compressed Profitability
Overview: Cutix Plc posted strong topline performance for the full year ended April 2025, with a 30% revenue increase and a 19% growth in total assets, indicating business expansion. However, these gains were not matched by earnings growth. Profit after tax declined by 3%, while basic earnings per share (EPS) dropped sharply by 52%, primarily due to a significant dilution in share capital. Capital expenditure also spiked, putting pressure on cash flows and near-term returns.
✅ Strengths
- Topline Momentum: Revenue increased by 30% YoY to ₦15.77 billion, suggesting robust demand and possible market share gains.
- Asset Base Expansion: Total assets rose 19% YoY to ₦8.69 billion, supported by operational scaling and capital investments.
- Significant Capital Investment: Capex grew by 245% to ₦1.37 billion, pointing to infrastructure upgrades or capacity expansion which may yield future benefits.
- Equity Growth: Total equity increased by 12%, reflecting retained earnings and recapitalization efforts.
⚠️ Weaknesses / Risks
- Profitability Decline: Profit after tax declined by 3% YoY, reflecting weaker cost management despite stronger revenue.
- EPS Dilution: EPS dropped by over 52% YoY due to a 100% increase in share capital from a rights issue or bonus issue—resulting in poor per-share value creation for shareholders.
- Flat Operating Margins: Profit before tax remained flat (-1% YoY), implying no improvement in operating efficiency despite a large revenue jump.
- Increased Leverage: Liabilities rose 27% YoY, potentially increasing debt servicing risks and constraining future financing flexibility.
- Declining Valuation: Share price dropped by ₦67 (22%) to ₦243 per share, likely reflecting market concerns over EPS deterioration and shareholder dilution.
📉 Per Share Concerns
Metric 2025 2024 Change
EPS (Basic) 14.65 kobo 30.24 kobo ↓ 52%
Adjusted EPS 14.65 kobo 15.12 kobo ↓ 3%
Total Assets per Share ₦1.23 ₦2.07 ↓ 40%
Share Price ₦2.43 ₦3.10 ↓ 22%
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