Camelot Ghana Limited – 2021 Annual Report

By Published On: May 16th, 2022Categories: Corporate announcement, Earnings

Camelot Ghana Limited (CMLT.gh) 2021 Annual Report

CHAIRMAN’S STATEMENT FOR THE YEAR ENDED 31ST DECEMBER 2021

Distinguished Shareholders, Ladies and Gentlemen:

It is my profound privilege, on behalf of the Board, Management  and Staff, to welcome you to the 23rd Annual General Meeting of Camelot Ghana Limited and to present to you the Annual Report  and Financial Statements for the year ended 31 December 2021.

ECONOMIC REVIEW

Ghana’s economy grew at 5.4% in 2021, registering a strong comeback from a 37 – year low rate of 0.5% in 2020, when the  Covid-19 pandemic struck. Real GDP expanded by 7% in the 4th quarter of 2021 compared to 4.3 percentage growth recorded in the corresponding period of 2020. Similarly, non-oil real GDP in  the 4 quarter of 2021 expanded by 7.6% compared to 5.7% for the same period in 2020.

The Ghana cedi ended last year with a depreciation of a little above 9% on the retail market and 3.93% to the dollar on the interbank forex market. This performance has been described as mixed by analysts and currency traders because of the spread between the retail and interbank market. In addition to this, the Cedi managed a appreciation against the Dollar, for the first half of the year.

Inflation went up to 12.7% in December 2021 from November’s 12.3%. December registered the highest inflation rate since April 2017. Our annual inflation rate increased for the tenth consecutive month to 19.4% in March of 2022, registering a sharp increase from 15.7% in February. That was the highest rate since August of 2009, breaching the Bank of Ghana’s target band of 6% to 10% for the seventh month.

FINANCIAL PERFORMANCE IN 2021

Smart, sustainable growth – Ghs 10 million in revenues; a 40% increase over the previous year.

Our strategy for Camelot’s future started with our investment in FLEXO to diversify the income streams of the company. This helped in achieving a 40% growth in revenue from Ghs 7.31 million to Ghs 10.24 million. Cost of Sales increased by 57%; largely influenced by the price hikes in the global Flexo raw material market. Finance Costs increased by 18% over the previous year due to the pressure on our Loan Repayment, in spite of which we recorded a modest Profit Before Tax of Ghs243,373. The resulting loss of Ghs 430,157 was however influenced by the computation of deferred tax, which resulted in a heavy tax expense of Ghs 673,530 due to our heavy investment in the year of review.

Considering the extremely challenging period and performance under review, it stands to prudence and focus to forgo the payment of Dividend for the period under review. This will enable our company position itself financially to confront the uncertainties and opportunities envisaged in 2022.

PRODUCT DEVELOPMENT

Cheque Products

Our Cheque business has seen a sensational boost in customer base which makes us the market leader in the security print industry. Out of 23 Regulated Financial Institutions (main stream banks) by the bank of Ghana (BoG), we print for 19 of them, in addition to Savings and Loans and other Finance Houses. With the introduction of the E-levy Tax, we project a minimal increase in the demand for cheques which will inure to our benefit.

Flexo products

The Flexo take-off has suffered severe setbacks with global supply chain challenges, in addition to weak professional support from our financiers, and these together have caused a delay in the realization of our projected market growth. The dynamics of this market require raw material financing that would equip us adequately for entry into the big customer niche. Unfortunately, the slow response of our financiers in appreciating this, led to major delays in raw material and supply chain arrangements which denied us of some market entry opportunities in 2021. These issues are being addressed towards positioning us to commence big ticket contracts in the second half of 2022.

Beyond the horizon

The first half of 2022 will complete the reorganization of our supply chain and raw material financing arrangements, and position us better for growth in the second half of the year. Amidst the economic turmoil with our struggling Cedi and major challenges in the global supply chain, our business development shows great market opportunity that will be tapped into in the coming months.

In conclusion, I wish to extend our gratitude and appreciation to our staff and management, for their resilience throughout the challenging times last year to bring our company to a successful close. On behalf of the Board of Directors, I wish to commend them for their determination and encourage them in their diligence and steadfastness towards reaching the results we project, even in these uncertain times.

Once again, we recognize the continued support, custom and loyalty of our numerous customers in Ghana and beyond, who have patronized our products and services over the years. As we remain in our commitment to exceed your expectations through outstanding quality and product service delivery, we extend our best wishes to all of you in these difficult times. Let us all stay safe and pursue the relevant best protocols in ensuring our collective health, safety and eventual defeat of this pandemic. Fellow Shareholders, I thank you all for your continued support and confidence in our company. We look forward to exciting and rewarding times ahead.