Cisco shares solid Financial Results amid improved profitability
Cisco Systems New Zealand Limited has reported a strong financial performance for the fiscal year ending 31 July 2024, showcasing a notable increase in net profit despite a slight dip in overall revenue.
The company's annual report outlines robust operational management and cost controls as key contributors to its success during the period.
Financial Performance Overview
The company recorded total revenue of NZD 40.4 million, a marginal decline from the NZD 40.7 million posted in the prior year.
Despite this small contraction in revenue, Cisco Systems New Zealand achieved a significant 65.4% increase in net profit, rising from NZD 2.99 million in 2023 to NZD 4.94 million in 2024.
This result was driven by a combination of reduced administrative and marketing expenses, which helped to bolster overall profitability.
The profit before tax for the year stood at NZD 5.92 million, reflecting an increase from NZD 4.61 million in the previous year.
The company's income tax expense fell sharply from NZD 1.62 million in 2023 to NZD 976,870 in 2024, further supporting net earnings.
Cost Management and Operational Efficiency
Administrative expenses decreased by approximately NZD 904,000, while marketing expenses were cut nearly in half, dropping from NZD 29,501 in 2023 to NZD 60,941 in 2024.
Other operational costs also saw a reduction, with total other expenses falling to NZD 4.85 million from NZD 5.37 million in the previous fiscal year.
Efforts to optimise cash flow were evident in the net cash generated from operating activities, which totalled NZD 2.59 million. This marked a substantial reduction from NZD 20.2 million in the prior year, influenced by decreased receipts from customers.
Investment in Future Growth
Capital expenditure during the year included NZD 29,569 allocated to property, plant, and equipment. The company also invested NZD 1.51 million in loans to related parties, underscoring its commitment to broader corporate initiatives.
Despite these outflows, Cisco Systems New Zealand successfully increased its cash and cash equivalents to NZD 6.25 million by the end of the fiscal year, a slight improvement over the previous year's closing balance of NZD 5.90 million.
Asset and Liability Management
The company's total assets grew to NZD 30.5 million as of 31 July 2024, compared to NZD 26.1 million in 2023.
Current assets represented the majority of this increase, primarily due to an NZD 3.21 million rise in trade and other receivables. Non-current assets also rose to NZD 1.81 million, driven by additional investments in property, plant, and equipment.
Total liabilities decreased from NZD 6.3 million to NZD 5.8 million, largely due to reduced employee benefit obligations and income tax payables.
Equity Position and Shareholder Value
The company's equity position strengthened, with total equity climbing to NZD 24.73 million from NZD 19.79 million in the prior year. Retained earnings were the key driver of this improvement, increasing to NZD 12.61 million. Share-based payment reserves remained unchanged at NZD 12.12 million.
Looking Ahead
With no material commitments or contingencies reported at the end of the fiscal year, Cisco Systems New Zealand appears well-positioned to sustain its financial health and explore new opportunities in the networking and technology sectors.
The directors expressed optimism about the company's trajectory, citing stable operational frameworks and a focus on innovation.
No significant events occurred post-balance date that would alter the financial position outlined in the report.
Cisco Systems New Zealand's robust fiscal performance highlights its resilience and adaptability in a competitive market.
As the company advances into the new year, maintaining cost discipline and leveraging its technological expertise will remain integral to its continued growth.
