Ellah Lakes has finally started showing revenue for the first time and managed to cut its losses by more than half. This is an important milestone because it signals that the business is beginning to generate sales rather than just relying on funding.
The good news is:
Revenue and gross profit are now positive.
Losses have reduced sharply.
The company has a very strong cash balance (₦5.7bn), which gives it breathing room for operations and expansion.
The worrying signs are:
Heavy dependence on a Director’s loan (₦6.9bn), which raises questions about sustainability and governance.
Expenses are still rising even though revenue is relatively small.
The company remains loss-making, meaning dividends are not in sight yet.
Impact on the Share Price (This Week):
In the short term, the stock could attract speculative buying because of the first-time revenue recognition and the big jump in cash position.
However, some investors may remain cautious until the company proves it can consistently grow revenue and control costs.
Recommended Trading Strategy
Entry Point (Short-Term Traders):
If price dips slightly on cautious investor reaction, look to enter at support zones (recent low at N13.50).
Speculative entry makes sense this week if momentum builds on the “first revenue” story.
Exit (Short-Term):
Take profits if price rallies 10–15% on the back of earnings enthusiasm.
Don’t chase if volume dries up — exit quickly to protect gains.
Medium-to-Long Term Investors:
Entry: Better to wait for confirmation of consistent revenue growth in next 1–2 quarters. If they can sustain sales from plantations and secure the Ondo State land lease, the growth story becomes stronger.
Exit: Consider pulling out if expenses continue rising faster than revenue, or if the Director’s loan starts creating repayment pressure.
🟢 Hold: If revenue steadily improves and losses keep narrowing, you can hold mid-to-long term for capital appreciation.
Advice This Week
Speculators/short-term traders: Enter on dips, aim for quick profit on news-driven rally, exit at resistance.
Conservative investors: Wait. The business is improving but still fragile - safer to watch another quarter of results.
Back out completely if:
Revenue growth stalls,
Debt load worsens, or
Management fails to control admin expenses.
Bottom Line: Ellah Lakes has moved from “pure speculation” into an “early turnaround story.” For this week, expect neutral-to-slightly bullish price action. Traders can ride the momentum, but long-term investors should be cautious and wait for more proof of sustained revenue.
