A Supreme dip of 18% in Q1

Profit for Supreme ventures dipped 18 percent in the March 2021 quarter, to $602 million, from $737 million in 2020 from Sale revenues that rose 5.7 percent to $10.7 billion from $10.1 billion in 2021.
Growth in revenues disguises an 8 percent or $400 million dip in revenues for the lottery segment and a $1 billion jump in sports betting.
Gross profit slipped 8.8 percent to $2 billion from $2.3 billion in 2020 as direct cost rose 11 percent from $7.8 billion to $8.7 billion and gross profit margin slipped to 18.84 percent in the 2021 March quarter, from 22.68 percent. Selling, administrative and other expenses rose marginally to $1.32 billion, from $1.30 million in 2020.
Finance cost ended at just $12 million in the quarter, while taxation came in at $163 million from $272 million in 2020.
The company has four reporting segments; Lottery, Sports Betting that includes horseracing, Pin Codes, and Other. During the quarter, the Lottery segment generated revenues of $4.6 billion versus $4.99 billion in 2020, with profit falling 32 percent to $630 million compared to $928 million in 2020. Sports Betting raked in revenues of $3 billion versus $2 billion in 2020 and transformed a $4 million profit into a profit of $246 million in 2021, Pin Codes generated income of $2.95 billion in 2021 with a profit of $46 million versus revenues of $3 billion in 2020 and profit of $69 million and the Other segment had revenues of $125 million with a loss of $155 million compared to revenues of $83 million and with a small $3 million loss in 2020.
Earnings per share came in at 22.46 cents for the quarter, down from 28 cents for 2020. The lottery segment delivered an increase in revenues of 9.6 percent to $5.13 billion, up from $4.68 billion for the similar period in 2019, but the gains were nullified in the first quarter of 2021. With the company now faces increased competition, that could be one reason for the fall in revenues for this segment and is a matter to be closely watched as it could worsen going forward for the rest of the year.

Supreme Ventures traded at $16 on Friday.

Gross cash flow brought in $965 million, but additions to fixed assets and acquisition of subsidiary and the paying of $738 million in dividends resulted in a net outflow of $1.34 billion. At the end of March, shareholders’ equity stood at $4 billion, with borrowings at just $5.9 million. Net current assets ended the period at $7.1 billion, including cash funds of $4.97 billion, with Payables of $3.45 billion.
The company has declared an interim ordinary dividend of 20 cents per stock payable on May 21 to shareholders on record at May 7, with the ex-dividend date of May 6.
The stock traded at $16 on the Main Market of the Jamaica Stock Exchange, with a PE ratio of 16 times 2021 projected earnings of $1. There is the view that earnings to come, will show that the projection is too low.

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