Profits on the improve for D&G

May 13, 2013 by

Desnoes & Geddes is reporting improved results for the nine months to the end of March this year with profits after tax up 30% to $1,050 billion, however in the latest quarter, profits was down 18% to $243 million after tax. The company took a $152 million charge, in the third quarter for making workers redundant, flowing from the decision to transfer the sales and distribution of its products to Celebration Brands, a joint venture company with Pepsi. The company’s management indicates that the amount written off in the quarter is 50 percent of the total separation cost. Based on these numbers Investor’s Choice, a sister publication to ICInsider.com, is projecting 66 cents per share earnings for the year after the one off staff separation cost, but expect earnings to close in on $1 per share in the 2013/14 year as growth in sales and cost cutting improve profits.

Overseas production | The results reflect the decision last year to switch the production and sales of Red Stripe to the USA. Export sales are down as a result, but so is cost relating to exports. The difference is a plus for the bottom line for D&G. Marketing cost is one area of major savings as the company no longer picks up that cost in the USA market. Gross margin for local and exports climbed during the nine months period. Local sales grew to $2.67 billion up from $2.56 billion in 2012 and for exports it was $564 million in the current fiscal year versus $450 million, but exports earnings jumped to $530 million after marketing cost, a large improvement over $127 million reported in 2012. General selling and administration cost rose from $906 million to just $938 million for the 2013 period.

DG_logo150X150Local sales climbed 12 percent over the same period in 2012 and was driven by the launch of the new beer, Talawah, a stronger performing spirits portfolio and price increase, the company reported. Local marketing cost increased by $21 million primarily due increased spend to promote and televise Red Stripe Premier League football.

Financial position | The group is in a healthy financial position as the improved results have contributed to cash moving from $230 million in March 2012 to $1.964 billion, after paying $560 million in dividends in December last year. Current assets exceed current liabilities comfortably by almost two to one, borrowed funds were only $157 million.

D&G has in the past stuck to paying out around 80 percent of profits as dividends and if this policy is maintained then the upcoming dividend to be considered this week should be around 30-35 cents per share. With the present price being $4.15 the annual yield will be around 12 percent making the stock very attractive.

Stock outlook | Investor’s Choice’s analysis points to the prospect of potential good growth levels for this company, as the local economy as well those overseas, show improvements in the years ahead. The major risk to this company is any weakness in the economy and potential for government to impose addition taxes on the products. On the positive side, the company is dominant in the local market and is enjoying increased acceptance of the flagship product Red Stripe overseas.

Filed Under: Company News, Company Results Tagged With: ,

More cash for Lascelles’ former owners

May 13, 2013 by

Some 985 former Lascelles deMercado shareholders are once more pretty happy as they received another distribution from their old company. The payout was made through New Transport Group, the company formed to take over the companies that Campari did not acquire when they took over Lascelles last year.

The amount being paid works out at $18.6533 per share of which $13.62 has been paid over, leaving $4.29 left to be paid later. No date was disclosed for when the balance is to be paid.

The former majority holders had arranged that amounts in excess of working capital needs would be paid over by Lascelles to the new company. This distribution is being made under that arrangement.

The directors of the new company indicate that they have engaged experts to advise on the future of the company and that shareholders would be updated at the annual general meeting later this year.

Filed Under: Company News, General Business News Tagged With: ,

JSE: Friday, 10th May 2013

May 13, 2013 by

Scotia companies stock skid

In a lackluster day’s trading, 3.08 million stocks at a value of $33,240,248.40 traded as 11 stocks recorded price gains against only 2 that fell in the ordinary share segment.

Both Scotia Group and Scotia Investments were the day’s big losers, the former down $1.98 to $20.02 with 512,354 units trading and the latter losing $3.08 to close at $23.03 with 324,350 shares trading. NCB gained 30 cents to close at $18.30 with 524,095 shares trading. JP traded 13,001 units and put on 32 cents to close at $15.50, Jamaica Broilers traded 309,318 units up to $4.60, 6 cents more than on Thursday. Kingston Wharves gained 30 cents in trading 12,781 units to close at $6.40 and the highest price for more than a year, Lasco Financial Services traded at an all-time high of $8.10 while Blue Power gained 17 cents to $5.85 on just 4,389 units. Grace continues to pick gains, closing at $55.75, 16 cents more than yesterday, on small volume.

JSEINdicesMay10All the indices of the market fell except the junior market the US dollar market that had no trades and the cross listed index, whereas there were no trades for overseas based companies.

Filed Under: JSE Main Market, Stock Market Tagged With: ,

TTSE: Friday, 10th May 2013

May 13, 2013 by
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TCL dominates, Grace gains

Trinidad Cement (TCL) traded 1,297,434 shares and the price was down 2 cents to 95 cents at the end of trade. Grace Kennedy traded 35,400 units and gained 27 cents to close at $3.60 in the process. There was still unfilled demand at the end of trade at $3.61 but there were no stocks on offer. Angostura Holdings traded 44,800 units at the same price as prior to today. Grace released their first quarter result yesterday and this may have contributed to the price changes.

Trading accounted for 1.4 million units, valued at $2.33 million as two stocks registered price gains and one fell. Ten securities traded for the day.

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Filed Under: Stock Market, TTSE Market Tagged With: , ,

FX: Friday, 10th May 2013

May 13, 2013 by

Buying exceeds selling by US$10m

USD | Trading activity in the currency market was relatively uneventful with the most watched currency against the Jamaican dollar, the US, hardly had any rates change. Authorised dealers bought US$37.5 million and sold only $27.6 million, that is almost a $10 million difference. The average buying rate for US dollars was $98.579 and the currency was sold at $99.0575. Yesterday, the rates were, buying $98.448 and selling $99.051 resulting in a minor devaluation of the Jamaican dollar against the US.

CAD | More Canadian dollars were purchased today than on Thursday. The amounts purchased was CAD$ 1.63 million and selling $885,795. Purchases of Canadian dollars cost more but sellers charged less to offload the currency today.

GBP | Today £960,233 pounds were bought compared to Thursday’s buying of £3,661 million. There was selling of £734,700, far less than the £3.04 million sold on Thursday. The rate of the pound fell in today’s trading with the buying rate off J$2.30 taking it to J$150.45, the selling rate was 46 cents lower.

Yen falls | Elsewhere the Japanese yen crossed aggressively over the 100 barrier and reached just under 102 yen to the US dollar before retreating to 101.61 at the close as the US dollar gathers strength based on what many in the market are seeing as an ever improving economic developments in the United States. The yen has climbed back from a low of 77 to one US dollar last year. The move which many expect to continue will benefit Jamaicans, making imports form that country vastly cheaper than in 2012.

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Filed Under: FX Market, Stock Market Tagged With: , ,

FX: Thursday, May 9th 2013

May 13, 2013 by

Mixed FX market

GBP | The main action was in the trading of pounds sterling on Thursday as buying was up on Wednesday with £3,661 million bought compared to £779, 323 on Wednesday. The rate climbed for buying as it moved up by $1.90 over Wednesday’s price of J$150.832 to the pound. On the sell side, more than £1.56 million were sold than on Wednesday but the price slipped by 14.55 cents. The pound’s lowest buying rate moved down sharply from 130.07 to J$124.09 and was the most pronounced change in rates for the day.

CAD | The Canadian dollar was less expensive on both the buying and selling side as it took, on average, 47 cents to sell to the system but buyers were paying under a cent less for that currency.

USD | Authorized dealers bought US$24 million for 10 Jamaican cents less per US dollar and sold US$23 million for about 2 cents more than on Wednesday. Overall, the market once more traded more currency on the buy side than on the sell side. Sale of foreign currency was also less than the amount bought on Wednesday. Purchases on Thursday were less than on Wednesday and less selling also took place. There were US$9.6 million less purchases in the system and US$10.3 million less were sold than on Wednesday.

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Filed Under: FX Market, Stock Market Tagged With: , ,

Dividends to come

May 10, 2013 by

The Board of Directors of Desnoes & Geddes (D&G) has advised that they will meet on Thursday, May 16, 2013 to consider the payment of a second interim dividend for the year 2013. On the same date the Board of Directors of Pan-Jamaican Investment Trust will meet to consider the payment of a second interim dividend for the year.

If the dividend is approved, Desnoes & Geddes would be returning to the regular practice of paying two dividends per year, which was suspended when the operations was faced with challenges after the global economic crisis took full effect in Jamaica. The company paid 20 cents per share in December.

Pan Jamaican already made a payment of $1.10 cents in March and if the Board approves, it would be the second of four for the year and likely to be $0.50.

The Board of Directors of Dolphin Cove has declared a dividend of $0.10 per share payable on June 6, 2013 to shareholders on record as at May 20, 2013. The ex-dividend date is May 16, 2013. This payment is likely to be the second of three for the year having paid one in March already.

Filed Under: Company News, Dividends Tagged With: , , , ,

Grace looking up

May 10, 2013 by

Grace Kennedy posted increased profits in spite of a one-time charge of $216 million in the first quarter of this year. The charge relates to the write-off of premiums on investments that were swapped in the government debt exchange in February. The improved results flowed from revenues which were up to $16.5 billion in the quarter from $15.85 billion in 2012 and profit before tax $1.14 billion and $689.7 million after tax and minority interest, slightly more than the $652 million netted in 2012.

NDX plunged the banking and finance division into an operating loss of $7 million, down from $209 million in 2012. The trading operations more than doubled operating profit from $22 million to $55 in 2013. All other divisions contributed moderate increases to the groups operating results for the quarter.

Growth markets | Management stated that the food division performed well with improved profit. Jamaica, Canada, Belize and the USA were leading markets for them. Grace‘s international business benefited from marketing efforts with the main focus on consumer acceptance. The focus on newer markets is going well. The west coast of America expansion is on target whilst they have seen gains in shelf space in the UK top retail chains. Lower yields on government bonds have forced shifts within some of the group companies. Other segments within the group will benefit from lower cost of funds as interest rates on some instruments have declined since the NDX.

This year’s results are commendable. If the company can maintain or improve upon the first quarter numbers, earnings for the full year could beat last year’s and the year’s results could come in around $11 per share. The group has also increased the dividend payout to shareholders making the stock a bit more attractive with a 17 percent increase in the last one paid out in March.

Financial position | Grace’s finances are in good health. Assets amount to $104 billion including fixed assets of just $7 billion. Liabilities are $72 billion. Equity capital is $30.7 billion.

With economic growth in the local economy at low levels and likely to be that way for some years, Grace needs to look outside Jamaica for higher growth levels than they have been enjoying having been dominant in most areas that it operates in the local market.

The stock is cheap, selling at around 5 time earnings. Growth has not been great and may not be so for a while, but with the present price between $55-56 per share the stock has lots of room to grow. It is worth a serious look.

Filed Under: Company News, Company Results Tagged With: ,

Who is running the stock exchange?

May 10, 2013 by

The last posting on the stock exchange website for D&G is the release of the December quarter’s results posted on February 8, 2013. The exchange’s web site, on which information should be posted, did not have the release that the company would consider the payment of a dividend at a meeting to be held on May 16. How come a brokerage house had the said information posted on their website on Thursday but the exchange did not until after 9 am on Friday? What is really going on at the JSE? And where is the Financial Service Commission (FSC) in seeing to the orderly running of the capital market?

More questions | Why does the JSE put information about the trading of Proven ordinary shares in the combined trading report but at the same time, leave out the value of trade and the quantity? It makes absolutely no sense. Why should investors have to add the trading data to determine the full extent of a day’s trade? Importantly, why is the combined trading sheet that has the US$ listing as well as the US dollar index, carry the total trade but when checked, the value of trading is not included and nowhere on the report is there a notation that it is not included?

The reality is the stock exchange needs all the positive publicity it can get to interest more persons in the market. But do they see the value in fully informing the public about the total level of trading on the market? Is anyone then surprised that many persons think our market is a joke and prefer to try their luck in shark infested waters?

For example, the trade sheet section with market indices carries a column that is headed “value” and next to it “volume”. One would naturally think the value relates to the dollar value of trades, but not so. It is in fact the the closing indices for the day. The Trinidad Stock Exchange shows the section as closing indices and that seems far more logical.

The problem with our exchange | The executives think they know it best and constantly refer to international best practice for some of what they do. That however, is selective as there are other occasions that they do things when it suits them that are not done elsewhere. What about the users of the information? Should they not get trading reports that meet international best practices?

It’s time they wake up to reality. The question is who will do it.

Filed Under: JSE Main Market, Stock Market Tagged With:

TTSE: Thursday, 9th May 2013

May 10, 2013 by

Witco grabs $2.94 more

Trinidad Cement with a volume of 1,433,143 units valued at $1,395,545.50 while gaining 1 cent in price was the dominant traded stock but West Indian Tobacco stole the show with another record price up $2.94 to close the day at $110.01 on a mere 80 shares that traded for the stock. The stock closed without any on offer, the indication is that the price could go much higher in the days ahead. JMMB traded 157100 units at 50 cents around J$7.80. The stock is trading at $7 in the Jamaican Market. Guardian Holdings traded 47,204 units at $17.50 with a value of $826,070, without any price change, Neal & Massey traded 38,959 units at $59 valued at $2,298,581. Clico Investment fund traded 28.090 units at $21.08 the same price as yesterday with a value of $592,137.20.

TTSEMay9At the close, there were 6 stocks closed with bids that are higher than the closing price. These are Ansa Merchant Bank, Berger, Grace Kennedy, Prestige Holdings, Republic Bank and Scotia Investments. Praetorian Property Mutual Fund did not trade but had a bid of 102,650 shares at $3.40 each. The fund just released results to March 2013 showing a small profit of $164,533 versus $2.8 million in 2012 and a loss of $6.4 million for the year to September 2012. The book value of the fund is put at $5.43 but the entity looks illiquid with less than a $1 million in cash down from $2 million at the end of September last year.

A volume of 1,711,122 shares crossed the floor of the Exchange today valued at $5,054,669.42, as 11 securities traded with 4 advancing, 1 declining and 6 traded firm.

Clico Investment Fund was the only active security on the Mutual Fund Market, posting a volume of 28,090 shares. Clico Investment Fund remained at $21.08. Fortess Caribbean Property Fund remained at $5.00.

Filed Under: Stock Market, TTSE Market Tagged With: ,