JSE: C&W gains 213% since January

Cable & Wireless closed trading at 50 cents and in the process recorded a gain of 213 percent since the start of the year. The stock has been scare since before the company released their December quarterly results in mid-February showing a reduced loss in the December quarter flowing from lower cost and improving margins. A reading the recent market activity of closing prices, bids and offers suggests that the price should move higher. There was a bid to buy just 14,570 units at 50 cents and the closest offer to sell is at 64 cents for 350,000 units. The next amount on offer was 1,038,266 shares at $3.50, well away from the last selling price, and a final offer at $9.90 to sell 43,000 units. Other orders to buy immediately below the 50 cent bid are 249,000 units at 48 cents and 235,000 units at 47 cents.

In Monday’s trading on the Jamaica Stock market, prices of 11 stocks rose and 7 declined as 31 securities traded resulting in only 3,194,433 shares trading valued at $20,691,078.

Main Market | The two main indices declined marginally with the JSE Market Index falling by 42.87 points to 76,636.22 and the JSE All Jamaican Composite index moved down 65.02 points to close at 84,224.90.

Gains | 8 stocks recorded gains with Berger Paints trading 2,000 shares to close at $1.85 cents up 5 cents; Cable & Wireless 206,913 units as the price gained 5 cents to closed at 50 cents; Carreras 21,900 units at $35 for a 32 cents gain;  Desnoes & Geddes, 500 shares as the price gained 50 cents to close at $5; Grace Kennedy closed up by $2.25 with 140,861 shares changing hands to close at $58 as investors responded positively to the 2013 full year results; Jamaica Broilers traded 27,466 shares to close at $4.90, a gain of 10 cents; Jamaica Money Market Brokers 8.75% preference share with 100,500 units at $3.05, a gain of 5 cents and Sagicor Group with 67,300 shares at $9 for a gain of 49 cents after it slipped to $8.50 on Friday.

JSEIndicesMar3rdFirm | Stocks in the main market to close without price change are Jamaica Money Market Brokers with 2,080 shares closing at $7.40; Caribbean Cement 86,000 units at $4.80; Jamaica Money Market Brokers 7.50% preference shares with 920,500 units at $2; Jamaica Producers had a mere 671 units trading at $18.26; National Commercial Bank had 15,760 shares trading and closed at $9.49; Radio Jamaica exchanged 30,000 shares to close at $1.35; Supreme Ventures exchanged 50,000 shares at $2.40 and Proven Investments 8% preference shares traded 4,500 units and closed at $5.09.

Declines | Kingston Wharves losing 45 cents to end at $5.55 with 13,500 shares; Scotia Group traded 169,929 units at $20.60 for a 55 cents decline and Scotia Investments had 4,150 units trading at $25.30 at the close for a decline of 60 cents.

Junior Market | The JSE Junior Market Index advanced by 0.65 points to close at 731.06.

Gains | Caribbean Flavours traded 90,854 units to close at $2.50, up 15 cents; Caribbean Producers closed at $2.75 for a 3 cents gain while trading 110,791 units and Lasco Distributors swapped 22,000 shares at $1.35, an increase of 5 cents.

Firm Trades | Stocks trading firm in Monday’s session are Access Financial Services that traded 9,000 to close at $9.10; AMG Packaging with 12,563 shares at $3.55; General Accident with 381,731 units to close at $1.70; Lasco Financial Services 46,201 shares to close at $1.21; Lasco Manufacturing had 377,666 shares changing hands to close at $1.16 and Paramount Trading had 5,000 units trading and closed at $3.20.

Declines | Consolidated Bakeries traded 7,152 units at $1.10, down 5 cents; Caribbean Cream traded at a new all-time low of 75 cents for a fall of 5 cents with 12,445 shares trading and Blue Power with 254,500 shares to close at $9.01 for a 9 cents fall.

IC bid-offer Indicator | At the end of trading the Investor’s Choice bid-offer indicator had 7 stocks with bids higher than the last selling price and 2 stocks with offers that were lower.

T&T take Carnival break

Monday, 3rd March, 2014 | No quite Breaking News as every Caribbean citizen knows that today is Carnival Monday! The Trinidad & Tobago Stock Exchange will be closed until Thursday, 6th March.

Let the road march begin!

Profits down at Scotia

Scotia Group and its subsidiary Scotia Investments reported lower profits for the first quarter ended January this year.

Scotia Group reported net income of $2.54 billion for the first quarter ended January 31, which is $168 million above the previous quarter ended October last year and $104 million below the quarter ended January 31, 2013. Earnings per share (EPS) for the quarter was $0.79 compared to $0.82 for the same period last year.

The Directors maintained the dividend at 40 cents per stock unit payable on April 10.

Total operating income, comprising net interest income after impairment losses and including other revenue, was $8.3 billion, a decrease of $28 million relative to the prior year.

Net interest income after impairment losses for the period was $5.7 billion, down $134 million or 2.30 percent when compared to the same period last year. However, the loan loss expense increased by $234 million to $517 million compared with $284 million with prior year.

scotiabankBuilding150x150As reported by management, “Other revenue for the quarter was $2.56 billion, up $106 million or 4.3 percent when compared with prior year. This was due primarily to increased insurance revenue of $54 million, higher gains on our foreign currency trading and investment book of $36 million and net fee and commission income of $11 million. The increase in the net fee and commission income was due to growth in our mutual funds and unit trust business.”

Operating Expenses were $4.87 billion for the quarter, representing an increase of $237 million or 5.12 percent over prior year. This is due primarily to higher staff related costs of $139 million and operating expenses of $117 million.

Scotia loan portfolio fell in the latest quarter to reached $133.4 billion from $134.8 billion in October last year but is still well ahead of the $122.3 billion at the end of January 2013.

Scotia Investments reported net income for the quarter of $421 million, $66 million or 13 percent below the quarter ended January 31, 2013 and $152 million or 26 percent below the October 31, 2013. Operating Income, comprising net interest revenue and other income of $989 million for the quarter was $119 million or 11 percent below the $1.108 billion for the same period last year; and $230 million or 19 percent below last quarter. Non-interest income, which includes fee income, securities trading gains and net foreign exchange trading income, was $352 million for the quarter, $7 million above the same period last year; and $138 million or 28 percent below last quarter. Net interest income fell to $636 million from 745 million in similar period in 2013 as interest margins contract. Wages grew but other operating expenses fell leaving overall expense in line with that of 2013.

The Board maintained dividend at 45 cents per stock unit, payable on April 10, 2014.

Related posts | Scotia reports record profitProfit jumps 39% for Scotia Invest

Mayberry profit crushed

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Profit fell sharply at Mayberry Investments for the year ending December 2013, falling to $102 million as it declined sharply from $439 million reported in 2012. Earnings per share came out at only 9 cents as profit took a big hit of $337.5 million from the transaction in connection with the Government  National Debt Exchange Programme (NDX) in February last year. Without the NDX charge, earnings per share would have been around 22 cents in 2013.

Mayberry recorded a decline of $238 million in total revenues driven by declines of $112 million in net interest income, $111.4 million in fees and commissions and $42 million in dividend income and $129 million in net unrealized losses on trading portfolio. There were gains on disposal of a small portion of the associated shareholding of $60 million as well as increase in net foreign exchange gains $105 million.

Total expense for the year was 10 percent lower than for 2012 coming in at $681 million for 2013 and flowed from reduction in staff cost of $32 million and reduced provisions of $91 million as the company recovered some loans.

Mayberry_banner600X250Mayberry operating profit fell to $213 million from $374 million in 2012 before the NDX charge due mainly to lower net interest income and losses on investment valuation.

In the final quarter, Mayberry reported only $3 million pretax profit compared with $162 million in 2012 and after booking a tax credit, ended up at $42 million in the last quarter, still lower than the $176 million reported in 2012. In the last quarter, the company suffered from lower net interest income and reversal of credit loss gains achieved in the prior period.

Assets grew by $1.2 billion during the year to $22 billion partly funded by increased liabilities.

Related posts | Mayberry profit bleeds from NDX | Mayberry’s tough year so far

Margaritaville, down the road with risk

Come Monday March 3, the Margaritaville Turks IPO opens to the public with 21,156,555 ordinary shares on offer at a price of 10 US cents per share payable in US dollars. The IPO aims to raise US$2 million through the issuing of 5,260,740 new shares with the company pocketing the net proceeds. The remainder are existing shares being sold by the parent company Margaritaville Caribbean.

If the issue is successful in selling the minimum amount of 13.5 million shares, they will be listed on the main market of the Jamaica Stock Exchange. The company, incorporated in the Turks & Caicos Islands, now has 62,239,259 issued Ordinary Shares to Margaritaville Caribbean. After the issue, it is expected that the issued shares will climb to 67.5 million units and the ownership of the parent will fall 69 percent. The company is a small one with equity of US$3 million but the only debt are amounts due to creditors of $725,000 and current assets of only $841,000.

Value | For the six months to November 2013, revenues climbed by a strong 38 percent to hit $2.74 million with profit more than doubling to $442,000 and should be approximately US$900,000 for the full year to May 2014. For the year ending May 2013, revenues fell to $4.5 million from $4.79 million in 2012 with profits of $598,000 down from $880,000 in 2012.

Revenues were $4.86 million in 2011, $4.3 million in 2010 and $3.55 million in 2009. Profits during this period have not grown in line with revenues, with profit of $842,000 in 2011, $943,000 in 2010 and $1 million in 2009. No doubt the global downturn had a negative impact on the operations. The worsening profit out turn is tied to slipping margins, which was mostly in the 170 percent range between 2010 and 2011 but fell to 143 percent in 2012 and 105 percent in the 2013 fiscal year, and a recovery to 156 percent in the latest six month period as at November 2013. The level in the November quarter slipped to 149 percent.

margaritaville_entranceThe six month earnings to November 2013 work out at 14 cents per share with the PE ratio at 7 times earnings, a bit rich for main market companies. This is like a junior market listing. As such, the valuation is in keeping with those smaller companies.

US$ earnings | As the earnings are in US dollars, many investors may see much more in the IPO than the real numbers suggest. The shares are priced at 2 times book value, which is not out of line with many companies of similar size on the market. In fact, the net book value valuation is below several junior market companies and is selling at roughly one times sales, which seems to be on the high side compared with the majority of listed companies. The above suggests that investors may have to wait sometime for a rich payoff.

There is added risk | For one, the company has managed to cut cost of sales by what it says is “renegotiated price from suppliers” but this cannot go on forever. A positive is that revenues are up in 2013. Income is highly dependent on one location in a small territory, the Turks & Caicos, and continuity is subject to lease arrangements with Carnival Cruise Lines, the only cruise line doing stopovers at that location. The success of the business is highly dependent on visitors coming to the island by cruise ship and the facility is only open on those days that ships are in. In other words, absent the ships, absent the business.

The company appears to have business interruption insurance coverage for a major catastrophe, but it’s unlikely to cover any downturn flowing from less customers going on cruises. This doesn’t seem to be a problem in the short run with the increased revenues generated to date and the promise of increased visitors in 2014, but could occur at any time.

The Directors are planning to roll out a new Margaritaville menu early in calendar year 2014, which aims to increase average consumption per customer. The Directors also anticipate growth in the Company’s revenues in future, given the following factors:

  1. A continued increase in the number of ship calls to the Grand Turk Cruise Centre destination.
  2. Increase in the number of passengers visiting the Cruise Centre. Data received from the Carnival Corporation show an estimated 750,000 passengers sailed to Grand Turk and the number is expected to reach 1 million in calendar year 2014 based on pre-bookings.
  3. The addition of 4 new bars, and the upgrading of existing bar outlets, the addition of a new revenue centre with introduction of the new casual “Grab N Go” convenience dining concept, the opening of the South Beach Bar and Grill, which the directors anticipate will provide an alternative option for passengers who prefer a more sedate dining environment to that of the Company’s main restaurant, Margaritaville.
  4. The expected improvement of the Company’s average customer spend resulting from upgrading of remote point of sale (POS) system introduced in calendar year 2013, that facilitate the order process for customers’ convenience.

The Company is a part of the Margaritaville Caribbean Group and a wholly owned subsidiary of Margaritaville Caribbean. The Group operates the Margaritaville chain of restaurants in various Caribbean destinations, inclusive of the flagship restaurant in Montego Bay. The IPO listing will only offer shares in the Grand Turks-based cruise pier operation.

The stock may not take off big time in the short run, but it provides a means for investors to diversify their portfolios if they are prepared to accept what appears to be higher risk.

GOJ deficit up in January

Government spent more in January than originally budgeted and collected less than projected to wipe out the projected $761 surplus originally budgeted, ending up with a deficit for the month of $3.274 billion. At the end of January, the year-to-date deficit is at $22.9 billion, just $2.65 billion less than the amount budgeted.

The revenue for the month was short of the $31.37 billion budgeted by $820 million. Capital expenditure exceeds the budget of $3.53 billion in the month by $1.45 billion coming in at $4.98 billion. However, capital expenditure is still running $7.6 billion below budget for the year to January.

The budget projected a shortfall of $2 billion in February and $19.5 billion surplus in March. The latter is in keeping with historical pattern with the last month of the fiscal years realizing a surpluses. If the budget is achieved for the remaining two months of the fiscal year, the fiscal deficit will come close to being wiped out and would have been reduced from $54.6 billion.

For the 10 months to January, tax revenues fell short by $13.2 billion and non-tax was below budget by $3.6 billion and recurrent expenditure was down $14.4 billion from budget. Interest cost was lower by $3.9 billion and other recurrence expenditure by $6.8 billion.

GSE: Ghana market slips first week

Ghana Stock Market closed with an overall decline for the week as both the main index and the financial index declined for the first time this year.

The Ghana Stock Exchange Composite index shed 18.29 to close at 2,420.91 and the GSE financial stock index closed down by 33.91 to 2,168.26 as 5 stocks advanced and 9 declined. The declines have not dented the year-to-date gains much with GSE Composite Index up 12.85 percent for the first two months of the year and the GSE financial stock index gaining 21.36 percent.

GSE28thFebThe market still lacks adequate participation with bids in for just about half of the listings, a factor that has been present from 2013. Volumes have been declining for February with just over 1 million units trading this week, down from 2,676,472 units in the prior week, $3.6 million units in the week ending February 14 and 5.2 million in the first week of the month. This week’s volume is the lowest since the start of the year.

Main Advances | Sic Insurance up 13 percent and Mechanical Lloyd up by 3 percent for the week.

Main declines | The stocks that declined most during this week are Ghana Oil off by 9 percent, Ghana Commercial Bank down 8 percent, Benso Oil Palm Plantation fell by 4 percent, Cal Bank down by 5 percent and Trust Bank 4 percent.

For the year to the end of February, there were 9 stocks with gains between 9 and 57 percent and 6 that declined between 11 and 29 percent.

Blue Power profit slips

Blue Power profits slipped for the quarter to January this year as the profit margin got squeezed resulting in profit of $15 million compared to $23 million in the same period in the previous year. The Lumber Depot division contributed under $8 million and the Blue Power division added just over $7 million to the profit.

Profits for the nine months stood at over $70 million compared to $67 million in the same period last year, an increase of just over 5 percent. The contribution of Lumber Depot division was over $37 million, while Blue Power division added $33 million.

Earnings per stock was $1.25 for the nine months compared to $1.18 in the previous year.

Sales for the nine months ended January, 2014 were $780 million compared to $706 million for the same period last year, an increase of $74 million or 10 percent. For the period, sales for the Lumber division amounted to $543 million versus $466 million the previous year, an improvement of 16 percent while Blue Power soap division remained basically flat with sales of $237 million against last year’s $239 million.

Sales for the quarter ended January this year were $259 million versus $266 million for the comparative period in 2013. For the third quarter, Lumber Depot division achieved sales of $176 million versus $178 million the previous year, while Blue Power moved down from $88 million to $83 million.

BluepowerclotheslineReasons for fall | “Small declines in sales in both divisions reflect the tightness in the economy, which is being experienced by our customers, and which has also resulted in downward pressure on prices and margins. Our response to these challenging economic circumstances is to focus on keeping, as much as possible, a lid on price increases, reducing costs especially by investing in solar technology, improving packaging and quality to get greater market share, introduction of new products and bulk-buying to obtain better prices.” the company’s management stated in their release to shareholders.

Blue Power was able to hold administrative cost slightly below that of 2013 at $34.5 million for the January quarter. In 2013, cost in this area was $35.7 million and in the nine months $99.4 million, which fell to $96.8 million in 2014.

Other revenues almost doubled from $5.7 million to $10.8 million for the nine months and helped to keep profits up.

Margins | Gross profit slipped to 22.17 percent in the latest quarter from 28 percent in the 2013 period and ended pulling down the year-to-date margin to 25.54 percent compared to 30 percent enjoyed in 2013 and 28.6 percent in the full year to April 2013.

It is quite likely that with government slashing the fiscal deficit from $54 billion in 2013 fiscal year resulted in increased tightness in the economy. Much of the measures that led to the wiping out of the fiscal deficit would have been increased taxes and a sharp cut in interest cost. There is no new tax take for the 2014/15 fiscal year and the economy should be freer to function with some amount of growth. As such, the environment should start to look better in the latter part of this year for companies such as Blue Power.

Finances | The company’s finances are in a very healthy state with no borrowed funds and working capital increasing to $356 million from $302 million at the end of April 2013. Cash funds on hand amounts to $133 million. Amounts due to creditors is only $59 million. while receivables amounts to $77 million but inventories are at $203 million up from $177 in April 2013.

Stock outlook | At the time of writing, the stock was in strong demand by one broker at the $9 level. The weakness shown in the latest quarter sends cautionary signals which may be temporary. We see the current quarter continuing to reflect some of the weakness of the January quarter and we are forecasting earnings of $1.50 per share for the year ending April 2014 and $1.80 for the 2015. We leave the stock as a cautious Buy Rated around the $9-10 region based on the tendency for limited supply and strong current demand for it.

Related posts | Blue Power profits continue up  | Blue Power profit up 20%

JSE: 11 Declining stocks & 12 gained

Wednesday, 26th February 2014 | Trading on the Jamaica Stock market resulted in the prices of 12 stocks rising and 11 declining as 30 securities traded totalling 11,939,265 shares valued at $66,143,847.

National Commercial Bank. after trading $140,618,525 or 88 percent of the value of stocks on Tuesday, was the dominant again with $37,273,344 or more than half the value of stocks traded today.

Main Market | Nine companies in the main market advanced and 9 declined as the indices moved up marginally with the JSE Market Index up by 56.34 points to 79,208.99 and the JSE All Jamaican Composite index moved up 85.45 points to close at 84,045.57.

Gains | Stocks recording gains are Cable & Wireless, trading at a new intraday 52 weeks high of 41 cents, closing at 40 cents for another closing 52 weeks high of a one cent gain while trading 1,519,531 shares; Caribbean Cement closed at $4.80 as the price gained 10 cents with 65,916 units changing hands; Carreras traded only 600 units to close up by 40 cents at $35; Grace Kennedy had 5,150 units trading at $55 at the close with a 43 cents rise; Jamaica Broilers contributed 10,371 units as the price inched up 2 cents at $4.92; Jamaica Money Market Brokers 8.75% preference shares put on a cent to close at $3.01 with 349,400 units; National Commercial Bank had 1,960,431 shares trading at $19.01 at the close by putting on a cent; Pan Jamaican Investment had only 850 units trading as the price gained 74 cents to end at $48.80 and Scotia Group traded 264,133 units at $21.10 for a 53 cents gain at the end of trading ahead of the release this Thursday of the groups’ first quarter results to January.

JSEIndicesFeb26Firm | There were only two stocks in the main market to close without a price change. Desnoes & Geddes with 831,517 shares at $5 and Mayberry Investments with a mere 2,652 units at $1.90.

Proven Investments 8% preference shares traded 79,320 units and closed at $5.09.

Declines | The number of stocks that declined increased over Tuesday’s trading with Berger Paints losing 5 cents to end at $1.80 with 18,999 shares; Ciboney with 4,000 shares lost 4 cents to close at 6 cents; Hardware & Lumber 4,400 shares traded at $8, a decline of 20 cents; Jamaica Money Market Brokers with 16,267 shares lost 3 cents in closing at $7.45; Radio Jamaica had 3,100,000 shares changing hand and resulted in a 24 cents fall to $1.36; Sagicor Group 11,995 shares closed down 20 cents at $8.80; Sagicor Investments traded just 1,800 units and lost 90 cents in closing at $17.10; Scotia Investments lost 25 cents to close at $25.25 while trading 7,500 units and Seprod with 304,000 units lost 8 cents and closed at $10.92.

Junior Market | The JSE Junior Market Index declined by 2.16 points to close at 742.00 as 9 stocks traded with 3 advancing and 2 declining.

Gains | AMG Packaging traded 1,919 units to close at $3.55, up 5 cents; General Accident with 9,400 shares traded resulting in the price moving up 5 cents to $1.75; Paramount Trading put in 1,000 shares to close up 12 cents at $3.

Firm Trades | Derrimon Trading traded 1,670,000 units at $2.50; Lasco Manufacturing 338,154 shares at $1.20; Lasco Financial Services 10,000 shares at $1.30 and Honey Bun 5,500 units at $3.05.

Declines | Blue Power traded 251,000 units at $9.01 down a cent and Lasco Distributors had 1,093,460 shares changing hands at $1.30, off by a cent.

IC bid-offer Indicator | At the end of trading the Investor’s Choice bid-offer indicator had 5 stocks with the bid higher than the last selling price and 2 stocks with offers that were lower.

TTSE: 2 new 52 weeks high

Wednesday, 26th February 2014 | The Trinidad Stock market had two new 52 weeks highs in One Caribbean Media and Unilever stocks at the close of the market.

Overall there was trading in 15 securities of which 5 advanced, 3 declined and 7 traded firm. Trading accounted for 67,234 shares carrying a value of $2,245,979. First Citizens closed trading with an offer to sell 23,444 shares as low as $38 even as the last traded price was $38.43. The bid was for a mere 526 units at $37 suggesting there may be a sharp pull back when next it trades.

At the end of trading the Composite Index gained 0.48 points to close at 1,193.07, the All T&T Index declined by 0.09 points to end at 2,003.44 and the Cross Listed Index advanced by 0.13 points to close at 50.25.

Gains | Stocks trading with price gains at the close of the market are Angostura Holdings with 990 units at $10.76 as the price inched up a cent; Clico Investment Fund in posting a volume of 19,175 shares valued at $413,207, the price advanced by 4 cents to end at $21.55; National Commercial Bank 1,000 shares at $1.17 for a gain of 2 cents; One Caribbean Media 500 shares to close up by 19 cents at $19.50 and Unilever Caribbean gaining 40 cents to end the day at $57 while trading 500 shares.

TTSEFeb26Firm Trades | First Caribbean International Bank added 3,711 shares valued at $24,120 in closing at $6.50; Jamaica Money Market Brokers had 13,700 shares changing hands for a value of $6,850 and closed at 50 cents; National Enterprises traded 10,177 shares for $185,730 to close at $18.25; Neal & Massy had 1,738 units to close at $66.25; Scotiabank exchanged just 2,254 shares at $72.53; Republic Bank swapped ownership of  2,100 shares in closing at $117.50 and West Indian Tobacco contributed 6,089 shares worth $718,502 with the price closing at $118.

Declines | ANSA McAL traded 3,000 shares at $66.50, down by a cent; First Citizens traded only 200 shares to close down by a cent at $38.43; Prestige Holdings fell 8 cents to close at $9.30 while trading only 100 shares.

IC bid-offer Indicator | At the end of trading the Investor’s Choice bid-offer indicator had 3 stocks with the bid higher than the last selling price and 6 stocks with offers that were lower.