Carreras gives 15.3% return

Carreras Limited has declared an interim dividend of $1.30 per share and a special dividend of $0.94 per share payable on June 20, 2013 to shareholders on record as at June 6, 2013. The ex-dividend date is June 4, 2013.

This latest dividend brings the total paid since June last year to $7.64. Shareholders who bought shares around the $50 level when Lascelles sold a block of the Carreras shares last year, have enjoyed a 15.3 percent dividend income return. The stock closed today at $60, making a total gain of 35 percent within a year.

Carreras paid an interim dividend of $1.40 per share and a special dividend of $1.20 per share on March 13, 2013, an interim dividend of $1.30 per share was paid on December 11, 2012 and another of $1.50 per share was paid on August 23, last year.

C&W: Less jobs, more capital spend

As the Cable & Wireless worldwide operations strive to adjust to changes in market forces and consumer demand, the group has been undergoing changes. Within the Caribbean region, stiff completion and tight economies as well as changes in the way people communicate have forced changes in their businesses in the region.

In an effort to improve results for the future, Cable & Wireless Caribbean incurred net exceptional items (excluding impairments) of US$50 million relating to redundancy and restructuring programmes in the Caribbean. The prior year charge of US$66 million was primarily in respect of restructuring activities in The Bahamas and Panama.

What about Jamaica? |  Cable & Wireless Caribbean incurred US$26 million as an exceptional charge for cash payouts for redundancy and restructuring programmes. This charge was related to Jamaica and the eastern Caribbean but our calculations suggest that the bulk relates to Jamaica. Cable & Wireless Jamaica had indicated that it was making 300 persons redundant earlier this year and outsourcing the field force technician services to Erickson. The redundancy charge will wipe out any hope that may have existed for the Jamaican operation to return to profit in March 2013. In addition, the Jamaican operation would have picked up a large exchange rate adjustment charge on its foreign currency denominated debt. The stage should, however, be set for it to return to profitability in the 2013/14 year.

cable-and-wireless280x150There was also exceptional impairment and depreciation charge of US$86 million in the year ended March 2013. This was mainly due to the difficult environment in the Eastern Caribbean. The prior year charge consisted of a non-cash impairment and accelerated depreciation charge of US$244 million primarily due to poor financial performance in Jamaica.

Capital spend continues | C&W continues to spend on capital improvements within the Caribbean basin which includes Panama. Capital investments continued to be in 4G/HSPA+ mobile data networks supporting smartphone sales in Panama, The Bahamas, Barbados, BVI, St Lucia and Cayman, selective pay TV investments, and improvements to the fixed broadband network. These fixed broadband investments include continuing the fibre roll-outs in the Caribbean and completing the Next Generation Network in The Bahamas. They have also pursued strategic investments in transmission capacity and cable systems to support both retail and carrier sales asa well as advancing billing and customer relationship management systems.

They have completed the second year of investment in the Bahamas having invested around US$100 million in capital projects during that period.

C&W Caribbean still restructuring

The Caribbean contributed revenue of US$1,120 million to Cable & Wireless Worldwide revenues in the year ending March 2013. The revenues for the region were down 4% on the prior year.

Mobile revenue of US$527 million was down 1% on the prior year driven principally by lower average rate per unit (ARPU). Subscriber numbers were broadly flat on the prior period with a 16 percent growth in Jamaica following regulatory changes which enabled improved competitive positioning, stimulating subscriber and usage growth offset by churn in the Eastern Caribbean. There has been sustained growth in mobile data usage following the launch of high-speed networks in a number of islands during the year and the Company plans to expand on this where commercially viable.

Broadband & TV | Revenue fell by 2% to US$120 million for broadband & TV operations. LIME TV was launched in Barbados during the year and over 3,000 customers have signed up subscriptions to date with plans to roll out IP based TV services to a number of islands in the coming year.

cable-and-wireless-cables150x150Fixed voice revenue at US$290 million was 10% down compared to the prior year. Voice substitution continued across the region, although the ARPU and revenue decline this year was mainly influenced by Jamaica where regulatory changes and the introduction of a special telecommunications tax led to lower revenues. Enterprise, data and other revenue at US$183 million was down 7% on last year due principally to a lower level of cable capacity sales in the period.

Gross margin | Operating costs were 5% down compared to the prior year at US$578 million. Across the Caribbean, the Company has embarked on targeted cost reduction programmes to improve efficiency and build a sustainable operating base. During this year, staffing headcount has reduced by 12% to 3,421 and there was further outsourcing of field force technician services in Jamaica. Much of the improvement came from the Bahamas business which has seen a full year’s benefit of the restructuring undertaken following acquisition of the company in 2011.

What about C&W Jamaica? | Read IC Insider’s ‘C&W: Less jobs, more capital spend

TTSE: Wednesday, 22nd May 2013

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No aggression in trades | Market activity continues to meander along as traders nibble away at prices with very little changing from day to day. Wednesday’s trading session was no exception as price changes on the Trinidad & Tobago Stock Exchange were again moderate with the highest gain being 12 cents for Scotia Bank and the highest loss was 5 cents for Point Lisa Industrial Port Development.

There was trading in 16 securities of which 7 advanced, 4 declined and 5 traded firm. Main market volume was 665,031 shares valued at $6,596,902.44. Point Lisas Industrial Port Development Corporation traded 349,209 shares for a value of $1,239,942, followed by Angostura Holdings with a volume of 207,100 shares traded for $1,863,900, while ANSA McAL added 30,446 shares valued at $2,046,580. Clico Investment Fund traded 6,860 shares for a value of $109,332.

An indication of market sentiment is to be found in the both the advance/decline ratio which has been positive for several trading days as well as in the number of stocks closing with bids above last selling price or the offer below the last selling price. At today’s close there were 5 stocks with bids higher than the last selling price and 4 with offers below. One stock traded at a new 52 weeks high.

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FX gains boost Kingston Wharves

Revenues for Kingston Wharves were up 42 percent for the quarter ended March to $1.17 billion. The amount includes $148.86 million or a 91 percent increase in interest income and a large amount of foreign exchange gains flowing from changes in the Jamaican dollar value for assets denominated in United States dollars, as well as a 38 percent increase in transshipment and domestic container movements.

Port revenues | Increased revenue and cost saving initiatives implemented by the group contributed to positively to the profit performance for the quarter. Revenues for port activities were $999 million up from $804 million for the similar period in 2012, an increase of $195 million or 24 percent. A combination of volume increases and the impact of the declining value of the Jamaican dollar are factors that contributed in a major way to the results.

Profit | Operating Profit increased 142 percent for the first quarter, moving from $155 million in 2012 to $374 million. Profit attributable to stockholders was $153 million compared to $65 million for the same period in 2012. Earnings per stock for the first three months was 10.63 cents compared to 5.90 cents for the corresponding period in 2012.

KingstonWharves150x150Without the gain from the movement of the local currency, profits for the quarter would have been much lower, which is something for investors to bear in mind in considering the company’s stock as an investment. The stock is now selling for more than 17 times this year’s likely earnings, well ahead of other companies on the market presently.

Management stated the group will be making substantial long term investments in order to participate fully in the Kingston port expansion. During the quarter, the first phase of the initiative aimed at the expansion and improvement of the range of services offered was implemented. These include steps to acquire container handling equipment and provide stevedoring services for a new client.

Financial strength | Kingston Wharves is in a healthy financial position with borrowings of $2 billion and equity of $12 billion. The group has $3 billion in cash which will be used in the expansion and modernization of the operations in preparation for increased business when the expanded Panama canal opens.

Seprod’s dividend consideration

The Board of Directors of Seprod Limited will meet to consider the payment of a dividend at a meeting scheduled for June 3, 2013. The company last paid a dividend amounting to $0.30 per share on November 9, 2012. Prior to the November payment the company paid a dividend of $0.53 per share on August 7, 2012.

Seprod recently reported profits for the first quarter of this year that was down on the similar quarter in 2012. Profit after tax profit slipped to $231 million compared to $292 million in the 2012 first quarter.

For the last IC Insider report ‘What’s really up at Seprod‘, Click here

JSE: 38m shares for IPO

The Jamaica Stock Exchange (JSE) is to issue 28 million shares to the public during this quarter and have the total share capital listed in the exchange thus confirming what IC Insider reported last week.

In a release to the public, the JSE stated that the Shareholders of the Jamaica Stock Exchange have given their approval to list the ordinary shares of the Company on the local equity market via an Initial Public Offer (IPO). The Company will offer, by way of Subscription, 28,050,000 new ordinary shares equal to 20% of its ordinary shares to the public. Upon completion of the sale, the Company will apply for its shares to be listed on the JSE. The Company expects to make the Offer to the Public in the 2nd Quarter of 2013.

An additional 10,200,000 existing ordinary shares will also be available for sale to investors, bringing the total ordinary shares available to 38,250,000 units. This means that the JSE has split the existing 28 million ordinary shares into 140 million units. It appears that existing shareholders will be selling off some of their holdings to the public at the same time. The JSE did not indicate the likely price the issue will be coming to market at.

jse_logo150x150According to the Chairman of the JSE, Donovan H. Perkins, “The Board of the Exchange has approved the listing of its shares to allow the public to participate in the success of the JSE. We think it appropriate that the very entity that is supporting and seeking to expand the capital markets, should also participate in these markets.”

Marlene Street Forrest, General Manager of the JSE also added that, “with the green light given by the shareholders, this is a natural and positive progression of the organization as it is another step in the direction towards maximizing shareholders’.

The issue could come to the market at a time when trading interest would have reached new heights than a few months ago.

FX: Tuesday, 21 May 2013

Buying exceeds selling | Trading in the foreign exchange market saw the equivalent of US$33.2 million being purchased and US$30.05 million were sold.

USD | The selling rate for the US dollar, however, slipped from Monday’s close to end at J$99.036 as US$28.5 million were sold and US$30.4 million were bought at J$98.4952, slightly lower than Monday’s buying rate of J$98.428. The highest selling rate for the US dollar remains over J$104 while the lowest is at $81.16 and the highest buying rates ended at J$99.17 and the lowest JS$81.33.

GBP | Sale to authorized dealers of pound sterling amounted £1.34 million at an average of J$148.51 (Monday was J$147.63) while dealers sold £0.64 million at an average of J$150.74 compared to Monday when it was sold at J$151.36.  The Pound was sold at a high of $156.92 and a low of $146.45, the highest buying price was J$151 and the lowest buying was at J$121.72.

CAD $ | Can$0.673 million were bought at an average of J$94.54 lower that the J$94 it averaged out on Monday. The amount sold was Can$0.337 million at an average rate of J$97.07 lower than Monday’s rate of J$96.3. The Canadian dollar was bought at a high of J$96.80 and a low of $77.44 and was sold at a high of J$99.83 and a low of J$92.40.

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Consolidated Bakeries’ Q1 Profits Up

Consolidated Bakeries, producers of the well-known Purity brand of baked products, reported profit before tax for the March quarter of $14.2 million, 58 percent more than the corresponding period last year. Profit after tax jumped by 216 percent but the company is unlikely to be paying any taxes for the next five years under the junior market tax incentive. Revenues grew to $172 million, an increase of $32 million or 23 percent over the same period last year.

Management indicated, in a release with the quarterly results, that all key product lines grew during the quarter. Whilst revenues climbed 23 percent gross profit of 38 percent in 2012 fell to 37 percent in the quarter, and the growth in gross profit, was up 18 percent year over year. Operating expenses grew by just under 12 percent. Going forward, the company says they will accelerate operational improvements to combat increased input costs.

These developments sound great. The concerns that investors must be having is that last year’s results for the first half looked good and then, what seemed like a sudden shock, the company announced earnings of a mere $3.7 million, well below the amount reported for the 2012 first half and lower as well than the full 2011 earnings of $12.8 million. Will the market get another surprise? That is difficult to say. Management did indicate that they took a deliberate decision last year to slow production whilst attempting to get their processes right.

Consolidated_Purity150x150The company was listed on the Junior Market of the Jamaica Stock Exchange in December 2012 with the stock price trading as high as $2.05 but declined to 90 cents after the poor 2012 results were released in March.

The company completed the conversion of the tracking of routes to a computerized hand-held system which facilitates better tracking, monitoring and management of the company’s distribution process, thereby reducing costs and improving sales. Their efforts to improve operations continued with additional adjustments to the  processes and plant organization, including the appointment of both an experienced warehouse and loading manager. As a consequence, the first quarter saw significant improvements in quality and products.

The company continued exports to three overseas markets, and gained additional listings and space with independent retailers, and significantly, a major retail chain in the North America.

Current assets increased to $202 million from $96.8 million over the same period last year, primarily due to the growth in receivables of $32 million and investments and other cash equivalents by $64 million. Current liabilities increased from $69 million to $89 million at a slower pace than current assets due to the capital injection from the IPO in December last year. Consolidated has equity of $485 million, well in excess of loan funding of $48.5 million.

Management stated, “In the coming months we will build on and continue the internal changes of the first quarter, starting with additional branding and our route to market programs. We will be adjusting and or replacing equipment to our production line of single serve and bread products, at the same time increasing exposure and awareness of our brand.”

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TTSE: Tuesday, 21st May 2013

Trading on the T&T Stock Exchange continues with a number of stocks recording moderate activity and price changes as has been the case for a number of trading days from last week. At the end of trading, 12 securities changed hands of which 3 advanced, 4 declined and 5 traded firm on a day when the volume of trading was low at 364,642 units.

The main market saw a volume of just 332,774 shares trading, valued at $10,791,913. Prestige Holdings had 147,500 shares changing hands for a value of $1,379,125, followed by ANSA Mcal with 111,500 shares traded for $7,495,030. Angostura Holdings contributed 23,100 shares with a value of $207,900, while 17,000 shares for National Flour Mills traded valued at $13,700. Clico Investment Fund traded 31,868 shares valued at $670,276 as the price advanced $0.02 to end at $21.03.

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