Caribbean Producers BUY RATED again

Caribbean Producers reported profit of US$3.54 million or 32 US cents per share for the year to June 2015, versus $3.46 million or 31 cents in 2014, according to the company’s audited financial statements. Sales brought in $86.85 million during the year compared with $79 million in 2014, a gain of 10 percent and for the quarter sales were up just 4 percent over 2014 to $21.86 million from $21 million in 2014 while profit came in at $1.3 million compared with a loss of $613,000 in 2014.
Profit for the latest quarter is 23 percent higher than the $922,000 earned in the March quarter, a period that is usually the highest earner. Earnings per share ended at 32 cents for the year or close to J$3.75.
Gross profit margin jumped in the June quarter to 31 percent and well over the 27 percent enjoyed in the 2014 quarter and higher than the 28 percent for the full year. Gross profit climbed as well by 19 percent to $6.8 million for the quarter much faster than the growth in revenues and was up by 8 percent for the year a bit less than revenue growth. Selling and administrative expenses fell in the quarter, by 15 percent but was up 10 percent for the year.
Profits seem to be moving in the right direction with cost falling in some areas and profit margin improving. At the current price of J$2.50 the stock is undervalued as it should be moving into the J$3 region with these results. The group has been seeing improvement in the St Lucian operations and that could be improved upon in 2016 fiscal year. Caribbean Producers made a profit of $447,000 in the September 2013 quarter but made on $2,500 profit in 2014, the results for this year’s September quarter should be better as 2014 had certain cost associated with new products and the holding of prices for certain items sold to the hotel sector during that period.
The bother continues to be the heavy debt, at $24.76 million which is down from $25.2 million in 2014, while equity is up to $19 million from $16 million in 2014 thus improving the debt to equity ratio quite a bit. The probability exists that there should be an improvement in 2016 as well, as profit continue to perform, thus building up equity.
IC Insider is restoring it BUY RATED stamp on this one.