Investors should be keenly watching development at Jamaica Broilers. The company recently, advised the Jamaica Stock Exchange that senior management and directors purchased a total of 7,854,620 shares on August 15 and a Director purchased 237,500 shares on August 14, 2014.
The total cost of these trades would be in the order of $36.5 million. More significantly, there has not been any trade of this magnitude for years by insiders.
The trades may be carrying coded messages to the wider investing public as to what may be happening to profit. On July 30, this year, a director sold 500,000 shares, and a director purchased 574,651 of the company’s shares on March 28 and back in 2013 a related party sold 1,500,000 of the company’s shares to another related party on November 14.
A check with the Jamaica Stock Exchange shows the only other year recently that there was major trading in the stock by insiders was back in 2012, when seven Senior Managers purchased a total of 8,774,697 of the group’s shares on September 14.
The other times of major buying of the stock by managers and directors, was between April 2006 and April 2008. The trades in late 2007 triggered some outcry by investors which led to the company making a public statement in connection with the trades.
At the time of major trading of the shares by insiders in 2007, the company released a report to the Jamaica Stock Exchange around October 4, which stated that “Shares in Jamaica Broilers Group were traded by some directors and senior management in September 2007 during the time window which is allowed by the Jamaica Stock Exchange providing there is no material event requiring disclosure. We wish to State unequivocally that, when these shares were traded, there were no inside knowledge of any circumstances that were no available to the general public.
When these trades took place the company was of the view that – based on a sale contract with affixed selling price – good results would have been realised for the second quarter, irrespective of the reduction in world market prices for fuel graded ethanol.”
IC Insider projects that profits for the current year should hit a record $1.25 per share or $1.5 billion up from 79 cents per share or $950 million for the year to April 2013. The next set of results are due around the 8 of September and will be for the first quarter to July.
Watch this one – Big inside trades at Jamaica Broilers
Jamaica’s Inflation jumps for July
The inflation rate for July 2014 jumped by 1.4 percent, the highest rate recorded since September 2013, the Statistical Institute of Jamaica (Statin) reported.
According to the report put out by the body charged by the Government of Jamaica with data collection, Statin, “contributing to the rise in inflation, were increases in the cost of some agricultural products as the drought affecting most of the island, resulting in a shortage in supply. The highest weighted division ‘Food and Non-Alcoholic Beverages’ increased by 2.0 percent with the classes ‘Vegetables and Starchy Foods’ moving up by 6.3 per cent and ‘Fruit’ by 5.8 percent.”
Since the start of the year the monthly inflation rates are Feb 0.1 percent, March 1.1 percent, April, negative 0.3 percent, May 1.0 percent, June 0.1 percent and July 1.4 percent. The movement in the index up to June this year is for an inflation rate of 2.5 percent, with the July included, the year to date is now at 3.9 percent. The impact that drought is said to have on the rate could subside in the latter months of the year thus allowing food prices to moderate and bring down the monthly rate of increase going forward.
Massy Holdings rebranding cost TT$59M
Trinidad based, Massy Holdings rebranding and change of name, from Neal & Massy Holdings, to Massy Holdings has cost the group TT$59 million according to information included in the group’s nine months results to June.
The amount helped pulled the net profit for the quarter below that of the similar period in 2013, from $128 million to $99 million. Most of the companies within the sprawling group now carry the Massy name except in Guyana and St Lucia, the company stated in their report to shareholders.
The company’s former name came out of the merging of two companies operated by their founders, Harry Neal and Charles Massy that carried the individual names which were combined to form Neal & Massy. According the group’s 2013 annual report “In 1933, rising to the challenges of survival and growth, two entities concluded an historic merger, and became one – Neal & Massy Engineering Company Limited. They were responding both to world economic conditions of the Great Depression, and to the promptings of shrewd local bankers.”
According to information accompanying the nine months results, half of the rebranding cost relates to signage and painting for all Massy buildings, many of which were due for a face lift. The rest of the cost relate professional services training materials, advertising and events.
C2W Music reports 1st profit
Start up C2W Music is reporting its first quarter of profits since it was listed on the junior market in 2012. The company that had chalked up losses in each quarter since listing, shows a profit of US$16.6000 for the June 2014 quarter, in its latest release of results.
The company booked copy right income of US$30,000 in the quarter and royalty of only US$189, but with administrative expenses of $12,193 and finance cost of US$1,396 the income was enough to leave a surplus for the quarter. This compares with a loss of US$157 million in the 2013 quarter. For the six months to date, losses are down to $66,000 versus $346,000 in 2013. Is this the light at the end of the tunnel? Management seems to think so as the quote to shareholders show below suggest.
“The Company negotiated an extremely strategic joint venture music publishing deal with one of our songwriters and an extremely successful music publisher, Rebellion Corps/Notting Hill Music. In this joint songwriters and an extremely successful music publisher, Rebellion Corps/Notting Hill Music. In this joint venture, they will help us in securing homes for more of our copyrights, which will result in increased revenue for the Company. The Company continues to work closely with the Caribbean Performing Rights Societies to recognize our rightful revenue, as their new royalty distribution systems are now in place. The Company continues to exploit our own catalogue and continues to have success in this area. We are also proud and happy to know that the Maxi Priest album is doing very well with two of our songs on the album, and the Etana album is heating up to be a success story also,” Ivan Berry the company’s CEO stated in commenting on the results.
At the end of the quarter, the company had equity of only US$34,000 having racked up net losses of US$1.25 million, loans of $75,000 and cash of only $2,000.
Big jump in RJR Q1 profit (BUY RATED)
Radio Jamaica’s (RJR) profit for the first quarter to June jumped by 829 percent to $15.2 million up from only $1.6 million in 2013. The bottom-line improvement came from an increase of 7 percent in revenues for the June quarter, to $507 million.
Revenues from operation actually rose by 10 percent but a fall in other income from $35 million to $21 million, pulled the overall revenue gains down. Gross profit grew 27.6 percent to $272 million and gross margin hit 127 percent in the quarter, up from 94 percent in 2013. The improvement came primarily from new revenue streams outside of Jamaica in the Caribbean region, Management stated in their commentary on the results as well as shared sporting activities and some cost reduction in the cost of covering sports.
Operating expenses climbed 11 percent in the 2014 quarter over the 2013 quarter, to hit $268 million. The audited accounts showed gross profit margin of 35 percent for the last fiscal year to March. For the twelve months to March this year, RJR made profit after tax of just $59 million, having just breaking even on its main operation. In 2013, the group made a loss of $77 million before taxation and $30 million, after recording a tax credit of $47 million. The group would have benefited from increase sponsorship and advertising income emanating from the broadcast of the world cup football on radio as well as the staying of commentary on Television. As such some of the improvements in both revenue and profits may not repeat any time soon. What seems of import is that the worse seems behind them now and with prospects of an improving economy ahead, added revenues should flow mostly to the bottom-line as most cost are substantially fixed. The stock is now accorded a BUY RATED rating.
IC Insider is forecasting $131 million or 35 cents per share earnings in 2015. They should generate gross cash of $250 million for the full fiscal period which should a far way in reducing their indebtedness.
On the negative side cash is down from $155 million in March this year to $113 million and receivables is up to $456 million from $370 million and borrowings are stable at $246 million.
Seprod added, others now BUY RATED
Seprod is added to the BUY RATED list for the first time, as profit seems to be settling down with reduced losses in the sugar production operations. The PE for the stock is currently at 4.4, with an eye on 2015 when results should get even better.
Radio Jamaica is now elevated to BUY RATED list, from market watch, based on a big improvement in the first quarter results, to June and IC Insider’s forecast for earnings of 35 cents per share for the fiscal year. The stock is trading at $1.22, giving it a very attractive PE of 3.
Cargo Handlers third quarter results is up on 2013, putting earnings in 2015 in the $3.40 per share level and close to $3 per share for 2014 fiscal year, to September, putting the PE at 5. Berger Paints Jamaica is moved to the BUY RTAED list, with gains in its first quarter results, to June and IC Insider forecasting of 43 cents per share earnings, for the year to March 2015. The prices of Consolidated Bakery, Caribbean Flavours and Paramount Trading, have all pulled back sharply from earlier levels making them more attractive buys.
Supreme Ventures and Jamaica Stock Exchange are added to the Market Watch list. The latter is based on a virtual wipe out of losses in the June quarter and an eye on the stock market activity that should be picking up going forward and thus enhancing the earnings and the value of heightened trades.
Cable & Wireless is still on the list with good top line growth, coming mainly from strong mobile growth. The company is heading for a break even position or small profit for the current fiscal year. Supply of the stock is low and a big payoff should take place in 2015, if the present trend in revenue continues.
Derrimon largest owners of Caribbean Flavours
Derrimon Trading Company Limited (Derrimon) acquired 49% of the issued shares of Caribbean Flavours and Fragrances (CFF) from its previous majority owners, Anand and Joan James.
The share transfers of two blocks of 22,030,408 shares each, were executed through the Jamaica Stock Exchange on August 5, to effect the transfer to Derrimon for J$121,167,244, at $2.75 per share. Mayberry Investments acted as the investment banker to the deal on behalf of Derrimon.
Established in 1998, Derrimon is now a major distributor of consumer goods to supermarkets and wholesalers island-wide as well as supermarket operators.
“We are looking forward to working with Anand James, who remains as Managing Director of CFF, to expand on the synergies provided by this unique business. We believe that this investment will also assist us to reach the next level in our evolution.” CEO and majority shareholder of Derrimon Derrick Cotterell said.
CFF is engaged in the manufacture and distribution of flavourings and water soluble colourings for the food, beverage, baking, confectionary and pharmaceutical industries. The Company also manufactures and supplies fragrances, which are used in production of household cleaning, body car, aroma therapy and air freshener products. The Company supplies its products predominantly to commercial concerns in Jamaica, and exports to Caricom countries including Trinidad, Barbados, Guyana, and St. Kitts.
Managing Director of CFF Anand James said “I am very pleased with the progress of CFF since its listing on the Junior Market last September. Less than one year later, the listing has assisted me to identify a
long term strategic partner who shares my values and overall strategic focus.”
The deal will result in some changes to the board of directors of CFF, which will now comprise two
executive directors from each of the two companies. The three non‐executive directors as well as CFF’s
mentor will remain unchanged.
Jamaica’s NIR passes US$2b
Jamaica’s Net International Reserves (NIR) now exceeds US$2 billion as it sits at US$2.18 billion, up by US$805 million during July. The increase reflects the US$800 million bond, the government raised recently on the international market.
The gross amount of the reserves is US$2.8 billion, up by US$793 million during July, of this amount US$606 million is due to the International Monetary Fund (IMF) and represents primarily, funds obtained from the IMF for liquidity support for the financial system, when the JLP government undertook the first debt exchange, back in 2010.
Reserves of Goods Imports amount to 28.13 weeks and 20.30 weeks of Rreserves of Goods & Services Imports.
Grace & JPS paying shareholders
Grace Kennedy approved an interim dividend of 78 cents per stock, to be paid on September 30 to stockholders on record of September 12, the EX dividend date is September 10, 2014.
An interim dividend of 70 cents per share was paid on April 30, this year. A third dividend is expected to be paid later in the year, in keeping with the company’s policy of making three payments per annum.
Jamaica Public Service approved a Class F preference share a dividend of US$1,137,653 or 0.463287757 per stock, to be paid on August 15, 2014, to stockholders registered at the close of business on August 4, out of retained earnings. The EX-dividend date is July 30, 2014.
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Jamaican Government revenues short $3.5b
A $2.5 billion shortfall in the collection of company tax and a $2 billion shortfall in the collection of grants, offset by some areas that over performed, resulted in the overall tax take for the first 3 months of the 2014/15 fiscal year to June, falling short of budget by $3.5 billion revenues.
On the expenditure side, reduced payments of $2.3 billion for non-wages and interest and a billion less in the wage bill, coupled with a $3 billion reduced capital spend, helped to cut expenditure by $6.3 billion, leaving the fiscal deficit better off by $2.8 billion.
Revenues came in at $93 billion for the three months and expenditure at $110 billion, for an overall fiscal deficit of $17 billion.
Areas of revenues that were major out performers are, PAYE with $578 million or 3.6 percent, tax on dividends, $100 million or 24 percent, tax on interest, $726 million or 255 percent, special consumption tax on local goods $737 million or 27 percent, education tax, $231 million an increase of 5 percent.
Local GCT fell sort by 5.5 percent amounting to $792 million, GCT on imports fell short by 5 percent or $723 million.
