AMG profit up 35%

amg-packaging280x150AMG Packaging, managed a 35 percent growth in profits of $31.7 million for the six months to February this year, the company’s latest financial report shows, thanks to a 194 percent jump in second quarter profit that reached $16 million up from only $5.5 million in 2014.
IC Insider’s forecast, is for profit of $85 million or 85 cents per share for this year and $1.50 for 2016. While profit surged, revenues rose a modest 8 percent in the February quarter and only 4 percent for the six months with sales volume having declined by 9 percent for the half year. The volume decline comes against the background of a 24 percent increase in units sold for the period to February 2014, resulting in a 42 percent jump in revenues. Helping to boost profit, was an improvement in the gross profit margin for the latest quarter to 24 percent versus only 16 percent in 2014 and 23 percent for the six months, compared to 19 percent in 2014.
Gross profit for the quarter amounting to $35.5 million, increased by a very strong 63 percent from 2014 and 27 percent for the six months, to near $70 million. Flat inventory cost and a reduction in other direct cost laid the foundation for the improvement in direct input cost and a swelling of the profit margins. Administrative cost rose 30 percent for the quarter and 29 percent for the year to date period well ahead of revenue growth, thus negating some of the top line improvement.
AMG cht 2-15Cost got hit, with the Jamaican dollar losing value, resulting in 28 percent more Jamaican dollars having to be found to purchase one US dollar, since September 2012. The price of paper on the world market, increased by 22 percent, from US$720 per tonne at September 2012, to US$830 in August 2013 and to US$875, which it has been since June last year.
Receivables are down by $13 million from the amount of $81 million at the end of August last year and so too is amounts in payables by $10 million from $71 million. Cash funds fell slightly to $19 million from $22 million while inventory is up from to $118 million at August to $120 million, which is nearly 4 months supplies based on sales in the quarter and is up from just two and a half months back in 2013 and seems to be a hedge against devaluation of the Jamaican dollar. Borrowings fell from $97 million at February 2014 to $58 million with $14 million to be repaid during the next twelve months, the decline will help reduce cost with lower interest payments going forward.

JMMB profit down slightly but…

JMMB sign at Knut BrnchJMMB Group posted a 14 percent fall in net profit compared to 2013, with profit after tax of J$1.85 billion. Earnings per share amounted to J$1.14 for the nine month period to December 2014, and $644 million after tax, for the December quarter or 40 cents per share, in line with the September quarter results of $651 million but just 8 percent below 2013. Operating expenses, however, rose by $220 million in the quarter above that of the September quarter, helping to keep profit down.
Earnings for the full fiscal year to March, should end around $1.60 per share, at a stock price of $7 and a PE of 3.5, the stock is undervalued. Profit before tax was higher for the latest quarter, a near $100 million increase in corporate tax provision resulted in net profit falling behind the December 2013 quarter. Operating revenues grew 18.1 percent over prior period, to J$7.8 billion, due mainly to acquisition of two subsidiaries and $2.8 billion for the quarter versus $2.45 billion for the December 2013 quarter.
JMMB_ibl_logoThe group’s Net Interest Income grew J$270 million or 7.1 percent year-over-year to J$4 billion. Management attributed the growth to “expanded business lines through the acquisition of Intercommercial Bank (IBL) in October 2013, coupled with effectively managing the group’s investment portfolio and cost of funds. Other operating revenues, namely, gains on securities trading, foreign exchange margins from cambio trading, and commission income also reflected increases of 25.2 percent, 78.5 percent and 30.7 percent respectively, these were driven largely by volume increases and taking advantage of market opportunities. Our operations in the Dominican Republic continue to produce positive results contributing J$508 million to the Group and IBL contributed J$162 million to the group’s earnings.”
Operating expenses increased from J$3.99 billion to J$5.45 billion. ”Expenses associated with the expansion of the group through the acquisition of IBL and AIC Securities accounted for J$796 million (54.6 percent) of this increase and the remaining J$662 (45.4 percent) is attributable to costs associated with integration, growth in subsidiaries in the regional markets, increase in asset tax and normal inflationary increases”, management advised shareholders.
One of the effects of the increase in operating costs was that the group’s efficiency ratio (administrative costs as a percentage of operating revenue) moved from 60.4 percent in 2013 to 69.9 percent. Management is taking medium to long-term measures to correct this increase, mainly through extracting synergies from its recent acquisitions through its integrated financial services model across regional territories, the company stated.
JMMB 12-14Concerns|Insider selling of the company’s stock has been high, raising concerns about the prospects going forward, with the likely impact on earnings that could arise with the restrictions being placed on repo trades that will see smaller amounts no longer acceptable to be booked directly by dealers. This change will affect margins on such funds, even if they are shifted to unit trust. The company made much income from foreign exchange trading which could be curtailed with what seems set to be greater stability in rate of the Jamaican dollar against the US dollar. IBL is operating in Trinidad where the economy is facing reduced income from the energy industry with the fall in the price of oil and gas, the country also is faced with high inflation, these developments are likely to see measures being implemented that could constrain business activities and so affect income and profits in the subsidiaries in that country.
Locally, Treasury bill rates have been falling since the first half of 2014 and seem set to decline some more, this can be both positive and negative, depending on the length of time, funds are placed on the asset and liabilities sides. Lower rates mean less income being earned by the company’s own funds, some investments will see an increase in values and greater activity in the stock market which can lead to more fee income as well as appreciation in any stock portfolio it may hold.
JMMB Group will replace shares in Jamaica Money Brokers shortly, and become the listed company. Shareholders of the group were paid 33 cents in dividend last year.

Profit looking up at Broilers

Jamaica-BroilersEthanolPlant280x150Jamaica Broilers recorded profits of $406 million for the quarter to January 2015, a 115 percent increase against the $188 million in 2014. Results for the third quarter was better than the amount earned in the first two quarters of the fiscal year combined.
Profit of $622 million was earned for the nine months, 21 percent above the $512 million for the 2014 period. Earnings per stock amounted 33.8 cents for the quarter, up from 15.7 cents for the corresponding period in 2014 and 51.86 cents per stock unit versus 42.71 cents, for the nine months period. IC Insider is forecasting $1 per share earnings for the year to April and $1.50 for the next fiscal year. If the forecast is met, the stock would be selling at at PE ratio of only 4.
The group should benefit from lower cost of inputs for feed, energy and fuel cost with the decline in the price of oil. Contributing to the gains so far, is the Group’s revenue increase of 15 percent for the quarter to hit $9 billion from the $7.8 billion in the corresponding period last year. Gross profit jumped 38 percent in the quarter to $2.2 billion, $600 million above the $1.60 billion of the corresponding quarter of 2014. For the nine months, gross profit came in at $5.7 billion versus $4.4 billion, an increase of 29 percent. It was the improvement in Gross profit margin that contributed most to the improvements in profit with $370 million for the quarter coming from the increased margin.
JB 1-15“In this quarter, the segment reporting was changed to reflect the new geographical perspective on the Group’s operations, being Jamaica, US and Other which includes Haiti,” the company’s management informed shareholders.
Management went on to state that “the growth in the US Operations continues. The segment results reflect the improvement in year to date performance; now at $773 million compared to the year to date of $283 million last year-a 173 percent increase. The Operations in Jamaica have performed as anticipated, given the market environment which has resulted in depressed consumer demand and lower disposable incomes. The year to date segment results at $1.297 billion therefore reflects only a 2 percent increase over the $1.270 billion recorded last year. Revenues from the fuel terminal operations at Port Esquivel were booked in this quarter in respect of a short-term contractual arrangement. A long-term agreement is being negotiated and prospects look good due to the current shortage of storage capacity for petroleum products. In this quarter, the segment reporting was changed to reflect the new geographical perspective on the Group’s operations, being Jamaica, US and Other (which includes Haiti). Distribution, selling and administrative costs, quarter -over –quarter, essentially reflect inflation increases along with costs related to organizational strengthening and increased activities in the US Operations.”
Borrowed funds increased to $6.9 billion and cash funds also increased to $1.76 billion, while equity stands at $11.3 billion.

Access joins tax line

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Taxes280x150Access Financial will pay only $4.7 million in taxes for 2014, having enjoyed tax free profit for most of the year. The tax charge left $306.7 million in net profits or $1.12 per shares up from $270 million in 2013. But Access suffered a big increase in bad loans amounting to $229 million, more than doubling the $95.7 million in 2013. Not reflected in the bad debt figure is $14.4 million listed in the financial as recoverable, in 2013 the amount was $12.78 million. Gross interest revenues were up by 29.5 percent to $938 million and net income of lending moved to 990 million an increase of 29.7 percent. Other expenses rose by 18.3 percent.
Access_Financial_ServicesFor 2015 and the following 4 years, less a quarter, the company will be subject to tax on profit at 12.5 percent or 50 percent of the regular tax rate.
AFS 12-14The stock sells at a high premium to net asset value of $2.96 per share compared to the stock price of $9.60 but that is partially explained by the rich 43 percent return on equity. At the end of the year loans advanced fell to $1.085 billion from $1.12 billion in at the end of 2013 while loans received fell from $543 million to $317.7 million and cash funds increased to $127.9 million from $49 million.
IC insider forecast earnings of $1.60 for the current year after tax at 12.5 percent. The stock remains Buy Rated for long term growth.

25% jump in Berger Jamaica profit

Berger Paints Jamaica enjoyed a 25 percent jump in after tax profit, for the December quarter and 12 percent for the nine months to December, thanks to lower tax rate as profit before tax was up 16 percent and only 4.5 percent respectively.
Berger280X150Sales revenues were up 9 percent in the quarter, to $679 million and 6 percent for the nine months to reach $1.496 billion. Profit before tax, amounted to $84 million for the quarter, up from $72.5 million and $95.3 million versus $91 million.
After providing $21 million for tax, net profit for the quarter ended at $63 million or 30 cents per share, and for the nine months, earnings ended at $71.5 million or 33 cents per share.
At year end, cash ended at $48 million compared $41 million at the end of March, but current assets climbed to $891 million from $674 million at March and $792 million at the end of 2013. Current liabilities rose as well, to $422 million from $390 million at the end of 2013 and $290 at March last year.
Going forward, Berger should benefit from the lower price for oil on the world market as a major input into producing paints is oil based products. Profits for the year to March, should end around 34 cents. Investors should be seeing a large portion of the profit being paid out as dividend, with the stock price now at $1.56, the yield could exceed 10 percent. IC Insider forecast 54 cents per share for the 2016 fiscal year.
Berger Paints Jamaica is listed on the Jamaica Stock Exchange.

Profits up 28% at Jamaican Teas

The Orchid property being developed that should add to Jamaican Teas' profits in 2015 & 2016.

The Orchid property being developed that should add to Jamaican Teas’ profits in 2015 & 2016.

Jamaican Teas made profit of $27.5 million in the December quarter, representing a 28 percent increase from similar period in the prior year and flow from a 16 percent increase in sales to $319 million.
Sales were helped by 91 percent jump in exports, moving from $55 million to $103 million. The increase in exports, relate mainly to supplies to the US market and is partially due to the appointment of a new Distributor for the North East USA and expect that this will result in further improvement in sales. Revenues for the group, in the prior year, included $21.75 million in Real Estate sales. Excluding these sales, revenues would be up 26 percent for the quarter. Group sales also benefited from the launch of four new products during the period. Sales for Supermarkets are up 9 percent compared to the comparative quarter, in 2013, however, profits are flat. The jointly owned Supermarket in Montego Bay showed a reduction in losses which was helped by certain actions taken to reduce cost in 2014.
Gross profit margin increased to 24.3 percent from 24 percent in 2013, while gross profit increased 16 percent to $62 million but cost rose in other areas, with marketing climbing 24 percent to $7.3 million, administration by only 4 percent to $25.5 million and finance used to generate revenues in the period, is up 14 percent to $6.2 Million.
JTs12-14Property Development| The group has completed construction of more than 50 percent of units in phase 1 of the development in Yallahs, St Thomas. Approximately a half of the units in the first phase have been sold, delivery to the purchasers should start in April. The group should enjoy increased profits from this development which should start reflecting in the June quarter.
Borrowed funds stand at $320 million including long term debt of $228 million and equity capital at $660 million.
Barring any unforeseen developments, 2015 could produce the best financial performance far. The stock which is now at $2.55 seems to have much room for growth.

C&WJ revenues up 27% in Q3

cable-and-wireless-worldwide280x150“In the Third Quarter we have continued to build momentum through our investment-led Project Marlin and we are continuing to deliver top line growth” Phil Bentley, Chief Executive of CW Communications, commented in a release of the group’s third quarter results today.
“Investments in our mobile networks have improved coverage and reliability and we saw mobile data grow a further 23 percent with traffic carried on our networks increasing by over 35 percent. Fibre investments have focussed on our Caribbean markets and are key to generating growth in the Broadband & TV segments. We continue to work with Governments and Regulators to gain the required approvals for completion of the Columbus acquisition and are on track to close before our fiscal year end” Bentley stated.
The groups CEO went on to say “Mobile revenue (53 percent of Group revenue) was up 4 percent in the Third Quarter driven by growth in LIME and Panama, up 10 percent and 4 percent respectively. LIME growth was driven by continued subscriber additions in Jamaica, 18 percent where investment in our 4G mobile network led to constant currency revenue growth of 27 percent and an NPS gain of 11 points, whilst in Barbados our “Upgrade Barbados” marketing campaign led to 6 percent revenue growth and our market-leading LTE service in Cayman drove revenue growth of 3 percent. Panama mobile growth followed a strong increase in subscribers, primarily within prepaid, as a result of increased promotions leading up to and through the holiday season.”

Lasco Manufacturing profit climbs 19%

Lasco's new I Cool drinks - demand exceeded supply in the December quarter

Lasco’s new I Cool drinks – demand exceeded supply in the December quarter

Lasco Manufacturing enjoyed a 24 percent jump in revenues for the December 2014 quarter to $1.25 billion over the same period in 2013. Net profit however, increased by lesser 19.5 percent to $158 Million resulting in earnings per share of 4 cents.
Revenue for the nine months to December increased by 16 percent to $3.3 billion. “This performance was mainly due to increased sales volume in the export markets as well as the introduction of the iCool line of products. The export division revenue year to date, shows a 53 percent growth over the same period in the 2013” Dr. Eileen Chin, Managing Director stated in her report accompanying the financials. Additionally, finance cost increased in the quarter, as well as year to date, with the quarterly figure rising 180 percent to $45 million and the nine months, to $102 million from just $18 million in the prior year’s nine months period, much faster than the increase in revenues. The increases above helped to pressure profit for the period, resulting in slight 5 percent reduction in net profit for the nine months, amounting to $426 million, from the prior year.
LasMn 12-14“There was also an increase in operating expenses during the period due to a significant investment in marketing to support and promote the introduction of our new iCool line,” Chin also states in her report. “Operationally, we are meeting our growth milestones. Lasco Manufacturing is well positioned in the current environment to deliver increased growth. We have completed a significant transformation that provides us with a strong asset base. Importantly, we expect strong growth in the 2015-16 financial year driven by ongoing success in our local and export markets. The integration of our business process and product extension portfolio has contributed positively to this quarter’s results. This integration is also expected to have further positive impact on profitability during the 2015-2016 financial year. We are on target to deliver on the promise to improve efficiencies and productivity, reduce operational costs, and increase product portfolio, sales and profitability”, said Chin.
Lasco recorded gross profit margin of 30 percent, in the December quarter from 23 percent in the same period in 2013, the margin, year to December, is 37 percent. Administrative and marketing expenses were flat in the quarter and up 29 percent year to date, compared with the prior year.
Earnings for the full year to March should end up around 15 cents per share. With new products to be added to its portfolio when the dry products factory is activated, revenues going forward should grow strongly. Increased finance cost and depreciation charge will be a drag on earnings for a while. At a stock price of $1, the stock is a buy to benefit from strong future income and above average profit growth.
Shareholders’ equity stood at $3 billion at December, borrowed funds stands at $1.4 billion. Work in progress stood at $2.26 billion, this amount relates to the dry product factory and when completed will swell fixed assets to $3.3 billion but it will result in increased depreciation charge and the funding for it will result in finance cost hat was being capitalised being expended against revenues.

Lasco Financial profit up 50%

Lasco cambioProfit at Lasco Financial jumped a noticeable 50 percent, in the December 2014 quarter, on rising revenues of 11 percent. The company recorded profit of $68 million in the quarter versus $46 million in 2013 and recorded a 33 percent rise in its nine profit to $181 million from $136 million.
Lasco reported improvement in gross profit margin of 152 percent, in the December quarter, from 108 percent in the same period in 2013, the margin, year to December, is 155 percent from 137 percent in the nine months of 2013. Administrative expense rose by 8 percent for the quarter and 13 percent year to December while marketing expenses fell 8 percent in the quarter but was up 9 percent year to date, compared with the prior year, but still below the rise in revenues.
LasFn -12-14Earnings per share for the quarter amounted to 6 cents and for the nine months 15 cents. Earnings for the full year to March should end up around 20 cents per share. The stock now priced at $1, remains a buy, with prospects for increased profits for 2015/16.
The company is listed on the Jamaica Stock Exchange junior market and is primarily involved in cambio and money transfer and has with equity of $795 million no debt, and cash funds of $502 million.

Cargo Handlers profit up 43%

Junior market Cargo Handlers, reported their first quarter results to December, last year, continuing the strong growth trend of the 2014 fiscal year, with another impressive increase in operating revenue which jumped 40 percent over 2013, to $62 million. Profit was up by 43 percent to $40 million, ending with earnings per share of 96 cents. Other income fell from $6.8 million to $341,000.
Trading on the Junior Market was very low but for lack of buying interest but more due to sellers holding out for higher prices and in a number of cases there is no selling interest for nearly a third of the listings.
JM27-1-15The market closed with only 4 securities traded and ended with 78,878 units valued at $142,210. The JSE Junior Market Index declined 0.35 points to close at 692.76, with the price of 1 advancing and none declining. At the close, there were 5 stocks with bids higher than their last selling prices and only 1 stocks with the offer that was lower. The junior market closed with only 3 securities closing with no bids to buy. There were 7 securities that had no stocks being offered for sale.
Stocks trading are, Caribbean Producers closing with 970 shares and gained 1 cent to $2.05, Blue Power ending with 1908 units changing hands at $6.51, Eppley 9.5% preference share traded 10,000 units at $6 and Lasco Financial ended trading with 66,000 shares at $1.05.