Grace Kennedy’s blow out quarter

May 12, 2016 by
Grace Kennedy profit for Q1 jumped 153%

Grace Kennedy profit for Q1 jumped 153%

Grace Kennedy reported a 153 percent jump in it results for the first quarter ending March with profit after tax of $1.5 billion versus $589 million in 2015. Grace reports that $606 million of the increase came from disposal of investment, with the bulk of it coming from the liquidation of a subsidiary.
Earnings per share ended at $4.51 compared to $1.78 in 2015 and the full year’s earnings looking to exceed $13 per share.
Grace reported sales revenues of $22 billion up from $19.36 billion in 2015, with profit from operations doubling to $1 billion, while other income amounted to $991 million up from $316 million in 2015.

Group Chief Executive Officer, Don Wehby steering the Grace ship to safer waters.

Group Chief Executive Officer, Don Wehby steering the Grace ship to safer waters.

The food and trading division enjoyed the most growth, moving from $398 million to $855 million, the banking and investing segment recorded lower profits of $29 million than the $89 million in the 2015 period, while the money transfer segment, continues to deliver attractive increases of 26.5 percent, with profit of $587 versus $464 million and the Insurance division went up 48 percent from $67 million to $99 million.
The company attributed the strong increase in the food and trading division to “improved performance of our food distribution and manufacturing business in Jamaica and internationally.”
Grace’s stock has come in for increased demand on the Jamaica Stock exchange over the last few trading days, with the price closing at $84 on Thursday with 1,021,582 units traded.

Filed Under: Breaking News, Buy Rated, Company News, Company Results, Feature Stories Tagged With: , ,

Jamaican Teas profit rises

May 11, 2016 by

Jamaican Teas Door A 55 percent jump in the profit before tax for the quarter to March 2016, to $31 million over the previous year’s quarter, was one of the highlights of Jamaican Teas’ 2016 performance to date. After tax profit jumped for the quarter by 30 percent to $26 million. There was no taxation provision in the 2015 period.
For the six months to March, profit before tax was up 69 percent to $73 million but after accounting for tax, in the current year ended 44 percent higher at $62 million for the 2015 period. Total comprehensive income which includes unrealized gain on sale on investments was up year over year at $95 million versus $57 million in 2015.
Sales for the Quarter of $326 million exceeded the $293 million for the previous year’s quarter by 11 percent, while for the six months, sales grew 17 percent to $713 million. Gross profit for the group increased faster than revenues, with an increase of 22 percent to $73 million for the quarter to March and for the year to date, by 24.5 percent to $152 million.
The manufacturing division recorded growth of local sales of 11 percent to $94 million for the quarter and 14 percent for the half year to $190. Exports grew 12 percent for the quarter to $90 million and 8 percent for the six months period to $199 million. Retails sales grew ahead of inflation with an increase of 12 percent to $141 for the quarter and an increase of 10 percent for the half year, to $257 million. There were no sales recorded for residential property for the quarter but sales of $40 million were recorded in the year to date results.
Profit before tax for the manufacturing division was $47 million compared to $34 million for the six months to March while for the retail segment profit was just $1 million compared to $577,000 in 2015. Share of associated company loss amounted to $5.10 million versus $3.34 million in 2015.
JamTs trck Expenses for quarter to March rose 18.5 percent and 18 percent for the six months to March but the increase was less than that of gross profit. Sales and Marketing cost rose by 24 percent to $18 million, Administration cost rose 17 percent to $66 million, Finance cost ended the period at $20 million, an increase of 16 percent, partially due to delay in completing sales in the real estate development, as well loans used in the funding of equity investment.
Investments contributed $8.6 million to profit from sale of investments for the half year leaving unrealized gains of $44 million at the end of March, with the gains included in the investment portfolio of $119 million.
Inventories grew from $396 million in March 2014 to $434 million, including $240 million cost of the real estate development. Amounts due from purchasers of houses in the development, totalling $75 million, helped to push receivable balance to $275 million.
Payables increased by $42 million over the year-end, due mainly to the purchase of inventories which increased by $45 million, or 11 percent over the September 2015 balance.
Cash generated from operations amounted to $38 million after paying corporate taxes of $20 million and repaying loans of $36 million and cash and cash equivalent ended at $35 million.
Shareholder’s equity stood at $820 million for a book value per share of $2.43 compared to a stock price of $3.90 on the junior market of the Jamaica Stock Exchange. (John Jackson is a director of Jamaican Teas).

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Steady progress at NCB

May 7, 2016 by

NCB hqtrFor the six months ended March, this year, National Commercial Bank (NCB) reported net profit of $6 billion or $2.44 per share, an increase of $594 million or 11 percent over the similar period in 2015. Profit after tax ended 10.2 percent higher at $3.6 billion, $332 million more than for the 2015 period, as loans and advances grew $14.8 billion for a 9.4 percent increase to $172.7 billion.
For the six months period, operating income increased by 8.6 percent, or $2 billion, compared with the six months to March, 2015. Contributing to this increase, are net interest income increasing by 9.4 percent, or $1.2 billion, due to growth in the net loans and investment securities portfolios and a reduction in interest expenses driven by the decline in the repurchase agreements portfolio. Premium income grew by $687 million, or 18.5 percent, due to higher levels of life insurance and annuity contracts and net fee and commission income increasing by 7.9 percent, or $384 million, mainly due to credit related fees from the growth in the loan portfolio, corporate finance and unit trust commissions arising from growth in those product lines.
“Operating expenses increased by 10.8 percent, or $1.8 billion, over the six months ended March, 2015 as policyholders’ and annuitants’ benefits and reserves, were up by $977 million, or 51 percent, due to increased actuarial reserves related to life insurance and annuity contracts sold. Staff costs climbed by 9.4 percent, or $593 million. Other operating expenses, were up by $366 million, or 5.5 percent, due to technical, consultancy and professional charges, licensing and processing fees” NCB directors’ report to shareholders stated.
“We anticipate a steady performance for the second half of the financial year as we pursue our strategic objectives and implement various initiatives under our digitisation agenda.”
NCB Mbay“Commercial banking activities, comprising the Retail & SME, Payments Services, Corporate Banking, and Treasury & Correspondent Banking segments, produced combined operating profits of $4.6 billion for the six months ended March, 2016, an increase of 6.9 percent, or $299 million, when compared to the six months ended March, 2015. Our Treasury & Correspondent Banking segment was the largest contributor to operating profit for the period.” The directors’ report went on to state.
IC Insider.com is projecting earnings of $5.65 for the year to September. The stock traded on Friday on the Jamaica Stock Exchange at $40 and would be valued at a PE of 7.2.
Non-performing loans totalled $8.5 billion as at March, down from $8.8 billion at March 2015, representing 4.8 percent of the gross loans compared to 5.4 percent a year ago. Customer deposits of $251 billion, increased by 19.5 percent over the twelve months, at a much slower pace than growth in the critical area of lending.
NCB ended with equity of $92 billion at the end of the quarter but lending only accounts for 58 percent of customers’ deposits and funds under securitisation arrangements.

Filed Under: Buy Rated, Company News, Company Results Tagged With: , , ,

Profit jumps 127% for car mart

April 27, 2016 by
Sanya Goffe addressing the audience at the listing of Jetcon's shares in March.

Sanya Goffe addressing the audience at the listing of Jetcon’s shares in March. Looking on are Andrew Jackson and Karl Wright, directors.

Jetcon Corporation’s revenues grew 55 percent in the first quarter ending March, leading to an increase of 127 percent in profit before tax came of $19.35 million, while after tax the profit rose 126 percent to $14.6 million or 9.4 cents per share compared with $6.8 million in the same period in 2015.
The growth for the quarter is above the 50 percent increase enjoyed during all of 2015. Gross profit doubled to $32.4 million and gross profit margin, moved from 16.9 percent to 21.9 percent, during the quarter.
Inventory of motor vehicles and parts increased moderately since March 2015 but is up 46.7 percent since December 2015, to reach $123.9 million while receivables increased sharply but is due to amounts deposited with suppliers for goods. All loans that were outstanding at the end of December last year have since been repaid in full and cash on hand increased to $60.5 million helped by the inflows of funds from the initial Public offer.
The shares which were listed on the junior market of the Jamaica Stock Exchange in March this year, traded at $2.85 after details of the results were released.

Filed Under: Buy Rated, Company News, Company Results Tagged With: ,

236% jump in Carib Cement profit

April 22, 2016 by

Caribbean Cement shares traded at $25 after Q 1 results.

Caribbean Cement shares traded at $25 after Q 1 results.

Caribbean Cement Company reported strong 236 percent gain in earnings for the first quarter ending March with profit of $834m, 98 cents per share versus $248m in 2014 or 29 cents per share.
Full year 2015 results were a profit after tax of $1.5 million or $1.82 per shares but after accounting for exceptional income and expenses resulting in lower profit than from ongoing operations. Included in the one off cost was redundancy payment of $436 million which h will result in lower payroll cost that should be equivalent to the separation cost in the first year.
Revenues climbed to $3.977 billion from $3.58 billion in the first quarter as domestic sales grew while export declined. Interest cost declined from $65 million in the March 2014 quarter to just $5.6 million in the current quarter. Cost elsewhere fell by $270 million in the quarter to help boost the profit.
Carib Cement paid taxes of $244 million in the quarter according to data in the cash flow but the provision against the quarter’s profit is $118 million. Cement ended up with cash balance at $963 million but invested $203 million of the cash inflows while working capital used up $525 million.
The profit for the quarter brought accumulated losses to $4.9 billion which should be wiped out in 2017 if the current trend of profitability continues.
The stock traded as high as $25 on Friday after results were released.

Filed Under: Buy Rated, Company News, Company Results Tagged With: ,

$74m pay out by JSE

April 22, 2016 by

JSE signThe Jamaica Stock Exchange will pay $74 million in dividend on May 6, this year. The dividend translates to 53 cents per share. In December last year, the company made a payment of $65.8 million or 47 cents per share following a payment of 53 cents per share in July.
The stock will start trading ex-dividend on April 28, at which date new investors in the stock will not be entitled to the above dividend.
With the price of the stock in the $20 range in 2016, the yield is 2.5% and IC Insider projects that it is with profits for the year set to exceed that of 2015 dividends will be increased thus raising the yield for the year higher.
The company reported earnings for 2015 of $1.25 per share or $175 million, up from only $3 million in 2014. The company’s stock last traded on Wednesday on the Jamaica Stock Exchange at $20.55.
In December 2014, the stock traded at $1.50. The three dividends provide investors who purchased the stock in December 2014 if they held them, with a full pay back of the amount invested, not factoring in taxes.

Filed Under: Buy Rated, Company News, Dividends Tagged With: , ,

AMG profit jumps 65%

April 17, 2016 by

amg-2Revenues at AMG Packaging rose by only 4 percent for the February 2016 quarter to $157 million up from a decline of 1 percent in the first quarter and for the six months an increase of 1.7 percent to $308 million.
Profit for the quarter out performed revenues by a wide margin, jumping 43 percent to $23 million although the company incurred $10.5 million in startup cost for the tissue operations in the quarter and $16.4 million for the six months, pulling profit down to a 65 percent increase to $52 million.
Earnings per stock came in at 23 cents for the quarter and 51 cents for the six months with IC Insider projecting that excluding the cost for the tissue operation earnings per share should hit $1.35 for the full year. The stock last traded on The Jamaica Stock Exchange at $13.
The results showed gross profit climbing 56 percent to $55 million for the quarter and 53 percent to $106.7 million for the six months as gross profit margin climbed by 35.5 percent for the quarter from 23.6 percent in 2015 and to 35 percent for the six months from 23 percent in 2015.
Increases in administrative and other none manufacturing cost were well contained with an overall increase of only $4 million for the half year.
Information gleaned is that the tissue operation has high profit margins, this augurs well for the company going forward once the new operation which have been tested is up and running at optimal levels for a while. While management speaks to the plan to commence production in the third quarter it will be the 206/17 fiscal year that should add to revenues and profit.
AMG is currently, engaged in the production of cardboard boxes for packaging and is embarking on an expansion into tissue paper processing.

Filed Under: Buy Rated, Company News, Company Results Tagged With: ,

2 new BUY RATED stocks

April 10, 2016 by

I$PJetcon Corporation and ISP Finance have been added to the IC Insider BUY RATED list. The list continues to sport selections that have some room to grow before they reach the stage of maturing. Some have reached levels that look like they may be close to the top and stay there for a while and the may be just be rated hold than BUY RATED at this stage of the market’s rally in Jamaica.
The Trinidad based companies appear to be saddled by the effects of the recession on their performance.
There are now a few that were previously listed as BUY RATED have moved to Watch, as these stocks are likely to be market underperformers. If these are already owned then investors may want to hold on a little longer, buying into them now, while such a move could be profitable such investment may not be the smartest move at this time. At this stage of the Jamaican market it has become more challenging to continue to back some of the strong performers to date, as their valuation has risen and future gains will most likely come from gain in profit, unless the market revalues the PE ratios higher, a factor that is expected with lower interest rates likely in the months to follow.
Knutsford Express has been to Market Watch as it close to our target price of $24 at this time and while there is more growth to come with increased frequency slated for the north coast routes, increased profits going forward could slow considerably from recent strong gains. Buy Rated gwth 2016Sagicor Group has done well since we selected it, with an increase close to 150 percent plus dividends, the immediate future looks like the gains are going to slow compared to the growth since the start of 2015. In past bull market, investors gave it a big premium over the rest of the market. That is not so now, but could change as the current bull market continues it run.
Lasco Distributors that was moved to a hold is now back to a buy, since the price has pulled back to $5, the company will benefit from taking over the overseas distribution of all of the manufacturing company products. The inflows expected from the lawsuit with Pfizer should add to the company’s value when the courts agree the amount, which management puts at more than US$300 million.
AMG Packaging, Caribbean Cream and Paramount are all up more than 300 percent but expansion into new products should give revenues and profit a kick in the not too distant future for AMG and Paramount. Caribbean Cream full year results are due shortly and should exceed 55 cents per share as the company benefited from sharp drop in raw material cost.
Jamaica Stock Exchange is now a Watch as it seems close to fairly valued currently, but dividend yield could well push it higher. In addition, of note is that while trading levels have improved they are still well off from historical highs, so there could still be much more gains ahead later on.
Trinidad is in recession and the results of companies are showing it with pressure on profit particularly for companies that earn the bulk of their income in the twin island state. As a result prices have been declining for many of the companies on the Trinidad market with a few exceptions. With the exception of Trinidad Cement that is undervalued, a hold has been placed on Trinidad based listed stocks for the time being but investors should wait for TCL to settle before buying.

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JMMB undervalued as profit slips

March 29, 2016 by

JMMB Group posted net profit of $1.73 billion and earnings per share of $1.04 for the nine months period ended December 2015. JMMB reported lower profit in the December Quarter of 32 cents per share versus 46 cents in 2014 and $1.04 for the nine months compared to $1.08.
JMMB (2)The December quarter profit of $519 million is the lowest of the three quarters to date as the group saw increased net interest income but lower gains on securities trading of $714 million versus $942 in the 2014 quarter and Foreign exchange margins from cambio trading of $227 million versus $248 million. Year to date these two categories are up on the prior year’s nine months. JMMB reported profit of $743 million in the 2014 December quarter, 43 percent more than in 2015.
Operating revenues after accounting for interest cost grew 9.2 percent to $8.5 billion, with gains on securities trading, foreign exchange trading, and commission income increasing of 12.8 percent, 16.4 percent and 29.8 percent respectively but with net interest income growing by just $126 million or just 3 percent. “These were driven largely by volume increases and taking advantage of market opportunities mainly in Jamaica” the JMMB directors’ reported stated.
JMMB management reported to shareholders that “the merchant bank in Jamaica contributed net profits of $330 million, an increase of 40 percent over the prior period. The bank’s loan portfolio grew by 32.4 percent from March 2015, with a non-performing loans ratio of 1.7 percent. The operations in the Dominican Republic continue to produce positive results with the Puesto De Bolsa contributing net profits of J$160 million for the period. The full range of services are being rolled out in the Dominican Republic which includes money market mutual funds and the newly acquired savings and loan bank, Banco Rio de Ahorro Y Credito JMMB Bank S.A. (JMMB Bank). The Group also obtained approval from the Regulatory authority in December 2015, as a new licensee, to administer Pension Funds in the Dominican Republic. The directors stated in their release with the quarterly. In Trinidad and Tobago, the Group’s operations continue to move in a positive trajectory, contributing $186.9 million for the period.
The asset base of the JMMB Group increased by $7 billion or 3.3 percent for the period, moving from $217.7 billion at March 2015 to J$225 billion.”
The Group’s managed funds increased by 60 percent to J$65 billion compared to $40.7 billion for the prior year.
JMMB should earn profits around $1.40 per share for the fiscal year that ends March this year, but recent results suggest that growth is reaching maturation levels and management will need to put in lots of effort to rev up business while keeping cost under control. While management indicates that the operation in Trinidad continues to be impacted positively, concerns must exit with the recession in that country, that is placing pressure on corporate profits. New acquisition in Dominican Republic could enhance operations in that country and contribute to increase profits in 2016/17. With the stock price hovering at $10 in Jamaica, the PE of the stock is around 7.5 which make for a good entry point for investors who may want to invest for a few years.

Filed Under: Buy Rated, Company News, Company Results

Scotia Group profit jumps 33%

March 6, 2016 by

Scotia Group profit jumps

Scotia Group profit jumps

Scotia Group profit jumped 33 percent to $1.96 billion after increased taxation of $1.26 billion for the quarter ending January. The improvement is due primarily to falling cost as income declined moderately by 2 percent to $10.37 billion.
Net interest income for the period was $6.23 billion, up from $6.08 billion generated in similar quarter in 2015. This was primarily due to a fall in interest expenses of $239 million. The Group saw a slight dip in interest income of $89 million even as loans grew 6.9 percent to $156.35 billion while investments rose by 28.5 percent to $112 billion. Customer deposits grew 10.7 percent to $219 billion. The group enjoyed better loan losses experience with a reduction of $87 million to $257 million, a 25 percent reduction compared with the prior year outturn, aided by what management stated as “enhanced adjudication, monitoring and recovery efforts.”
Other revenue for the quarter amounted to $2.8 billion, a decrease of $95 million compared to the quarter ended January, 2015. The reduction was due “to net losses on financial assets resulting from marked-to-market movements on securities, lower foreign currency gains, offset by the growth in net fee and commission income from increased transaction volumes on our credit card and merchant service business segments. Other revenue was $1.1 billion below the previous quarter, due primarily to the one-time actuarial release of $1 billion booked in the October quarter of 2015, resulting from the changes to the income tax regime for insurance companies in 2015” the banking group’s management stated in their report accompanying the financials.
Operating Expenses for the three months amounted to $5.6 billion, a decrease of $733 billion or 11.61 percent compared to prior year. Asset tax fell by $339 million as the rate for regulated insurance companies moved from 100bps to 25bps; correspondingly, the corporate income tax rate for these entities was increased from 15 percent to 25 percent. Salary related and other operating expenses were down $394 million, flowing from the benefits of efficiency initiatives including closure of some branches implemented in 2015.
Earnings per share for the quarter, came in at 62 cents compared with 47 cents in 2015 and seem poised to hit the $4 mark for the fiscal year ending in October. The stock traded at $32 on the Jamaica Stock Exchange on Friday.

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