Buy Rated — Page 64

Lasco Manufacturing profit climbs 19%

February 2, 2015 by IC Insider.com

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.

“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.

Filed Under: Buy Rated, Company News, Company Results Tagged With: Dr. Eileen Chin, iCool, Lasco

Lasco Financial profit up 50%

January 30, 2015 by IC Insider.com

Profit 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.
Earnings 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.

Filed Under: Buy Rated, Company News, Company Results Tagged With: Cambio, Jamaica Stock Exchange, Lasco Financial Services, Money Gram

Cargo Handlers profit up 43%

January 27, 2015 by IC Insider.com

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.
The 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.

Filed Under: Buy Rated, Company News, Company Results, JSE Junior Market, Stock Market Tagged With: Blue Power, Cargo Handlers, Caribbean Producers, Eppley, Lasco Financial

JSE stock moved to Buy Rated list

January 25, 2015 by IC Insider.com

Add your HTML code here...

The Jamaica Stock Exchange shares which were issued at $2.85 in the IPO in 2013, dropped last year to a low of $1.50 and the stock languished below $2 for months begging to be bought but with a few takers. This past week it hit $2.
At the close of last week, there was a bid in to buy 282,565 units at $2, but selling has dried up substantially. The prospects for the company is bright. Investors may be looking at 2014 performance to guide them, but it is 2015 onwards where the exciting times will be, this why IC Insider moved the stock from Market Watch to Buy Rated.
For the nine months to September last year, the JSE reported profit for the quarter of $11 million up from a small loss in the June quarter and for the first six months of the year. The big change in the September quarter resulted from a large block of shares traded that provided increased one-off income but also the recovery of $6 million in bad debts. For the year to September the JSE reported only $8 million in profit or a mere 6 cents per share, but bad debt recovered amounted to $10 million before tax. Revenues climbed to $89 million in the September quarter, an increase over the $73 million garnered in 2013. For the year to date revenues jumped $41 million to hit $242 million. Quarterly expenses climbed from $85 in 2013 to $91 million in 2014, and for the nine months, from $247 million to $273 million or just over 10 percent, a slower pace than the income growth of 20 percent.
Based on these results alone, the stock would at best be a hold and more likely a sell. Investment is about the future more than the past, and the latter is where the attraction is. The local stock market is exhibiting all the signs of a bull market in 2014. The early trading for the year to date is mostly positive. Increased market activity will mean more income from trading transactions. Increased prices will result in much more income from annual listing fees in 2015. More securities were listed in 2014 and more are expected in 2015 which will result in increased listing fees and the possibility of increased trading opportunities going forward.
Some of the factors supporting the above can be found in strong technical indicators pointing to a strong market ahead, sharp decline in interest rates and projected low inflation. Additionally, the fall in the price of oil and other commodities on the world market will provide consumer with added disposal income to spend and this is likely to improve the profits of many listed companies and should result in increased gains in stock values and trading volumes. Political winds may be blowing over the market, with elections due by 2016, but that should not stop investors from picking the stock up cheaply, if they can, and await what will be a huge pay off in two to three years’ time as the market gets back to full life, in a low inflation, low interest rate environment. The JSE had cash and investments at the end of the period of $375 million equity of $571 million with no borrowed funds.
Caribbean Producers have been restored to the Buy Rated list based on strong revenue growth in the September quarter that suggest higher profits in the current year compared with the 2014 results.

Filed Under: Buy Rated, Company News, Company Results Tagged With: Caribbean Producers (CPJ), JSE Company

Jamaican Teas’ profits up 28%

January 22, 2015 by IC Insider.com

Jamaican Teas stock gained the most in the junior market on Wednesday

The group made a profit of $27.5 million in the December quarter, representing a 28 percent increase from the similar period in the prior year and flows 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, Sales in the prior year included Real Estate sales of $21.75 million, excluding these sales, revenues would be up by 26 percent for the quarter. 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. 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 to $6.2 Million.

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

Property Development| The group has completed construction of more than 50 percent of units in phase 1 of the residential development in Yallahs, St Thomas. Approximately a half of the units have been sold and 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.
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.

Filed Under: Buy Rated, Company News Tagged With: Jamaican Teas, Orchid Estate

Paramount’s profit leaps 163% in Q2

January 19, 2015 by IC Insider.com

One of the branded product distributed by Paramount Trading

Profit after tax at Paramount Trading jumped 108 percent in the May quarter, on a pretax basis, and was up 73 percent after corporation tax in 2013, jumped 79 percent to $34 million, for the August quarter and leaped 163 percent in the November quarter to hit $49 million. The latest results raised the half years profit to $154 million over the similar period in 2013.
The improved results for the latest quarter, came from a 39 percent climb in revenues over the similar period in 2013, with revenues of $231 million versus $166 million in 2013. The latest quarter’s revenues are the highest the company has had, since listing in 2013. Gross profit margin jumped from 46 percent in the August quarter to 58 percent in November and from 49 percent in the same quarter in the 2013. For the six months to November 2014 the profit margin increased to 53 percent from 49 percent in 2013.
The company launched a new line of lubricants during the August quarter but sales are in their infancy at the time. According to a company executive in commenting on the August results, the increased sales was mostly from new customers added as well as increased sales of a product to an existing customer, who was not supplied with that product last year.
Administrative, selling and distribution cost, which fell in the August quarter came out at $33 million from last year’s $31 million. For the six months period these expenses amounted to $64 million versus $66 million in 2013. With the release of the August figures IC Insider.com had projected profit to come in around $152 million in the current fiscal year or around $1.15 per share, the latest figures suggest that earnings per share will probably be closer to $1.40. At the current price of $2.80 the stock would be priced at a PE of only 2.2 making it a very good buy, bearing in mind that that many junior listings have been valued around 8 times earnings in the recent past, and around 6 times now, with the latter PE, the price should potentially get to $8.40 at the low end and $11 at a PE of 8. The company seems poised to raise its next fiscal year earnings to a much higher level than the above forecast (IC Insider.com forecast $2 per share for 2016) so there seems to be much room for the stock to deliver high returns to investors. These figures do not reflect income or profit that should flow from the company’s acquisition of the Tradewell chemical line which they purchased from the Lasccelles group or any other acquisition that they may undertake in the near term. It also assumes that revenues which include some new customers will repeat going forward.

Financials| The profit to-date provided a strong 44 percent annualized return on average equity. Borrowed funds amounted to only $38 million, compared to the level of equity. Cash is up from $65 million but dividends of $23 million was paid out in December. Receivables which was at $178 million in August from $172 million at May, is down slightly to $172 in November, and represents an improvement considering the strong sales increase. Inventories at $203 million at the end of August and May, this year, jumped to $275 million in November but payables moved up moderately to $136 million from $128 million at the end of May.
The performance of the company during the quarter and for the 2014 justifies IC Insider.com elevating the stock to BUY RATED status in mid-October last year.

Filed Under: Buy Rated, Company News

Caribbean Cream’s Q3 profit up 19%

January 12, 2015 by IC Insider.com

Kremi ice cream container

Caribbean Cream is reporting a subdued 19 percent increase in third quarter profit to November, well down from the 79 percent increase for the May quarter, but better than the drop from $7.9 million to only $1.3 million for the August quarter.
Based on the first quarter IC insider forecasted earnings to climb to 40 cents for the fiscal year and to rise to 70 cents in 2016. For the year to February in 2014, earnings came out at only 11 cents per shares, which was up from 5 cents the year before. IC Insider has revised the 2015 fiscal year results, to 22 cents and the 2016 to 60 cents. The reduction is partially due to a 64 percent jump in marketing and administrative cost in the August quarter compared with a 20 percent increase in sales revenues and a 28.5 percent increase in gross profit. For the period to November marketing, administrative and finance cost jumped by 56 percent to $173 million. The sharp increased marketing and administrative cost, looks like settling off, after the company revved up expenditure in these areas to better align management and operations with increasing business activity.
Last year, Management indicated that cost associated with the JMA Expo and development cost for the new Kremi advertising campaign, launched at the end of June, helped push cost in marketing and advertising. The new packaging for the retail products was launched in May, the company reported.
Sales revenues climbed 26 percent in November and is up from 20 percent in the prior periods and is up 22 percent for the nine months to hit $741 million. Growth in sales has slowed and is well down on the growth rate for the February and April quarters, at 48 percent each and 27 percent for the July quarter of 2013. Improvement in the plant and new packaging, should help in moving sales to a higher level, than the slower pace over the last three quarters.
Gross profit margin jumped to 47 percent in the latest quarter from 37 percent in the 2013 period but for the year to November the margin is at 38 percent up from 0 percent for the nine months period in 2013. Going forward margin should improve even more with the blast freezer installed in November which management says will cut utility cost with less usage and create capacity for greater production to enhance sales volumes. With the installation, Manager indicates they will be able to meet the increased demand for the 2014 Christmas period. The management report was released in January, accordingly, the information on demand would most likely be based on actual sales. The company increased prices ahead of the Christmas period but the increase may well have slowed down sales volume growth.

Kremi paid over $63 million in electricity cost in 2014 fiscal year with the last quarter at $18 million. The company will benefit from less usages with the more efficient freezer going forward as well as from the reduction in electricity cost with the fall in the price of oil and the pass through effect on JPS bills, to their customers.
During the year to November, capital expenditure amounted to $56 million spent on the blast freezer and was geared to improving efficiency in the factory. Equity capital stands at $261 million and borrowed funds at $155 million of which $12 million is due to be repaid in a year’s times.
The stock last traded at 80 cents each but with our forecast for the 2015 fiscal year that ends in February the PE works out at 3.6. The company is in the business of production and sale of ice cream and is listed on the junior stock exchange market.

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

Jamaican Teas 2014 profit drops

January 5, 2015 by IC Insider.com

Jamaican Teas reported sharply lower profit, last year to September, of $52.7 million versus $93 million in 2013, with earnings per share of 31 cents. The figures were reported in the group’s audited financial statements release last week.
The results emanated from sale revenues of $1.14 billion down from $1.23 billion in 2013. There was approximately $50 million coffee sales included in the 2013 results with none in 2014. In 2013 the real estate segment contributed $185 million in revenues compared to only $26 million in 2014 with most coming in the September 2013 quarter.
Gross profit margin shrank slightly from 21.89 percent to 21 percent for the year, helping to cut gross profit by $17 million. Other operating income climbed to $24.7 million from $12.9 million in 2013, partially due to losses on sale of, and impairment of investments incurred in 2013, amounting to $13.5 million, but did not occur in 2014.

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

The company increased marketing spend by 50 percent for the year, in the local and overseas markets, to maintain or increase market share, while administrative expenses climbed 25 percent for the year and finance cost rose by 108 percent. The acquisition of the factory at Bell Road, is partially funded by loans, contributing to the increase. There was also duplication of some cost while the factory was being refurbished for occupation. In the final quarter, adjustments to cost and some asset values helped to depress the profit for the year and is not an indication that the group has moved into a longer-term lossmaking period.
Changes in our distributorship in the Florida at the start of the fiscal year resulted in some short-term fall out in sales and increased marketing cost. A new distributor was appointed in the US market that will provide wider distribution in some key cities within that country. Revenues are expected to benefit from this development starting with the December quarter. The 2015 revenues, should also benefit from the completion of sales of 16 units in the first phase of the real estate development in St Thomas. The supermarket in Savanna-la-Mar was close to a break even by year-end and while the one in Kingston remained profitable. The Montego Bay supermarket reported losses in line with what was incurred in the prior year.

There was approximately $50 million increased borrowed funds at the end of the year, putting borrowings at $304 million. The profile of the debt changed markedly, with long-term loans accounting for two thirds of the debt at the end of the fiscal year compared with just 2 percent in 2013. The portfolio of investments including equities, stood at $123 million at the year-end and shareholders’ equity of $635 million.
The company imports of black and green tea in bulk for packaging and the distribution local and overseas. it also packages and distributes herbal teas and distributes other bottled water, coconut milk and other pre-packaged food items. the group operates supermarkets and is involved in the rental of residential properties and the development of real estate for resale.The stock is listed on the Jamaica Stock Exchange and last traded at $2.50.

Filed Under: Buy Rated, Company News, Company Results Tagged With: Jamaican Teas, Orchid Estate

Cargo Handlers’ Q4 profit doubles

January 1, 2015 by IC Insider.com

Profit for the September quarter at Cargo Handlers is up 117 percent over the 2013 results to $49.7 million from revenues that climbed a very strong 77 percent. Profit rose by a smaller 55 percent, for the nine months ending September this year, to $131.7 million or $3.52 per share from revenues for the nine months of $220 million.
Other income, mainly foreign exchange gains, fell 13 percent in the quarter and was flat for the year, at $16 million. During the year the company earned $13.6 million from leasing and $8.9 million from management fees charged to a related party – Bulk Liquid Carrier and Petroleum Transport Ltd.
Administrative expenses dropped 31 percent in the quarter and 9 percent for the year but operat9ing expenses climbed 37 percent for the quarter and 22 percent for the year well below the increase in revenues. The company paid a dividend of $1.80 per share during the year for a yield in excess of 13 percent based on the stock price of $13.50 at the start of 2014.
Looking forward the foreign exchange gains earned in the last two years is unlikely to repeat in 2015 as the Jamaican dollar is unlikely to slip to the same degree it did in the recent past, so earnings will need to exclude most of these gains which amounts to just over 40 cents per share. Investors could be looking at earnings per share around $4.80 in 2015. At a price of $16 the stock is undervalued but they are difficult to come by.
Equity capital stood at $200 million and net book value at $5.33 per share. There is virtually no borrowings and cash of $93 million.
The company is involved in primarily in stevedoring services and is in the process of acquiring a petroleum haulage company which it now manages pending completion of the sale. The stock is listed on the Jamaican Stock Exchange.

Filed Under: Buy Rated, Company News, Company Results Tagged With: Bulk Liquid Carrier and Petroleum Transport Ltd, Cargo Handlers, company results, Jamaica Stock Exchange

NCB 2014 profit trumps 2013 by a KM

December 9, 2014 by IC Insider.com

National Commercial Bank net profit for 2014 hit $11.6 billion, a big jump from the NDX affected $8.58 billion in 2013. Earnings per share for the year ended at $4.73 just below IC Insider forecast of $4.80.
The 2013 profit was negatively affected by a huge $1.5 billion charge, from losses picked up when they exchanged high yielding government bonds for lower yielding ones and $680 million written off relating to the attempt to list on the New York Stock Exchange. The group is reporting net profit of $2.87 billion, for the September quarter compared to $1.8 billion in 2013, the latter was affected by a number of one off charges.
The 2013 full year was also negatively impacted by a $281 million hit from receivership expenses, an increase over the amount spent in 2012 of $172 million and a healthy rise in Technical, consultancy and professional fees of $1.09 billion compared with $846 million in 2012.
This year results benefited from a few one off items as well. Gain on acquisition of subsidiary contributed $301 million and gain on sales of shares in Kingston Wharves added $349 million but this is in lieu booking their share of profits for the quarter had they not sold. The group suffered a loss of $200 million on securities impairment and critically, although loan loss provision is up $200 million, the large increase in the final quarter is $700 million more than at the same time in 2013. For the full year, loan losses amount to $2.2 billion versus $2.1 billion for the previous year.
Salaries allowances and benefits cost was down in the quarter to $2.6 billion from $2.9 in the similar quarter, and for the year to $11.5 billion versus $11.2 billion in 2013. Other operating cost was up to $10.4 billion for the full year, from $9.4 billion in 2013 and for the quarter $3.1 billion from $2.8 billion.
Growth| For 2014, loans grew pretty strongly by 12 percent, moving from $143.6 billion to $157 billion and customer deposits of $202 billion, increased by $23.8 billion, or 13 percent, resulting in net interest income being steady, in the September quarter, for both years, as well as in the June quarter at roughly $6 billion each. Net interest income was up $1 billion for the year over 2013 to reach $24.66 billion from $23.56 billion. Fees and commission income moved up to $10.6 billion net, compared to $9.7 billion in 2013. Premium income grew to $7 billion from $5 billion in 2013. Gains on sale of debt securities and foreign exchange trading gains jumped to $2.6 billion versus $1 billion in 2013.
Segment| Segment results were mixed with strong increases in some, while other areas fell below the 2013 performance. Retail & SME, reported improved profits for 2014 of $1.56 billion versus $793 million in 2013. Payment Services climbed down from $2.1 billion to $1.57 billion in 2014, Corporate Banking ended 2014 with $500 million versus $850 million previously, Treasury & Correspondent Banking jumped from $1.87 billion in 2013 to $3.7 billion in the latest year. Wealth, Asset Management and Investment Banking moved down from $3.88 billion to $3.6 billion, Life Insurance and Pension Fund Management climbed from $2.17 billion to $2.9 billion and General Insurance income of $557 million in 2013 jumped to $1.28 billion.
NCB hiked their final dividend for the year to 96 cents per shares. IC Insider’s forecast for the 2015 earnings is $5.75 per share and with the current price at just over $18 per share the stock is severely undervalued with significant upside potential.