Knutsford approves split

Shareholders of Knutsford Express Services, approved a 5 for 1 stock split at an Extraordinary General Meeting held on May 22, increasing the issued capital from 100,000,003 units to 500,000,015 shares of no par value.
The meeting also agreed that each ordinary share of the company be subdivided into five shares resulting in the Authorized Share capital of the Company increasing from 100,005,000 shares to 500,025,000 shares of no par value. The record date is June 2 and the ex-split date will be May 30.
The stock traded today at $66 on the Jamaica Stock Exchange. The split should result in the price trading at $13.20 and could easily go to $15. With only 500 million shares issued, the company may well need to consider another split at the annual general meeting later this year.

Pulse revs up stock split to 6 to 1

The Board of Pulse Investments at a board of directors meeting held today agreed to recommend to shareholders at an Extraordinary General Meeting splitting of the existing shares into six units for each one now held.
According to the release from the company, the recommendation is that the stock be split on the basis that 5 (five) additional shares to be issued to shareholders for every share currently held and that the authorized share capital be increased from 450,000,000 (four hundred and fifty million) shares of no par value, to 1,950,000,000 (one billion, nine hundred and fifty million) shares, by the creation of an additional 1,500,000,000 (one billion, five hundred million) shares. The increased split comes against the back ground of an IC article which suggested that the split should be at least 4 to 1to allow for liquidity in the stock.
The board had previously indicated that they were going to consider a 2 for 1 stock split.
The company currently has 271,789,674 issued shares, the proposed split would put the total up to 1,630,738,044 units with greater liquidity. The company’s stock last traded on the Jamaica Stock Exchange at $14.50 and carries a PE of 11 compared to 13.5 for the main market.
According to the Chairman, Kingsley Cooper, the likely date for the meeting to consider the split is tentatively set for June 21.
Pulse reported profits of $66 million for the March quarter and $221 million for the nine months period, up from $189 million for the similar period in 2016. The profit includes gains of investment property of $28 million in the March 2017 quarter and $81 million for the nine months.

Kingston Properties trades x-split

Gary Sinclair chairman of Kingston Properties

Shareholders approved a stock split of 2 for 1, at the Annual General Meeting Kingston Properties on May 16, with the record date being May 24.
The stock split became effective in stock exchange trading on Friday May 19, but no shares were traded but with the split adjusted price being $8.30. The split resulted in the 500,000,000 authorized ordinary shares in the capital of the Company being increased to 1,000,000,000 shares of no par value and the issued capital to just 321,992,668 units, resulting in net asset per share of $5.36.
The Group posted a 63% increase in rental income to for the March 2017 quarter over that of 2016 to reach $50 million compared to $30.7 million for the same period in 2016. The increased income boosted operating results before finance charges and other income, to $23.6 million in 2017 compared with $6.4 million in 2016 and $32 million for the year to December 2016.
Profit before taxation ended at $15.3 million but after providing for taxation of $14 million just $1 million was left for shareholders. In 2016 excluding fair value gain on revaluation of properties the company incurred a loss, there were no gains reported in the March quarter of 2016.
Total assets under management amount to $2.6 billion up from $1.86 billion as of March last year. Shareholders’ equity stood at $1.7 billion and borrowings at $737 million and is up from none at March last year.

Knutsford Express riding high

Knutsford Express last traded at $68.

Knutsford Express last traded in 2016 at $20, today its up 240 percent to $68, thanks to a combination of factors, chief amongst them is a scarcity of supply and a proposed 5 for 1 stock split.
A 33 percent rise in revenues to $203 million in the February quarter and a 63 percent rise in operating profit show the company in a pretty strong growth path.
Earnings per share closed the nine months period at $1.20 after the third quarter delivered 54 cents.
“We had a strong third quarter”, Oliver Townsend told IC, in response to the question, “can this growth continue,” Townsend answered in the affirmative. With our Montego Bay transport hub coming on stream by June this year, we should see continued growth as the company expect increased business as a result of having the hub located at the Sangster International Airport. The convenience of persons flying in and out of the airport being able to have easy and ready access to the Knutsford facility will see more persons patronizing the service, Townsend advised this publication. Ocho Rios is to have a new hub in which meals and drinks will be sold and thus enhance customers’ experience.
“We are also going directly from Kingston to Port Antonio using smaller buses via the Junction Road, the company’s Chief Executive said.
New buses added to replace older ones will reduce operating cost. The February results got a boost of $8.5 million realized from sales of buses, helping to push net profit up 94 percent to $53.7 million. For the nine months, revenues climbed 28.5 percent to $429.7 million while net profit moved higher by 35 percent to $120 million.
Knutsford does not break out its cost into direct operating expenses, marketing and administrative and other expenses so that readers can fully glean how the company is really doing, from an operational standpoint. Data compiled by IC show an improving level of efficiency as business expands. Net profit as a percentage of revenues climbed to 24.7 percent and is up from 20 percent in the third quarter of 2016 and ended at 22.34 percent for the nine months compared to 23.2 percent in 2016.
Depreciation charges rose 54 percent to $39 million well ahead of the growth in revenues, but the newer buses should reduce repairs and maintenance as well as the possibility that there could be fuel savings.
Knutsford generated gross cash flows of $159 million To February, up from $114 million in 2016, dividends of $24 million paid and $87 million spent of acquiring fixed assets left the company with $103 million in funds at bank or in cash. Shareholders’ Equity stands at $432 million with borrowings of just $68 million and cash and short term investments of $123 million. Current assets amounted to $180 million and current liabilities at a low $35 million.
The Company is listed on the Jamaica Stock Exchange and last traded at $68 for a PE of 25 based on estimated earnings for 2018 fiscal year’s estimated earnings of $2.75. The stock could be considered a bit pricey, with the market average at 13 times this year earning. With a 5 to 1 stock split days away, who knows what investors may do in light of the limited supply of the stock. At least profit seems to be on the rise at an attractive pace, as such investors with a long term time horizon may well enjoy gains sometime in the future, based on the growth path that the company is enjoying.

ISP Finance Q1 jumps to profit

ISP Financial turned a $3 million loss in the first quarter last year into an $8.2 million profit in this year’s March quarter as revenues climbed 25.5 percent to $64.5 million from $51.2 million last year in the latest quarter.
Earnings per share ended at 8 cents in 2017 against 46 cents for the fiscal year ending December last year.
Net revenues generated $59.56 million up from $49 million in 2016, staff cost rose 22 percent to $26.7 million while other operating cost fell from $25.7 million to $19.3 million.
ISP increased lending from $313 million at the end of 2016 to $331 million at the end of March and reduced cash funds from $112 million to $96 million. Loans advanced increased 31 percent since the end of September 2016, an annualized rate of 62 percent. Funds borrowed remained at $210 million, the same as at the end of 2016. Shareholders’ equity moved to at $242 million. The company has current assets of $443 million and current liabilities of just $11 million.
The stock is listed on the Junior Market of the Jamaica Stock Exchange and last traded on Friday at a record $24 up from the Initial public issue price of $2 last year.
The strong growth in loans and the potential for to continue in high double rate with cost being kept relative stable is the big attraction for the stocks.
Based on expected continued strong growth in lending IC maintains it projected earnings per share of $1.75 for the current year.

Bun sales shift hit Consolidated

Consolidated Bakeries (Purity) closed down form record high of $4.50 in 2017 to $2.40 on Friday.

Consolidated Bakeries suffered a reversal in fortunes in their first quarter results to March this year, with Easter falling in mid-April compared to the end of March last year, resulting in revenues falling to $228 million from $261 million last year and profit falling from $22.8 million down to $5.8 million in the latest quarter.
Earnings per share end at 3 cents in 2017 and 10 cents in 2016, for the fiscal year ending December last year the company reported just 5 cents per share in earnings. In the December quarter the company doubled Selling and Distribution cost resulting in a rise of $22 million while revenues rose by just $3 million pulling a profit of $30 million at the third quarter down to just $10 million. For the March quarter, cost in this area came in at $33 million closer to the quarterly spend for 2016 but for December quarter with spend of $43 million.
Administrative, Selling and Distribution cost were effectively flat during the quarter, at $76 versus $73 million in the 2016 period. Gross profit margin declined to just over 36 percent compared to 37 percent in 2016, but gross profit fell $14 million to $82.4 million.
In the 2016 June quarter, revenues were just $210 million and generated $4.3 million in profit. With Easter bun sales taking place mostly in April, the company should see revenues popping around $60 million and profits by around $20 million for the current quarter.
Consolidated ended with cash funds of $148 million and borrowings of just $128 million with shareholders’ equity standing at $553 million. The company has current assets of $271 million and current liabilities of $159 million.
The stock is listed on the Junior Market of the Jamaica Stock Exchange and last traded on Friday at $2.40 and is down from a high of $4.50 earlier this year.

Big betting losses drop pushes SVL profits

Supreme Ventures profit rose sharply for the 2017 March quarter.

A huge fall in losses of Supreme Ventures sports betting, a fall of $82 million in operating expenses plus a 20 percent jump in revenues pushed profit up 51 percent to $416 million for the 2017 first quarter to March.
Profit before taxation grew by a much slower 39 percent, moving from $415 million in 2016 to $549 million in 2017. Earnings per stock unit ended the quarter at 15.8 cents up from 10.44 cents in 2016.
Sports betting lost just $9.5 million, sharply down from $68 million in the 2016 quarter, from $39 million fall in revenue, to $157 million, while Gaming that used to be a big loss maker chipped in with improved segment profit of $21 million, up from $10 million in 2016 with an increased revenue flow of $16 million to end $114 million. The group lost $19 million on its newly acquired subsidiary Caymanas Track, from revenues of $328 million. Caymanas Track Limited acquisition from the Government of Jamaica was effected on March 7. Lottery revenues rose from $8.8 billion to $10.4 billion for the quarter and contributed $556 million to profit up from $452 in the 2016 period.
Group revenues amounted to $13.4 billion, 20 percent higher than $11.2 billion in the corresponding period in 2016. Gross profit climbed 6 percent from $1.15 billion to $1.22 million. Administrative expenses rose 7 percent from $236 million to $252 million, finance cost fell from $40 million to $31 million.
SVL generated cash flows of $600 million in the quarter, up from just $49 million in 2016 as corporation taxes of $409 million paid in 2016 pulled down inflows for that period while tax payment for 2017 was just $121 million.
Shareholders’ Equity stands at $4 billion with borrowings at $380 million and cash and short term investments of $2 billion. Current assets amounted to $3 billion and current liabilities at $1.9 billion.
The Company is listed on the Jamaica Stock Exchange and last traded at $6.38 for a PE of 11 based on estimated earnings of 60 cents for 2017, the stock could pock higher with the average market PE at 13 times this year’s estimated earnings.

Profit rises 20% at Kingston Wharves

Kingston Wharves saw net profit attributable to shareholders growing by $56 million to $333 million in the quarter ending in March for a 20 percent over the comparable period in 2016. Profit before taxation grew 24 percent from $325 million in 2016 to $402 million in 2017. Earnings per stock unit ended the quarter at to 23.25 cents up from 19.34 cents in 2016. The 2017 performance was achieved from a combination of rising revenues and lower cost but higher taxation.
Group revenues amounted to $1.4 billion, 16 percent higher than or $1.2 billion in the corresponding period in 2016. Gross profit climbed 19.4 percent from $557 million to $662 million. Administrative expenses rose 7 percent from $236 million to $252 million, finance cost fell from $40 million to $31 million.
Terminal Operations| Operating revenue of the Terminal Operations Division amounted to $1.1 billion, a 14 percent increase over last year. Divisional profits increased by 21 percent from $274 million to $331 million. “The main driver behind this growth was the container handling operations which advanced by 8 percent over the corresponding period of the prior year,” chairman stated in the chairman’s report to shareholders.
Logistics & Ancillary| Logistics and Ancillary Services segment revenues grew 18 percent to $327 million, over the similar period in 2016. “This was achieved primarily through an expanding customer base as a result of deliberate marketing and business development efforts as well as the deployment of new technology to improve our integrated logistics services and allow for improved security and more efficient systems for the warehousing, delivery and timely receipt of cargo. The Logistics Services division earned operating profits of $98 million, an increase of 33 percent over the prior year,” Hall stated.
“We have invested considerably in our physical and technological infrastructure, embarking on significant terminal rehabilitation as well as the construction of a near-port domestic automotive centre to the benefit of both our terminal operations and our integrated logistics efforts. Our Total Logistics Facility, a purpose-built, state-of-the-art logistics complex will open our doors later this year, creating further opportunity to improve on our product offering and to execute planned vertical integration,” Hall further stated.
Shareholders’ Equity stands at $19 billion with borrowings at $2.2 billion and cash and short term investments of $2.7 billion.
The Company is listed on the Jamaica Stock Exchange and last traded at $30 for a PE of 26 based on estimated earnings of $1.15 for 2017.

Buy out interest for Berger Paints?


Reports reaching IC is that Jamaican based Berger Paints is in play with more than one interested party eyeing the profitable target one source within the financial community stated.
I know as a fact that an offer was made on Thursday but was rejected by Berger as inadequate and would not involve taking over the staff. Another source indicates that the parties are in discussion on terms with the price of $20 that the stock traded at today being within the ball park of where an offer could be at. By next week a clearer picture should emerge our source advises.
One name said to be associated with the one of the offers is Josef Bogdanovich one of the investors involved in the takeover of Hardware and Lumber.
It’s unclear if the planned acquisition by Bogdanovich if successful would be placed under the Hardware and Lumber umbrella which would make economic sense as it would lead to economies of scale in a number of different areas.
The interest comes against the back ground of Berger having recorded the highest level of profit ever at $316 million up from $122 million in 2016, with IC Insider forecasting earnings of $2 per share or $430 million for the year ending March 2018.
Berger closed trading at $6 at the end of 2016 and is up 233 percent for the year to date and is the second best performing main market stock for the year second only to Pulse Investment that is up 360 percent. Berger has been in IC TOP 10 since this year and in the TOP 5 Main market from inception on September 9 last year.

Honey Bun’s sales up margin down

Honey Bun Sales up 17% in Q2

High riding Junior Market listing, Honey Bun enjoyed a huge bounce in profit in the year to August 2016, but in 2017 it not only failed to repeat that performance but ended up with reduced profit in its latest half year results.
A fall in gross profit margin and slow growth in revenues were the major contributing factors for the decline. Gross margin, fell to 43 percent of sales down from 46 percent in 2016 for the first quarter and 43.6 percent for the six months from 46.7 percent for the half year in 2016.
Profit before tax for the March quarter fell 12 percent to $45 million and for the six months the company best known for its pastries suffered an 11 percent decline in profits to $91 million from the prior year.
Profit after tax for the quarter chipped in $40 million versus $49 million in 2016 and for year to date March $77 million compared with $95 million for the same period last year. Earnings per share ended at 8 cents for the quarter and 16 cents for the half year.
In the second quarter of financial year 2017 sales increased by $53 million or 17 percent over the corresponding period in 2016, to reached $368 million with the pace of growth coming well ahead of the 7 percent increase for the year to date. Revenues for the half year rose $73 million to end at $680 million.

One Honey Bun’s Products.

form a major part of sales during Easter and the timing of the important Christian season, can result in big sales shift. Importantly, while all Easter sales would have been included in the 2016 half year results, with Easter falling towards the end of March 2016. For 2017, with Easter falling in mid-April, would have resulted in a shift in some revenues coming in the June quarter. The 17 percent sales increase in the second quarter is therefore far more impressive than it appears on the surface.
“Administrative, selling and distribution costs combined increased by 20 percent mainly due to the investment in capacity building programmes to facilitate business growth” Michelle Chong, the company’s CEO stated in her report to shareholders. Honey Bun’s corporate income tax incentive was reduced from 100 percent to 50 percent.
Honey Bun declared an interim dividend of two cents per share payable on June 1, to shareholders on record as at May 17. The stock will start trading ex-dividend, on May 15, 2017. The company last paid a dividend of 2 cents on January 9, in June 2016 a dividend of 3 cents per share was paid.