Iron Rock profit for the quarter

Gross premium grew 27 percent at Iron Rock for the first nine months of 2020, from $475 million to $603 million and 16 percent for the third quarter, from $156 million to $181 million, but net premium declined 28 percent for the quarter and 20 percent for the nine months to September.

Iron Rock hits 52 weeks’ high of $4.07 on Friday.

Net premium income dropped from $155 million to $124 million in 2019 and $47 million to $34 million for the third quarter. The current year’s operation is characterized by mixed fortunes in varying areas, resulting in the company recording a net profit of $4.6 million for the September quarter against $1.6 million in the third quarter of 2019. The company did not fare well for the year-to-date, with a loss of $13 million, 36 percent higher than the loss of $9.6 million for the same period in 2019.
Investment income and foreign exchange gains contributed significantly to the 2020 performance as they negated underwriting losses that fell 38 percent for the quarter to $19 million from $30 million. Other income dropped 27 percent for the quarter to $23 million and 12 percent for the year to date at $51 million. For the three months to September, a five percent decline in investment income to $9.6 million along with a 66 percent drop in gains from the sale of investment for the quarter to $6.6 million contributed to the decline in other income for the quarter.
A 10 percent rise in investment income pushed earnings for the nine months to $31 million. Investments gains fell 67 percent for the nine months, from $25 million in 2019 to $8 million. The above declines were offset by a 217 percent rise in foreign exchange gains, from $5 million to $12 million, helped to cushion the negative performance of other income category and resulted in the overall loss in the period increasing year over year.
A 46 percent increase in commission earned pushed revenues in this category to $29 million on the latest quarter from the year-ago period with $20 million with a jump of 48 percent for the year to September to $75 million from $51 million. Commission paid grew 14 percent to $24 million from $21 million in the third quarter and rose 25 percent to $68 million for the nine months.
Underwriting loss came in at $64 million, 5 percent better, for the nine months to September compared to a loss of $68 million for the first nine months of 2019. Underwriting loss for the quarter improved markedly from $30 million to $19 million primarily due to a sharp fall in claims and a big improvement in commission earned.
Operating expenses for the quarter rose just two percent to $43 million, with a 15 percent increase for the nine months from $119 million to $137 million. The profit results generated earnings per share of 2 cents for the quarter and a loss of 6 cents for the nine months. The stock last traded at $2.80 on the Junior Market of the Jamaica Stock Exchange.
Net cash used in operating activities amounted to $40 million. Company assets stood at $1.4 billion, including cash and equivalents of just $40 million, various investments of $693 million, insurance and other receivables of $152 million and reinsurance assets of $383 million. Total liabilities stood at $861 million, comprising mostly insurance claims provisions and other amounts payable. Shareholders’ equity declined to $495 million, at the end of the period, from $540 million in the same period in 2019.

Q4 profit jumps 76% for Honey Bun

The Easter bounce in earnings never happened for Honey Bun with sales in the March quarter up 13 percent and the June quarter down 7 percent, but fourth quarter sales compensated for the June fall out, increasing a strong 15.5 percent.

Rising profit at Honey Bun

Profit after tax in the fourth quarter rose a healthy 76 percent to $54 million from $31 million in 2019, bettering the 21 percent rise in the June quarter, to $20.4 million from $16.7 million. For the year to September, profit increased just 6.6 percent to $167 million from $156 million in 2019.
Sale revenues rose 15.5 percent for the quarter, to $432 million from $374 million but rose 8.5 percent for the year, to $1.675 billion from $1.544 billion in 2019. The company manufactures and distributes baked products in Jamaica and overseas, with overseas revenue less than 10 percent of gross sales revenue.
Historical profit performance has not been exhibited a predictable pattern, partly due to expansion related cost. Profit jumped sharply in 2016 from 2015 but dipped in 2017 and again in 2018 but rose in 2019 as a recent expansion allowed for increased sales, with the latest period continuing to reflect growth but muted by the COVID 19 dislocations.

One Honey Bun’s Products.

Notwithstanding the profit performance that may present a chequered path, the company has one of the best management teams of Junior Market companies to build-out the capacity for continued growth in revenues and increased efficiency.
Gross profit margin moved up from 46 percent in 2017 and has been consistent at 48 percent since 2018 and resulted in gross profit rising nine percent to $799 million from $745 million.
Administrative and other expenses rose just one percent to $295 million, while depreciation charges relating to administrative expenses increased 28 percent to $48 million. Selling and distribution expenses rose 17 percent to $292 million from $250 million in 2019.
The company employed an average of two hundred and seven workers during the year, up from one hundred and eighty in the 2019 period costing $428 million compared to $406 million in 2019.
Finance cost was negligible at just over $1 million for the year.
Earnings per share came out at 35 cents for the fiscal year. The stock traded at $4.83 on the Junior Market of the Jamaica Stock Exchange at a PE ratio of 14 times earnings. ICInsider.com is forecasting 55 cents per share for 2021 at a PE of 9 times. Net asset value is $1.85, with the stock selling at 2.6 book value. The company paid a dividend of 8 cents d 20uring the year.
Gross cash flow brought in $260 million but increased working capital reduced the amount marginally to $253 million and payment of dividends amounting to $38 million acquisition of fixed assets amounting to $119 million and the payment of $27 million in taxation left $98.5 million to be added to funds on hand at the start of the year. Current assets ended at $444 million, including inventories of $71 million, receivables of $73 million, cash and bank balances of $297 million. Current liabilities stood at $148 million. At the end of the year, shareholders’ equity stood at $870 billion, with borrowings at just $26 million.

Q2 profit up at Carreras

Cigarettes are no longer the in-demand and sexy product of former years, nor are stocks of companies involved in the product in strong demand either.
It is against that background that the former highflier and Jamaica Stock Exchange-listed Carreras is to be viewed. But stocks of these companies are sought after by many who see great value in the high dividends paid by them, even if growth in profit is moderate. Years of increased prices on the product, mostly fueled by increased taxation, stymied demand and affected the profitability of the company. For the current year, aftertax profit climbed 11 percent for the September quarter to $911 million from $822 million but dropped 11 percent for the year to date from $1.75 billion to $1.56 billion. Taxation on profits climbed 10 percent in the quarter and the half year to $308 million from $279 million and $531 million from $591 million respectively.
Before tax charges, profit climbed 11 percent for the September quarter to $1.2 billion, up from $1.1 billion in 2019 but dropped 11 percent for the year to date from $2.34 billion to $2.1 billion.
Operating profit climbed by 12 percent for the quarter to $1.2 billion from $1.1 billion but decreased 10 percent for the half year to $2.1 billion from $2.3 billion in the same period in 2019.

Carreras leading brand

Revenue grew 8.5 percent for the quarter to $3.46 billion from $3.2 billion in 2019, with a seven percent drop for the six months to September from $6.64 billion to $6.15 billion. The revenue includes special consumption tax of $2.6 billion, two percent less than the similar period in 2019.
Cost of sales grew nine percent for the quarter from $1.61 billion to $1.76 billion and fell by six percent for the year to date from $3.3 billion to $3.1 billion. Gross profit improved by eight percent for the quarter from $1.58 billion to $1.7 billion but shrunk nine percent for the six month period from $3.3 billion to $3.1 billion. The gross profit margin for the quarter and the six months stood at 49 percent, down a single percentage point from the respective corresponding periods.
Administrative, marketing and distribution expenses fell one percent for the quarter and three percent for the first half of the fiscal year, to $490 million and $999 million, respectively.
The company is in excellent financial health having generated cash inflows from operations of $1.4 billion and after paying $1.6 billion in dividends cash and bank balances stood at $1.8 billion. Current assets ended at $3.53 billion inclusive of accounts receivables of $1.3 billion, with cash funds and inventories making the rest. Current liabilities stood at $2.05 billion. At the end of September, shareholders’ equity stood at $1.8 billion.
Earnings per share came out at 18.76 cents for the quarter and 32.18 cents for the half year. ICInsider.com forecasting 80 cents per share for the fiscal year. The stock last traded at $6.50 on the Main Market of the Jamaica Stock Exchange with a PE ratio of 8.3 times 2021 earnings.
A dividend of 17 cents per share will be paid on December 16, bringing the payments in the year to 64 cents, for a yield of 10 percent on the current price.

Berger Paints Q3 profit surges

Add your HTML code here...

Profit before taxation soared an outstanding 524 percent for Berger Paints for the third quarter, but that was insufficient to wipe out the losses incurred in the first and second quarters, amounting to $63 million.  

Berger Paints Q3 profit jumps.

For the quarter ended September 2020, the company recorded a profit before tax of $58 million, up from $9 million for the corresponding quarter in 2019.
Taxation climbed 700 percent for the quarter from a loss of $1.8 million to $14.7 million for the quarter but dropped by 162 percent for the year from $10 million to a credit of $6 million. Net profit came in at $43 million for the quarter, a 481 percent jump over the comparative quarter’s figure of $7.4 million.
Profit after tax dropped 151 percent from $40 million to a loss of $20 million for the nine months period after-tax, losing $26 million, for the nine months to September, compared to a profit of $50 billion at the end of September 2019. Heading into the traditional festive season, Berger will be hoping to close out the fiscal year on a high note with a strong increase in the final quarter profit.
Revenue improved by eight percent for the quarter from $534 million to $574 million but fell nine percent from $1.63 billion to $1.49 billion for the nine months to September.
Direct Manufacturing expenses fell by 29.7 percent for both the quarter and the year to date, recorded at $304 million and was down 26 percent to $763 million respectively. Gross profit jumped 103 percent for the quarter from $150 million to $304 million and increased 20 percent for the year to date from $609 million to $732 million, with gross profit margins of 53 percent for the quarter, up from just 28 percent in 2019 and 49 percent for the 2020 nine months, up from 37 percent in 2019. The input in paint production is heavily based on petrochemicals as such a fall in the price of oil on the world market would result in reduced production cost for the company.
Depreciation jumped 78 percent for the quarter to $20 million and a 58 percent increase to $45 million for the year. Other operating expenses declined 8 percent for the quarter from $118 million to $108 million and saw a 25 percent rise for the year from $262 million to $327 million. Other income for the quarter stood at $7.2 million for the quarter up from just $182,000 and at $7.7 million for the year to date from $54,000 in 2019.
The company implemented new information technology last year, which the company claims are working well. “The recently deployed Enterprise Resource Planning (ERP) system has settled and has been providing Management with key insights to allow for a deeper appreciation of the business drivers and, with that, quicker decision making. Although a relatively new deployment, it is already contributing value to the business,” the Chairman, Adam N. Sabga, remarked in a statement accompanying the quarterly.
Net cash inflows generated cash of $21 million, but a reduction in amounts due to payables and fellow subsidiaries resulted in cash from operating activities was an outflow of $190 million and capital spend and loan payments increased cash outflows to $263 million. Current assets stood at $1.37 million inclusive of Inventories of $509 million, Receivables of $443 million and cash and bank balances of $306 million.  Current liabilities tallied $572 million inclusive of $126 million due to the immediate parent company and $369 million to fellow subsidiaries. At the end of September, shareholder’s equity stood at $1.1 billion.
Earnings per share came in at 20 cents for the quarter and a loss of 10 cents for the nine months to September and ICInsider.com projects full-year earnings of $2.25 per share with a rise to $2.80 in 2021.
The stock is currently trading at $11.85 on the Main Market of the Jamaica Stock Exchange with a PE ratio of 5.3 times 2020 earnings.

Good news drive interest in Jamaican Teas

Shareholders of Jamaican Teas approved a three for one stock split effective November 30 at a meeting held by the Company on Tuesday. The record date for the split is Monday, November 30, but the stocks go ex split on Friday, November 27 and will commence trading at the post-split price on that day.

John Mahfood CEO and Director of Jamaican Teas addressing the EGM.

In an update to shareholders at the meeting on recent developments within the Group and the outturn for the year to September, they were advised of the continued growth the Group experienced since listing in 2010 with equity moving from $392 million to $1.8 billion at the end of September, this year. Management advised that helped by good results for 2020, the Group moved from a billion-dollar entity to a $2 billion one measured by sales that closed the past fiscal year at $2.2 billion.
Management considers one of the highlights of the recently concluded quarter to be the strong 65 percent gain in export sales over the prior year as well as exports accounting for 65 percent of total manufacturing sales in the quarter. The level of exports meets one of the objectives set at the time the Company went public in 2010.
Early indications and feedback from our overseas customers point to a continuation of the positive trend in exports for the 2021 financial year, the meeting was told.
While exports were dominant, domestic sales did relatively well, with local manufacturing sales increasing 17 percent over 2019. Overall, sales climbed 44 percent to $407 million in the fourth quarter, shareholders were informed. The Real estate division contributed $240 million in sales and is set to contribute around $160 million in the December quarter.
The Group had a disappointing year in the investment division, as it incurred a loss with the fall in the value of local investments but saw some improvement in the second half of the fiscal year, with profit in both quarters. Management expressed the view that there should be an improvement in its fortunes in the new year.
Net profit attributable to Jamaican Teas for the quarter was $131 million, a decline of 27 percent from the $180 million profit in the corresponding quarter of the previous year. For the full year, net profit attributable to Jamaican Teas was $210 million, a decline of 47 percent from the $400 million generated in the previous year.
After the year-end, Jamaican Teas had increased sales of 47 percent in October 2020 over 2019, with export up a robust 85 percent and a much less robust 10 percent for domestic sales. Orders in hand for November suggest a continuation of the positive trend seen in October.

Jamaican Teas’ shareholder – Mr. Lanzel Bloomfield addressing the EGM

The Group will be booking more real estate sales in the December quarter. With the above developments, management expects a good first quarter for the financial year ending September 2021. The Group plans to commence a major expansion of the factory to meet the increasing demand for its manufacturing products.
Since the company advised the JSE on September 29 that the board would meet to set a date for the three-for-one stock split, the price rose by 56 percent to $6.70. The stock traded at $4.30 on the day of the announcement. The release was posted after trading closed. The next trading day, the price jumped to $4.83 with 161,040 shares trading. On the first day of October, the price moved to $5.02 with 1,099,894 shares trading. The stock traded at $5.50 on Monday last week. On Tuesday, it traded at $5.99 and moved $6.30 on Wednesday and $6.70 on Thursday and Friday.

QWI best performing listed fund

As of Friday, the worst-performing equity-based listed fund has the highest valuation relative to net asset value (NAV). The best performing fund is currently beating the performance of local stocks by a huge margin, following outperforming the market in 2019, but has the highest discount to NAV currently.
Since the start of the year, QWI Investments NAV outperformed the local stocks with the NAV down 16.5 percent while local stocks are down on average 31 percent, with investors marking the price down more than other equity funds. Mayberry Jamaican Equities NAV is down 38 percent from the start of the year, to underperform the market, but the stock is selling now selling at a moderate to the NAV.  The NAV for Sagicor Select Funds – Financial is down 28 percent for the year so far, while the Manufacturing & Distribution fund is down 23 percent but the discount to NAV is far lower than QWI.
The disparities in valuing the stocks in the sector is a reminder that making money in stocks is not as difficult as many think, sometimes it requires observance, patience and a bit of logic and here history can be an excellent teacher.
Commodities such as stocks, currencies and other traded assets form patterns over time, persons following these patterns well can profit from them above the average.
When there are major variations from normal patterns, prices will move in one direction or the other and this is one way to make big gains for the keen observer. This is the situation now evident in the stocks of listed funds. When coupled with positive bullish technical signals for the Junior and Main Market, persons investing in some of these funds could do very well in the new few months. The same applies to equity-linked unit trust that declined in value, with the fall of local stock prices earlier this year.
Stocks trading at a valuation below the market or below the historical valuation usually indicate undervaluation and are candidates for gains. The reverse is also true, suggesting that investors should consider selling these if the situation exists.
The patterns shown by local listed funds makes for interesting reading suggesting there is money to be made by investing in some of them.

Mayberry Jamaican Equities is the worse performing listed fund in 2020,

QWI Investments announced its NAV per share as of November 20, at $1.06, a gain of 2 cents for the past week. At the same time, the stock closed at 72 cents, a discount of 32 percent to the net asset value. While the NAV increased, the stock price has fallen to stretch the already overly deep discount. A return of the stock price to NAV would provide a return of 41 percent on the current stock price.
Sagicor Select Funds – Financial NAV this week is 83.8 cents, with the stock at 64 cents on Friday, for a discount of 23.6 percent. At the end of September, the NAV was 83 cents and the stock price 60 cents for a discount of 28 percent. The NAV is at a discount of 12 percent for the Manufacturing & Distribution fund with NAV of 79.7 cents with the stock price on Friday closing at 70 cents, at the end of September, the stock traded at 70 cents with the NAV at 79 cents, with a discount of 12.4 percent.
Mayberry Jamaican Equities discount to NAV at November 18 is 12.8 percent with the NAV at $8.80 and the stock priced at $7.80, at the end of September the NAV was $8.30 and priced at par with the last traded price of $8.30.
The discount to net asset value for QWI narrowed in June, widened again in August but narrowed again in September and has now widened again, with the value rising and the price dropping. The average discount from the start in October 2019 is 21 percent with a low of 5 percent on March 27 and a high of 33 percent in July. The average discount from the start of trading is 18 percent up to the end of June, which is closer to the discount of the others.

Record profits at Barita

Barita Investments recorded the highest profit in its history, with the group delivering an impressive $2.7 billion profit after tax for the year ended in September. The company was bettering by 59.4 percent, the profit of $1.7 billion, a then-record for 2019 and continuing a stunning transformation of a former sleepy little family dominated company that few investors paid attention to.

Barita public stock offer pulled money away from other JSE stocks.

Those sterile days seem to be behind it as the company posted another quarter of strong results to September, with after tax profit jumping 158 percent to $727 million from $285 million in 2019. Earnings per share for the quarter ended at 88 cents and $3.29 for the year.
For the latest quarter, revenues climbed 17 percent from $1.16 billion to $1.36 billion and rose a solid 29 percent from $3.98 billion to $5.14 billion for the full year. There were major shifts in the lines of income generated during the year. Net Interest income rose a robust 35.5 percent from $650 million to $881 million for the year, while Fees and Commission Income more than doubled to $1.84 billion from $847 million. Foreign exchange trading brought in $978 million versus just $199 million in the prior year. Investment activity suffered from a fall, with $1.36 billion generated in 2020 versus $1.94 billion in 2019. September quarter Investment activity revenues declined even more than for the year with an income of $701 million in 2019 versus just $251 million this year.
While the revenues were growing attractively, expenses grew modestly in the final quarter by two percent, moving from $697 million to $710 million, but climbed a more robust 32 percent for the year from $1.53 billion in 2019 to $2 billion. Tax liability dropped sharply from $742 million in 2019 to $393 million, despite the rise in pretax profit.
The group’s rapid transformation has some investors stunned, wondering if the surge in profit for the past two years is real and lasting. Oblivious of those concerns, local and overseas’ based investors piled into a public issue of shares in September, priced around $50 each and invested $13.5 billion of fresh capital in the company after the issue was heavily oversubscribed. In September 2018,

Shareholders at Barita Investments AGM.

shareholders’ equity was just $3.3 billion that has now jumped to $27.7 billion with the recent capital raised, helping to double the amount shareholders have invested in the company.
There is more growth to come with the new capital placing them in a much stronger financial position. The group has not yet taken full control of the enormous potential for growth from their pool of managed funds. The expanded capital base places them in a good spot to become even more aggressive to undertake business deals or acquire other businesses to merge with existing ones.
The company now has $70.5 billion assets comprising, amongst others assets, Cash funds of $5.7 billion, marketable securities of $8.5 billion, other investments of $48 billion, and loans of $1.7 billion. On the liability side, repurchase agreements amount to $34 billion.
The stock trades on the Jamaica Stock Exchange at $84.50 with a PE of 25.5 based on 2020 earnings, that multiple should fall with the 2021 results that will start being released with the first quarter due late January.

Seprod’s sugar closure sweetens profit

Seprod’s costly journey into a new difficult area of sugar manufacturing resulted in billion-dollar losses for the group. That management chooses to take on the worse performing and most difficult sugar operation in Jamaica raises some fundamental questions about corporate decision making, but then sometimes experience teaches wisdom.
After shedding the above loss-making business, profit from continuing operations surged 351 percent to $1.3 billion for the September quarter, up from just $285 million in 2019, but the jump benefited from $780 million, generated from other operating income, with $762 million of it being gains realized on the sale of a property.
Without the additional boost from the property sale, profit from continuing operations would stand at $551 million for the quarter, an increase of 94 percent, and $1.8 billion for the nine months to September, an increase of 52 percent. Earnings per share came out at $1.75 for the quarter and $3.38 for the nine months to September but would stand at 75 cents for the quarter and $2.41 for the year to date when adjusted for the one-off gain.
Revenue saw a sharp increase of 23 percent for the quarter to $10.1 billion from $8.2 billion and more moderate growth of 16 percent for the nine months to September to $28.7 billion from $24.5 billion in 2019.
Direct Expenses grew 12 percent for the quarter from $5.3 billion in 2019 to just under $6 billion in 2019, and 15 percent for the year-to-date from $15.8 billion to $18.1 billion. Gross profit margin increased to 41 percent for the quarter from 35.2 in 2019 and 37 percent for the nine-month period from 36.4 percent. Gross profit (GOP) jumped 42 percent for the September quarter moving from $2.9 billion in 2019 to $4.1 billion in 2020. GOP increased 17 percent to $18 billion from $15.8 billion for the nine months to September in 2019.
The Manufacturing segment generated revenues from third parties of $7.26 billion, up from $6.7 billion in 2019 while, Distribution accounted for revenues of $21.4 billion in 2020 and $18 billion in 2019. Segment results for the Manufacturing amounted to $2.47 billion in 2020 from $2 billion in 2019, while Distribution contributed $1.36 billion from just $684 million in 2019.
Despite a 52 percent increase in administrative and other operating expenses from $2.1 billion to $3.3 billion, profit before finance and other costs grew by 159 percent for the period from $651 million to $1.7 billion.

Some of Seprod”s products.

Loss from discontinued sugar manufacturing operations contributed to a loss of $31 million for the September quarter and $47 million for nine months. Total comprehensive income stood at $1.3 billion for the quarter, up from a loss of $124 million, and $2.6 billion for the nine months to September, up from $470 million in 2019.
Gross cash flow from operating activities stood at $4 billion, and working capital pulled the amount down to $2 billion. Dividend payment of $367 million and acquisition of property net and loan receipts of $1 billion saw net funds for the period increasing $1.6 billion to end at $3 billion. At the end of September, shareholders’ equity stood at $16.5 billion, while $14 billion was due from borrowings. Current assets ended the period at $17 billion including, Inventories of $6 billion, receivables $7 billion and cash and bank balances of $3 billion, while Current Liabilities stood at $9.6 billion with current loan liability amounting to $3.6 billion.
The stock is currently trading at $60.75 on the Main Market of the Jamaica Stock Exchange. With the most profitable period being the December quarter, IC Insider.com is forecasting earnings of $4 per share for a PE of 15.2 based on 2020 earnings.
The group is involved in the Manufacturing and Distribution of various household goods for the local and overseas markets, including cereals, flour, milk, cooking oil, margarine, to name a few. the stock has moved up in price since the results, historically, it has delivered some of the best returns for investors in the local market over several years. It’s a good long term investment.

Q4 profit doubles at Tropical Battery

Recently listed Tropical Battery saw profit after tax soaring 107 percent in the September quarter, to $27 million from $13 million in 2019, bettering the nine-month increase of 18.6 percent over the 2019 period for pretax profit. For the year to September, profit rose a more modest 16 percent to $73 million from $63 million in 2019.
Sale revenues
rose just 2.6 percent for the quarter, to $506 million from $493 million in 2019, but rose 7 percent for the year to date, to $1.87 billion from $1.74 billion in 2019.
The September quarter benefited from improved profit margin to 31.8 percent from 29.9 percent in 2019 and rose to 31.3 percent for the year, from 30.2 percent for 2019. Gross profit rose 9 percent in the quarter to $161 million from $147 million in the previous year and increased 11.2 percent for the year, to $585 million from $526 billion in 2019.
Administrative expenses grew 11 percent to $123 million in the quarter and 10.5 percent in the year period to $456 million. Finance cost rose in the quarter, to $13 million from $9 million in 2019 and $19 million to $38 million for the year.
Gross cash flow brought in $109 million but growth in receivables, inventories, addition to fixed assets offset by loan inflow, proceeds from the sale of shares and reduced payables, cash funds ended at $261 million. Net current assets ended the period at $827 million, including trade receivables of $314 million, amounts due from related parties at $177 million and cash and bank balances noted above. Current liabilities closed the period at $229 million. At the end of the year, shareholders’ equity stood at $776 billion, with borrowings at just $415 million.
“As a part of our Strategic 2021 Growth Plan, we will be focusing on creating shareholder’s value through acquisitions and partnerships of aligned profitable companies in Jamaica and across the Caribbean region. To this end, we have entered into discussions with several key partners to assist in identifying suitable acquisition targets”, March Melville, Chairman and Alexander Melville, Managing Director, stated in a jointly signed report accompanying the quarterly.
Earnings per share after tax came out at two cents for the quarter and six cents for the year. The company’s net asset value is 68 cents, with the stock selling at 76 percent above book value. With the company profits now being free of taxation, having listed on the Junior Market of the Jamaica Stock Exchange, earnings are adjusted to 8 cents, giving it a PE ratio of 15 times earnings, based on the stock price of $1.20 the traded at on Friday. IC Insider.com is forecasting 10 cents per share for a PE of 12 times 2021 earnings.

Q3 profit rises 33% at Grace Kennedy

Grace Kennedy continues to enjoy a phenomenal year, with profit attributed to the company’s shareholders, rising 33 percent to $1.68 billion for the September quarter, from $1.26 billion for the 2019 third quarter and 35 percent for the nine months to September to $4.4 billion from $3.27 billion the corresponding period in 2019.

Don Wehby CEO of Grace

Taxation more than doubled in both periods, but profit before tax grew 49 percent in the third quarter to $2.8 billion and 51.5 percent to $7.3 billion for the nine-months.
Total comprehensive income increased by 5 percent for the three-month period to $2.2 billion but dropped by 37 percent for the nine months to September, from $9.2 billion to $5.8 billion.
The group had one of the best years for growth in revenues so far, with a rise of 16 percent for the quarter to $29.6 billion, from $25.5 billion in 2019 and up 12 percent $86 billion from $77 billion for the nine months. The previous best revenue performance was back in 2009 with a full-year increase of 19.7 percent and then 2015, with an increase of 12.6 percent, thereafter growth declined annually to 2019. Revenues grew 10.7 percent in 2016, 5.5 percent in 2017, 4.8 percent in 2018 and just 5.7 percent in 2019. According to the Managing Director Don Wehby, “the strong growth in revenues was fueled by the food division and particular international food business.”
Contributing to the 2020 growth is added revenue brought in with the acquisition of the majority shares in Key Insurance helping to drive revenue for the Insurance segment by 28 percent over 2019 to garner $7.7 billion. Food and trading segment continues to account for the lion’s share of the revenue tallying $68 billion for the nine months period, an 11 percent increase over 2019. Revenue for the Banking segment increased just 3 percent to $4.7 billion while Money Transfer grew 12 percent to $6.5 billion.

Grace Kennedy new headquarters in downtown Kingston

Expenses inclusive of net impairment losses increased 16 percent to $27.5 billion for the quarter and 12 percent to $81 billion for the year to date over the corresponding periods. While separating direct cost from the administrative cost in their audited accounts, Grace continues to short change investors by lumping all costs together in their interim reports.
Net Cash generating operations brought in $9.7 billion. Total assets grew by eight percent to $168 billion with growth in investment securities and receivables but a decline in inventories. At the end of September, shareholders’ equity stood at $56.5 billion and borrowings at $25 billion.
Profit for the quarter equates to Earnings per share of $1.69 and $4.47 for the nine months and should exceed $6.50 for the full year. The stock last traded at $58 on the Main Market of the Jamaica Stock Exchange with a PE ratio of 9 times 2020 earnings.