More record profits for Limners & Bards

March 20, 2021 by

Limners and Bards reported strong first quarter results with rising revenues and profit for the first three months of the new fiscal year. Revenues for the quarter ending in January this year grew a strong 36 percent over the 2020 period to $356 million from $263 million, with profit rising 36 percent to $67 million as cost of operations rose 38 percent over the 2020 period.
Profit for the quarter is more than 50 percent of the profit of $127 million made in the fiscal year ending October 2020.
The growth in revenues continues the increase of 31 percent enjoyed in 2019 over 2018 and 44 percent in 2020 over 2019.  “The revenue growth is attributable to increases in the company’s core business, media placement (up $21.3 million or 16.6 percent) and production (up $72.8 million or 92.3 percent). These increases were to some extent offset by reduction in advertising agency (down $0.9 million or 1.7 percent) during the period,” Steven Gooden, Chairman and Kimala Bennett, Chief Executive Officer, stated in their report to shareholders in their comments on the results for the first quarter.
The principal activities of the company is that of an advertising and public relations agency and have several large Jamaican businesses as clients.

Kimala Bennett, Chief Executive Officer of The Lab.

Cash and cash equivalents climbed to $342 million from $249 million at the end of the first quarter in 2020 but is down from $380 million at the end of the fiscal year ended October last year after the company paid $70 million in dividends. Current assets ended at $560 million, with current liabilities at $157 million, leaving them in a healthy working capital position.  Shareholders’ equity stood at $461 million at the end of the 2021 first quarter, slightly lower than the $464 million at the end of October last year.
The company seems set to nearly doubling profit for the full year, with a profit of approximately $200 million and earnings per share of 20 cents. The stocks traded at $2.80 on the Junior Market of the Jamaica Stock Exchange on Friday last, with a PE of 14 based on projected earnings.
The stock seems to be meeting resistance at $3, after trading at a record high shortly after listing in 2019 when it hit $4. This past week following the results, it traded at $2.95 when 1.1 million units traded, followed by 3.1 million on Friday, the highest daily volume for some time. Prior to December 2019, it hit $3 and again in December 2020, $3.10 and then retreated, but could move up to $3.30 with a PE of 16.5 times this year’s earnings.

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Flat profits for Scotia Group

March 17, 2021 by

Scotia Group reported a marginally lower profit net of taxation of $1.75 billion for the quarter ending January, compared to $1.78 billion in 2019, despite the impact of the COVID-19 pandemic on its operations directly and that of their clients.

Scotia Group hiked dividend.

Profit for the quarter flowed from total revenues of $11.74 billion, similar to the amount earned in the comparative period last year. Net interest income fell to $5.8 billion from $6.2 billion in 2019, while provision for credit losses dropped from $895 million in 2019 to $430 million this year. Prior period results included additional provisions of $408 million (one time impact), based on adopting a more prudent approach in determining credit loss provisions.
According to the group’s directors,“ total revenues continue to be heavily impacted by the COVID-19 pandemic as evidenced by the ongoing reduction in interest rates offered in the market, leading to a reduction in the Group’s net interest income coupled with the decline in transaction volumes resulting in lower net fee and commissions as well as insurance revenues.”
Other income grew 10.9 percent or $535 million over 2020. Net fee and commission income amounted to $1.7 billion, a reduction of $339 million or 16.8 percent compared to the 2020 inflows, due partially to lower transaction volumes stemming from the COVID-19 pandemic in conjunction with the continued execution of the Group’s digital adoption strategy.
Insurance revenues fell $423 million or 40 percent to $634 million due to the reduction in premium income stemming from the pandemic as well as lower actuarial reserve releases. Net gains on foreign currency activities and financial assets amounted to $2.2 billion, an increase of $333 million or 18.3 percent above the prior year. Other revenues climbed by $963 million from just $9.5 million in 2020 is attributable to gains realized on the extinguishment of debt facilities.
Operating expenses amounts to $7.8 billion for the period and reflected an increase of $656 million or 9.2 percent. “This was primarily attributable to an increase in other operating expenses of $804 million, which was partially offset by the reduction in salaries and staff benefits of $196 million. The increase noted in other operating expenses was due to provisions for non-salary related restructuring and other technology expenses. Excluding restructuring and other one-off expenses, operating expenses would be flat compared to Q1/2020,” the Group reported. Asset tax expenses grew year over year by $23 million or 1.9 percent to $1.3 billion, given the increase in the Group’s assets.

Scotiabank gained $1 on Friday.

Total assets increased year over year by $10 billion to $553 billion at the end of January. This was predominantly a result of the growth in cash resources of $17 billion or 15 percent and loan portfolio of $4.5 billion or 2.1 percent, which was partially offset by a reduction in investments of $3.1 billion or 2 percent, and other assets of $8.1 billion or 13.4 percent.
The loan portfolio grew by $4.5 billion or 2.1 percent year over year, with loans after allowances for credit losses increasing to $217 billion, down from $221 billion at the end of October last year.
Deposits by the public increased to $342 billion, up from $315 billion in the previous year and up from $337 billion at the end of October.
On a positive note, the holding of profit in line with that of 2020 is a strong positive, even more so as there are large one off costs incurred during the period. The decline in loans since the October year end is negative, but loans grew 3.3 percent between October 2019 and January 2020 and a stronger 4.7 percent from February to April. Growth in the July and October quarters was flat. If the group can return to the growth rate of the first half of the last fiscal year, then profits should start to see an appreciable rise, without it, profit increase will be muted.

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Berger Paints holds some promise

March 12, 2021 by

Berger Paints held the number one spot in ICInsider.com’s TOP15 list for 2021 based on its performance for the nine months ended September 2020, which has changed with the failure for sales growth to continue into the final quarter.
Revenues climbed eight percent in the September quarter to $574 million, with a gross profit of $304 million. Profit suffered a sharp fall in the June quarter, with sales negatively impacted by the partial closure of some businesses resulting from the spread of the covid-19 pandemic in the country. Revenues for the nine months were down, with profit after tax coming in with a loss of $60 million. Revenues for the fourth quarter to December failed to enjoy the level of growth in the September quarter and dipped against the similar quarter in 2019.
Audited financials for the full year show revenue for 2020 of $2.37 billion, six percent below 2019 figures, with the fourth quarter dipping just two percent at $877 million versus $892 million in 2019. Losses suffered in the earlier part of the year were simply too much for the company to overcome and recoup. Profit before tax for the year was down a noticeable 72 percent to $12 million, but profit before tax for the December quarter of $38 million was vastly better than the loss of $9 realised in the 2019 period. The December quarter profit after tax of $32 million was vastly better than the $11 million in 2019.
Direct operating cost declined by 4 percent or just $38 million to $1.22 billion for 2021. Staff cost also declined from $558 million to $512 million.
At $211 million, cash and bank balances fell 64 percent in 2020, down from the $585 billion recorded at the end of 2019 as the company paid down the $655 million owed to fellow subsidiaries by $552 million. Current assets of $1.3 billion include trade and other receivables of $575 million and inventories of $446 million, down from $639 million in 2019.

Berger Paints is one of IC Insider’s TOP 10 stocks.

Current liabilities ended at $484 million for the financial year, down from $1 billion in 2019, with amounts owing at the end of 2020 include $148 million due to the parent company and $102 million due to fellow subsidiaries. Shareholders’ equity closed out the year at $1.15 billion. The only interest bearing debt was for leasing, amounting to $65 million.
Earnings per share for 2020 was just 5 cents compared to 14 cents in 2019. IC.com projects 2021 earnings of $1.50 as the company benefits from recovery of sales that fell out in 2020 due to the effects of Covid and increased sales from a buoyant construction sector, relatively new automotive paints and better data usage from the new IT system.
The stock last traded at $13 on the Main Market of the Jamaica Stock Exchange and is now at the lower end of the ICTOP10 stocks for 2021 at a PE of 9 times 2021 earnings, but it could surprise with better than expected results.

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Guardian Holdings shares set to relist on JSE

March 11, 2021 by

Shares of the Trinidad based and the NCB Financial Group majority owned Guardian Holdings are set to be relisted on Jamaica Stock Exchange (JSE) after an eight year absence from the exchange.
The shares of Guardian were list on the JSE in 2002 initially and remained listed until 2013, when the company decided to voluntarily delist the shares.
NCB Financial Group advises of a decision made on March 4, 2021, by the Board of the Directors of its subsidiary, Guardian Holdings (“GHL”), to pursue the cross-listing of the shares on the Jamaica Stock Exchange, having considered that trading on the exchange has become increasingly dynamic over the years.
The move is in keeping with an ICInsider.com report in 2015 when NCB and Proven Investments were jointly pursuing the acquisition of approximately 36 percent more of GHL shares of the company. Proven eventually backed out and NCB made a bid to acquire an additional 30 percent.
Guardian Holdings reported increased profit for the year ended December 2020 with profit attributable to equity holders rising 12 percent to $774 million from $692 million in 2019 and ended with Earnings per share of $3.34 versus $2.98 in the prior year.
Net income from insurance underwriting activities increased to $1.413 billion, a 47 percent increase over the $959 million reported in 2019 the company reported. Net income from Investing Activities declined from $1,370 million to $989 million, or 28 percent. The Group result in 2020 was not adversely affected by catastrophes as was the case in 2019. Gross Written Premiums increased from $6.367 billion to $6.557 billion or 3 percent.
Guardian last traded on the Trinidad and Tobago Stock Exchange on Wednesday at a 52 weeks’ high of $23.39 with a PE of 7 and with more growth in profit this year the PE is likely much lower.

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Record Carib Cement profit up 70%

February 28, 2021 by

Caribbean Cement reported record profit for the year ending December 2020 from sales that rose 13 percent to $20 billion and up 17.8 percent in the final quarter to $5 billion from $4.3 billion in 2019.
For the year, profit after tax surged 70 percent to $3.2 billion after tax provision of $1.2 billion. The tax charge includes deferred tax amounting to $414 million, down from $664 million in 2019. The results would have been far better but for a billion loss in foreign exchange movement, but interest cost fell from $939 million to $812 million, partially cushioning some exchange losses. Interest cost will fall further in 2021 as the debt load recedes with the strong cash flows allowing for the rapid repayment of the $4.4 billion of long term loans.
Gross profit improved rapidly, surging faster than the increase in revenues with a 26.45 percent increase from $7.2 billion to $9.1 billion. The company also benefited from reducing administrative and other expenses that fell from 2.5 billion to $2.35 billion. The company has contracts that hedge diesel fuel to protect it from major increases in one of the largest cost in its operations.
Earnings per share came in at $3.76 for the year, just ahead of ICInsider.com’s forecast of $3.76. ICInsider.com projects earnings of $5.7 billion with EPS of $6.70 in 2021.
Cement generated positive cash flow of $6.5 billion, repaid $4.7 billion in loans and paid $1.5 billion to redeem preference shares due to the Trinidad Cement, its immediate majority shareholder. The amount owing for the TCL preference shares is now down to $2.3 billion with loans outstanding at 4.4 billion, of which $3.1 billion is in Jamaican dollars owing to National Commercial Bank and $1.34 billion due to Cemex Espana in US dollars. The reduction in overseas debt has significantly reduced the foreign exchange exposure, with 2021 set to benefit from a sharp reduction in exchange losses.
At the end of the year, shareholders’ equity moved to $11.5 billion from $8.3 billion at the end of 2019. The stock is one of the original IC TOP 15 stocks for 2021 in the main market of the Jamaica Stock Exchange and remains in the list but now at 13th position with a target price of $135 in the next twelve months. The company is set to benefit from an improving economy, with low interest rates encouraging real estate development and ownership as well as expansion and rehabilitation of the country’s infrastructure that will consume an increasing amount of cement.
The stock closed at $65 on Friday with eth PE ratio at 17 times 2020 earnings and just 10 times 2021 projected earnings. The company has a strong balance sheet that is getting stronger each year and is moving into a phase where the payment of a dividend cannot be far away. Based on the above, Caribbean Cement enjoys ICInsider.com coveted BUY RATED investment approval.

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2020 a great year for Grace Kennedy

February 26, 2021 by

The year just past may have been a terrible one for many, for at Grace Kennedy, they have much to be thankful for and management wish must be for another repeat performance like 2020.
Grace reports record profit of $6.2 billion attributable to shareholders for 2020, jumping 39 percent from $4.49 billion in 2019 after taxation more than doubled to hit $2.85 billion for an increase of 178 percent.
Profit before tax rose a strong 58 percent compared to 2019 to end at $9.7 billion. Importantly profit before other income jumped a stunning 82 percent to $6.8 billion while other income rose 20 percent to $3 billion. In what was a spectacular year for the 100 years old company, revenues grew 12 percent to $115 billion, surpassing the $99 billion generated in 2019. Direct and operating expenses rose 9 percent to $109 billion. Other comprehensive income brought total profits to $9.2 billion versus $9.26 billion in 2019.
The groups’ segments had a mixed performance, with Food trading profit almost doubling from 11 percent rise in sales while Insurance and Money transfer contributed 21 percent and 26 percent in profit but banking and Investments fell.
“GK’s Food Trading segment saw improved revenue and profitability primarily due to the outstanding performance of its international food businesses. GraceKennedy Foods (USA) LLC showed triple digit increase in gross profit and marked growth in revenue, with the Grace and La Fe brands recording growth and improved margins; and GK’s Jamaican food distribution business recorded strong growth in both revenue and pre-tax profit, coupled with improved operating margins,” a release from the company stated.
The group earned 6.26 per share for the year versus $4.51 in 2019 and the stock price closed on Friday with a last traded price of $84.50 for a PE ratio of 13, well below the market average of 20. ICInsider.com projects 2021 earnings of $11 per share and see the stock heading close to $200 for the year and receives the coveted IC BUY RATED stamp of approval.
Total shareholders’ equity stood at $29 billion at the end of December, up from $27 billion in 2019. the group paid $1.59 billion in dividend during the year, up slightly from $1.54 billion in 2019.

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Cost cuts drive Lasco Manufacturing profit

February 7, 2021 by

Sharp cost-cutting and moderate growth in revenues drove profit at Lasco Manufacturing up 29 percent for the December quarter and 30 percent for the nine-month period.
The performance was even more stunning, with pretax profit jumping a very strong 43.4 percent for the quarter and 36.7 percent for the nine months to $1.3 billion as the company profit became subject to full taxation as of October 12 in 2020.
The company maintained a gross profit margin at 36 percent in the quarter, compared to 2019 but enjoyed an increase to 38 percent for the nine months from 37 percent in 2019. It ended the 2020 fiscal year at 37 percent suggesting the 2021 full-year results will most likely end at 38 percent, in line with the nine months’ margin.
The company reported revenues rising 6 percent for nine months to $6.2 billion but up just 3.5 percent to $2.07 billion for the December quarter. Administrative and other costs fell 20 percent for the quarter to $315 million and for the nine months to December by 12 percent to $982 million.
The principal activities of the company are the manufacturing of soy-based products, juice drinks, water and packaging of milk-based products.

Lasco Manufacturing products

Shareholder’s equity stood at $7.5 billion at the end of December 2020 and borrowed funds dipped to $949 million of which $453 million is due for payment within a year. Cash funds and investments amount to $1.7 billion after the company generated funds before working capital and capital financing needs of $1.5 billion. A dividend of $251 million was paid during the nine months.
Lasco generated earnings per share of 25 cents for the nine months up from 19 cents in 2019, while the quarterly 2020 earnings came in at 7 cents. ICInsider.com projects earnings per share at 35 cents for the year to March and 40 cents for the 2021 fiscal year.
The stock last traded at $4.32, with a PE ratio of 12.3. The stock is undervalued based on the earnings and an average market PE of 15 and a target PE ratio of 20 that many stocks are currently trading around. The target price of $7.

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Jamaican Teas profit jumps sharply

February 6, 2021 by

The Jamaican Teas Group enjoyed an outstanding first quarter with rising sales and profits fueled mainly by strong growth in exports that rose 88 percent over the prior year and accounted for 64 percent of total sales in the quarter and positive contribution from the investment division.

Jamaican Teas traded the most volume on Monday.

Sales rose 41 percent to $611 million and profit attributable to shareholders jumped 321 percent to $117 million from just $28 million in 2019. The improved profit result occurred with profit fully taxed compared to the 2019 quarter that was taxed at 50 percent of the normal rate for Jamaican Teas’ profits.
The real estate division also contributed to improved profits following completion of an apartment complex. The subsidiary QWI Investments, contributed positively to the profit performance following improved investment performance, resulting in the equity portfolio delivering a $143 million increase from dividends and capital appreciation of stocks in the quarter.
The supermarket contributed reduced sales and profit due to continued curfew restrictions on its hours of operation and the closure of schools. Manufacturing sales climbed 48 percent to $428 million for the quarter, with domestic sales increasing just 7 percent compared with a year ago.
First quarter revenues at the Supermarket amounted to $135 million slightly below the $142 million generated a year ago. There was a progressive fall in the rate of decline as the quarter elapsed.
The gross profit margin was a consistent year over year with a 27.5 percent margin for the latest quarter versus 27.4 percent for the 2019 first quarter for the group.
Marketing expenses fell for the quarter by $5 million to $8.7 million resulting mainly from the cost of new products launched in 2019, and not repeated in the latest quarter.
Administrative costs rose moderately by 11 percent to $63 million and Interest expense declined during the quarter resulting from lower interest rates on some borrowed funds. According to the directors in their quarterly commentary, referring to the sale of apartment units they developed, “we have signed contracts and expect to record sales for the last 4 apartments in our second quarter. Manufacturing sales after the end of the quarter are 15% higher in the first 28 days of January compared with a year ago and our quoted investments continued to improve.”
Earnings per share came in at 5.5 cents, 323 percent above the 2019 – earnings of 1.3 cents. ICImsider.com earnings forecast is for 30 cents per share, gains in the investment division could impact it positively or negatively. Based on the forecast the PE ratio at the last traded stock price of $2.75 is 9.2, suggesting a strong upside for the stock assuming a target PE of 20.
Jamaican Teas produces black and green and many herbal teas, soaps and some other consumer product and owns a supermarket and has a subsidiary that invests in local and overseas stocks. The chairman of the group is John Jackson.

Persons who compiled this report may have an interest in securities commented on in this report.

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Some sunshine for NCB

February 5, 2021 by

NCB Financial had some good news to report to investors, but story it is not all sunshine. Net operating income reached $33.78 billion slightly up from $33.3 billion generated for the 2020 fiscal year first quarter, but nearly 25 percent above the September 2020 quarter.
The group could not translate the relatively good news on the revenue front into a positive development in net profit. The group saw a drop in profit attributable to shareholders falling 34 percent to $3.9 billion from $5.9 billion in December 2019 quarter and down from $4.3 billion in September quarter. The fall in profits is directly related to a jump in staff cost of $1.7 billion to $12.3 billion and increased tax on profit.
Loans net of provision for losses crawled by 5 percent to $461 billion from $438 billion at the end of December, in both years and from $453 billion at the end of September 2020. The growth is well down on the double-digit increase that was taking place in prior years, with the March 2020 report showing a 12 percent increase over the previous year. Investment securities rose from $784 billion at the end of 2019 to $855 billion.
Total comprehensive income rose by $7.3 billion to end at $13 billion, up from $6.8 billion in the December 2019 quarter.
The group’s various segment had mixed results. Consumer Banking segment recorded flat operating revenues of $6 billion but suffered a greater loss than in 2019 of $629 million versus $329 million. Payment Services delivered segment profit of $660 million down from $1,096 billion in 2019, from operating revenues that slipped from $2.9 billion to $2.6 billion. Corporate and Commercial banking operating revenues rose to $2.45 billion from $2.26 billion with profit declining modestly from $1.3 billion to $1.23 billion while Treasury and Correspondent Banking suffered a reduction in operating revenues to $2.55 billion from $2.67 billion but enjoyed a bounce in profit from $1.66 billion to $1.77 billion.

NCB Financial Montego Bay branch

Wealth, Asset Management and Investment Banking delivered a 21 percent rise in operating revenues to $5.14 billion from $4.23 billion and contributed a 36 percent jump in profit to $3.6 billion from $2.67 billion. Life and Health Insurance and Pension Fund Management had operating revenues of $11.97 billion down from $12.27 billion but enjoyed a slight pickup in profit from $5.9 billion to $6.3 billion. Operating revenues jumped 26.6 percent in the General Insurance segment to $5.35 billion with profit rising 45 percent to $2.2 billion.
Earnings per share amounted $1.66 down from $2.46 at the end of the December 2019 quarter and $1.82 for the September quarter. The latest quarter contains the full cost of asset tax. At the same time, September does not, in addition there was a tax credit of $1.1 billion for the September quarter and a tax charge of $2.3 billion for the 2020 December quarter and June 2020 coming in at $6.7 billion.
For profit to grow meaningfully, the group needs to be generating double-digit increases in the loan portfolio while maintaining loan losses to acceptable levels. In the 2020 fiscal year, the group incurred a major increase in provision for loan losses. The latest results show this line item to have returned to more normal levels with a provision of $1.17 billion versus $1.57 billion in December 2019 and $4.6 in the September quarter. Other operating cost which came in at $10.5 billion appears to reflect a much higher cost than for the other quarters. In March 2020 the cost was $5.6 billion compared to $$10.6 in December 2019.
The stock is listed on the Jamaica Stock Exchange, with the price now trading around $136.

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Q3 profit rose 18% pretax for the Lab

December 31, 2020 by

Profit jumped 43 percent before tax at Limners and Bard, with revenues surging 41 percent for the third quarter to July this year. The robust third quarter profit did not hold for the final quarter despite a 55 percent jump in fourth quarter revenues to $226 million from $146 million in 2019, with profit inching just a two percent higher for the final quarter from $18.9 million in 2019 to $19.24 million this year.
Full year profit rose 18 percent from before tax in 2019 from $108 million to $127 million and just 41 percent from $90 million after profit tax. There was no tax payable for 2020, following the tax relief benefit now enjoyed from listing on the Junior Market of the Jamaica Stock Exchange.
Revenues increased 44 percent, moving from $632 million in 2019 to $912 in 2020. Cost in generating revenues grew much faster than income, with an increase of 51 percent for the year to $613 million and 68 percent for the final quarter to $154 million.
Administration expenses and other costs rose 55 percent to $241 million for the year and by 54 percent for the October quarter to $54 million as salary related cost jumped 43 percent for the year and directors’ remuneration more than doubled with a rise of 110 percent to $24.6 million. The company’s CEO and the Chairman indicated the sharp increase was due to one executive director serving as a director for a part of the previous year, resulting in the numbers looking distorted. In the July quarterly report accompanying the results, the Chairman, Steven Gooden and Kimala Bennett, Chief Executive Officer commented on increased cost, stated, “these included a systemization initiative and training to assist in efficiencies linked to our growth drivers and a pay-out of 50 percent of our 2019 employee profit share.

Kimala Bennett, Chief Executive Officer of The Lab.

The audited financial statements did not include the comparative 2019 segment results, as is the norm, to allow investors to compare the current year’s figures with those of 2019. In an interview with the Chairman and the CEO, they pointed out that salaries were cut during the uncertainty to business earlier this year. At the same time, the profit share payment was suspended. As the year unfolded, with results looking positive, the board decided to reinstate the full salaries and pay out the profit share for 2019 that was approved earlier in the year, the full cost of which is included in the second half of the fiscal year, the directors indicated. The services of five new employees were engaged in the final quarter, to meet increasing demand in the future, adding to the increase in cost. The directors stated that no decision has yet been made about profit share for 2020 and no provisions are included in the 2020 audited accounts.
The company separates the business in three segments. Revenues for the Media Segment moved from 46 percent of total revenues in 2019 to 53.96 percent in 2020, Production Segment revenues fell as a percentage of overall revenues from 35.77 percent in 2019 to 25.67 percent, while the Agency segment rose from a contribution of 18 percent to 20.4 percent.
Revenue for the Production segment for the year was $234 million just up from $226 million in 2019, with Gross segment profit rising marginally from $100 million to $102 million for a Gross profit margin of 43.6 percent. The Media segment pulled in 68 percent more revenues than in 2019, to reach $492 million, resulting in an increase in Gross profit of 77 percent to $71.5 million and a Gross profit margin of just 14.5 percent. The Agency segment climbed a robust 65 percent to $186 million from $113 million in 2019 and enjoyed a 45 percent rise in Gross profit to $124.7 million from $86 million, with a Gross profit margin of 67.2 percent. Up to the third quarter, the media segment delivered a 60.5 percent growth in revenue amounting to $136 million putting revenue in this area at $362 million and resulting in revenues of $130 million in the fourth quarter.
The Company generated cash flows from operations of $140 million up from $121 million in 2019. After increased working capital needs, repayment of loans, payment of $19 million in dividends and net inflows from movements in fixed assets, the company held on to $89 million of the funds generated and ended with cash and equivalent at $380 million at the end of the year.
Current assets jumped sharply to $560 million from $387 million in 2019, receivables leaped from $84 million to $158 million. The level of receivables amounts to the total revenues generated in the final quarter and that was the case in 2019. Current liabilities amounted to $149 million, up from $83 million in 2019. Borrowings stood at just $65 million. Shareholders’ equity climbed to $464 million from $356 million in 2019.
The strong growth in revenues is positive for the company, however, the production segment, with a high profit margin, was flat during the year, while Media placements, a low contributor to profits grew strongly, with much higher risk associated with it, due to the high level of liabilities it incurs. Strong growth in the Agency segment is excellent as it contributes the most to gross profit and is an area to watch for continued robust growth.
The financial reports indicate some weakness in management, particularly the financing area, but the company is addressing this with the planned employment of appropriate personnel. As indicated above, there is no comparison for the segment accounts and no information on segment assets and liabilities, which is the standard requirement. Past quarterly reports do not contain segment results, which is the norm. These are all areas that point to weakness in critical areas.
The final quarter numbers are of major concern with increased cost wiping out the benefit of a big surge in revenues. The directors’ commentary for the third quarter results speaks to cost rising, but there is no commentary explaining what happened in the final quarter.
The company has been reporting big increases in staff cost for some time, the level of increase suggests that some of these costs relate to direct operating expenses rather than administration and therefore distorts the contents of the data presented to shareholders and withholds pertinent information for better understanding of the contents of the profit out turn.
With nearly two months of the current quarter having elapsed, the directors revealed that the company is on target to meet their forecast so far. After the year end, the company declared a regular dividend of 3.4 cents per share and a special dividend of 4 cents payable on January 22.
In going public, one objective for the use of the proceeds was in funding acquisitions. The directors indicate that they reviewed some potential candidates, but so far, none have met their objectives.
The company reported earnings of just 2 cents per share in the October quarter and 13 cents for the year. IC Insider.com projects 22 cents earnings per share for fiscal 2021, with the stock last trading at $3.05 on the Junior Market of the Jamaica Stock Exchange on Thursday for a PE ratio of 14 and based on 2021 projected earnings.

Filed Under: Company News, Company Results