Lasco Distributors profit surge

August 9, 2023 by

Lasco Distributors stock rose 85 percent since the middle of April but profit results released since then show strong full year results to March, with an increase of 33 percent to 39 cents per share, followed by impressive first quarter numbers almost guaranteeing another big rise in the price over the next several months.
Lasco released first quarter results, in late July, with a rise in pretax profit jumping a robust 57 percent to $602 million and post-tax climbing a solid 38 percent to $448 million from a 17 percent rise in revenues to $7.3 billion from $6.3 billion.
The company generated other income of $68.6 million, surging 142 percent from $28 4 million in 2022, but unrealized investments gains fell from $58 million to $13 million, pushing total comprehensive income to $460 million, 20 percent up from $383 million in 2022.
The cost of goods sold rose at a much slower pace than revenues at 15 percent to $5.98 billion from $5.18 billion. Gross profit jumped well in excess of the rise in revenues, with a 25 percent climb to $1.34 billion from $1.07 billion in 2022.
Administrative and other expenses rose 12 percent to $806 million from $718 million in 2022. Depreciation charge fell from $38.7 million to $31.5 million in the latest quarter, there was virtually no interest cost with borrowings having been repaid.
The quarterly result is continuing” the performance of the prior year, delivering growth in all key segments” John Dasilva, Managing Director, stated in his report to shareholders, and went on to state, “the company continues to invest in consumer focused marketing initiatives while increasing its distribution and product availability across all channels”, in his report accompanying the quarterly.
The operations, generated $484 million of Gross cash flow and $814 million after working capital movements and ended with $748 million, with net cash inflows that swell the funds on hand to $3 billion.
Current assets ended the period at $11 billion, which was similar in 2022. Trade and other receivables amount to $3.6 million, with short term investments, cash and bank balances closing at $3.6 million, while inventories amount to $3.76 billion and receivables $3.6 billion. While receivables were close to the June 2022 and fiscal year end numbers, inventories fell by $700 million from the March year end balance. Current liabilities ended the period at $4.6 Billion. Net current assets ended the period at $6.5 billion up from $5 billion at the end of June 2022.

Lasco Distributors profit rises

At the end of June, shareholders’ equity amounts to $8.9 billion, up from $7.36 billion at the close of June 2022.
Earnings per share for the quarter was 13 cents, up from 9 cents in 2022. IC Insider.com computations project earnings of 65 cents per share for the fiscal year ending March 2024, with a PE of just 6 times current year’s earnings based on the price of $3.86 the stock traded at recently on the Jamaica Stock Exchange Junior Market. Net asset value ended the period at $2.53 with the stock selling at 1.5 times book value.
The company paid a dividend of 10 cents in July 2023, a payout ratio of roughly 26 percent of the 2023 annual profit.
Investors were underrating the stock earlier the year, selling it well below an appropriate valuation of a mere 8 times the nine months results of 27 cents per share when the stock traded at a low of $2.09 in April and close to that price for most of the month. Although the stock has nearly doubled, it is selling at just 10 times 2023 earnings and well below the 2024 earnings of 65 cents, which makes the stock a solid buy for the medium term investment.
Currently selling outnumbers buying interest but with rapidly improving results that will not last forever and patient investors will win in the end.

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

Jamaica Broilers aced 2023 profit

July 24, 2023 by

Jamaica Broilers (JBG) recently released full year results to April, with a big jump in earnings, from ongoing operations following the write off of $1 billion relating to the closure of the Haitian operations, with group revenues rising 23 percent from continuing operations and profit after tax rising a solid 56 percent to $5.4 billion from $3.44 billion in 2022.

Jamaica Broilers announced a new acquisition last week

Profit after tax rose a solid 39 percent to $4.3 billion from $3 billion in 2022 after factoring in the above one time write off of the Haitian operation.
Segment results. The group has two main operating segments split between Jamaica and The USA, with results showing revenues in the Jamaican operations jumping 30 percent to $59 billion from $45 billion and the USA climbing 11 percent from $29 billion to $32.5 billion. The Jamaican segment delivered profit of $7.57 billion, up a significant 56 percent from $4.8 billion in 2022, with the USA market delivering $3.8 billion, up a robust 55 percent, compared with $2.45 billion in 2022.
A sharp rebound in the local economy buoyed by a strong recovery in the tourism sector over last year would have contributed a significant part of the local rebound. However, reports are that the company’s main competitor, Caribbean Broilers, had challenges during the period that saw JBG filling the gap and therefore enjoying above average growth and, if correct, could revert to lower levels in the new fiscal year.
Earnings per share reported by the audited results came in at $4.43, after the write off of the Haitian operations, excluding the write off, earnings were a much more attractive $5.35 per share, with just over $7 projected by ICInsider.com for the current year, making it a compelling buy at current prices. The PE is an appealing 6.5 times last fiscal year’s earnings from ongoing operation and just 5 times this year’s earnings at the last traded price of $35 on the Jamaica Stock Exchange. The stock price has a premium of 66 percent over the Net asset value of $21.43 to Friday’s stock price, with the manufacturing sector at 100 percent, which suggest the extent of a potential rise.
Profit margin rose from 24 percent in 2022 to 26 percent in 2023, increasing gross profit by 30 percent to $23.4 billion from $18 billion in 2022.

Christopher Levy – Jamaica Broilers President and Chief Executive.

 Administrative and other expenses rose 9.6 percent, well below the gains in gross profit to $12.4 billion and distribution expenses increased by 17.3 percent to $2.67 billion. Finance cost jumped a sharp 70 percent to $1.85 billion from $1.1 billion. In comparison, finance income swung around by $670 million from $593 million that, mainly was debt forgiveness in 2022, to a loss of $177 million, representing loss on foreign exchange but other income comprising a potpourri of items, some of which may be nonrecurring, moved from $393 million in 2022 to $439 million. Taxation rose 35 percent from $1 billion to $1.37 billion.
The operations generated $9 billion in gross cash flow, up from $6 billion in 2022, that ended at $1.4 billion after working capital needs, compared with $2.2 billion in 2022, as inventories of finished goods and livestock consumed all of the funds generated. The group paid $783 million in dividends net of tax from $463 million in 2022, including $503 million or 42 cents per share paid in March this year and 36 cents or $432 million in November 2022. The payout amounts to 17.6 percent of reported profit, below the expected 20 percent the company indicated it would pay in the past.
The group incurred $8.3 billion in the acquisition of fixed assets well up on the $2.9 billion in 2022 and borrowed $11 billion net of repayment to fund the purchases. Current assets ended the period at $50.7 billion, up from $40 billion in 2022. Receivables amounted to $6 billion, inventories rose to $18.8 billion from $15.6 billion in 2022, farm animals were valued at $21 billion, up from $15 billion in 2022 and cash and bank balances stood at $4.8 billion, up from $3.9 billion. Current liabilities ended the year at $34 million compared with $27 billion the year before. Net current assets ended the period at $16.5 billion versus $13 billion in 2022.
At the end of April, shareholders’ equity amounts to $25.3 billion, with 2022 ending with $21 billion. Long term borrowings ended at $16 billion and short term at $17 billion, up from $10.3 billion and $13.6 billion, respectively, in 2022.
The stock gets an ICInsider.com BUYRATED seal of approval, but investors need to note a few things. Capital spend is impressive and bodes well for continued growth, however, the company is primarily involved in the agricultural business, that can be fickle and several factors could play a role in derailing its fortunes.

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

Upped capital spend for Caribbean Producers

June 21, 2023 by

Capital spend is set to expand at Caribbean Producers (CPJ) following approval of the Board, the company stated in a recent release with plans for “three major projects that will positively impact the growth and further development of the Company both locally and offshore” the release from the company stated.

Caribbean Producers

The plans include a U$1 million solar expansion project, with installation to commence in the first quarter of the 2024 financial year that starts in July, US$2.3 million modernization of the Meat Processing Plant, with work to commence in the first quarter of 2024, both projects will reduce operating cost. CPJ will be expanding its Operation in St. Lucia with a new store, with Operations to begin in the second quarter of the financial year 2024.
The proposed capital spend comes on the heels of a profitable nine months for the company recovering from fallout in revenues and profit during the covid-19 pandemic. For the three months to March, revenues rose 28 percent to US$35.7 million versus US$28 million in 2022 and climbed 24 percent to US$107 million for the year to March, over US$86.4 million for the similar period in 2022.
The March quarter saw cost of sales rising slightly faster than revenues, with an increase of 30 percent to US$25.3 million from $19.5 million, with a gross profit margin of 29 percent, down from 31.2 percent in 2022. For the nine months, it also rose faster than sales with an increase of 28 percent to US$75.3 million from US$58.8 million and resulted in a gross profit margin of 29.7 percent, down from 31.5 percent in 2022, negatively impacting profits.
According to  management, “We expect growth in revenue and margins going forward will translate to improved company performance.”

Caribbean Producers

Profit before tax declined sharply for the March quarter by 65 percent from US$$1.8 million to US$636,974 after accounting for a one-time charge of US$1.45 million in the third quarter relating to GCT assessment, dragging profit down to a mere US$226,000 after tax, attributable to the company’s shareholders of and down 49 percent to US$3.6 million for the nine months compared to US$6.8 million earned in 2022. For the nine months, profit before tax declined 34 percent to US$5.2 million in the current year, from US$7.9 million for the similar period in 2022, but it declined a smaller 16 percent, excluding the one-time charge for GCT. Selling and administrative expenses rose sharply by 24.7 percent in the March quarter from US$5.2 million in 2022 to $6.5 million in what management stated was due to increased staffing to position for further growth, the increase negated the improvement in the gross profit. For the nine months, the cost in this category increased 33.6 percent to US$19.6 million from US$14.7 million in 2022. That was the area of significant cost increase that depressed profits for 2023. But profit before tax would have increased to US$2.8 million when the charge for GCT is excluded compared with US$2.6 million in March 2022 quarter and US$9 million versus US$10 million.

At the end of March, shareholders’ equity stood at US$26.7 million, up from US$22.4 million at the end of March 2022 and US$23.2 million at the end of the June 2022 fiscal year. The company continues to be heavily leveraged with borrowings of US$40.5 million, of which US$9.8 million is short term and due to be repaid within twelve months.
Current assets stood at US$62 million at the end of March versus US$62.5 million at the end of June 2022 and just US$25.3 million as of March 2022. Cash and equivalents were US$4.9 million, up from US$3.9 million at the end of the 2022 fiscal year, with receivables at $18 million, virtually flat with the fiscal year end. Still, inventories slipped to US$39 million from US$40 million at the end of the fiscal year but are up over March 2022 at $30 million.
Current liabilities stood at US$25.4 million at the end of March versus US$46.75 million at the end of June 2022 and US$25.3 million as of March 2022.
CPJ is the dominant company within the hospitality sector. The expected continued expansion in the hotel rooms should be fertile ground for continued growth in revenues and profitability over the next few years. The company is highly leveraged, which is a huge negative, especially when business declined, as it did during the height of the COVID epidemic, curtailing sales in 2021 and 2022.
The company reported 0.02 US cents in earnings per share for the March quarter compared to 0.14 cents in 2022 and 0.33 US cents for the half year to March 2023 versus 0.62 cents in the prior year. As indicated above, ongoing earnings per share are better than the numbers suggest. The US$1.5 million written off for general consumption tax assessment is not an ongoing expense. As such, it should be excluded from earnings in valuing the company’s shares to assess ongoing earnings capabilities better. In addition, the tourism trade did not return to normal capacity compared to 2019 until the start of 2023, as such, the first two quarters of this fiscal year are based on lower business levels than is the norm and the 2024 fiscal year should reflect a better outcome as a result.
IC insider.com forecast earnings of J$1.35 per share for the June 2023 fiscal year and J$2.50 in the next fiscal year, with the stock currently at $9.46 on the Main Market of the Jamaica Stock Exchange with a value of 7 times the current years’ earnings. Investors can expect a period of continuing growth in the share price over the next 12 months as a result of continued improvement in profitability and lower interest rates in the coming months.

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

Profit climbs at Caribbean Assurance Brokers

June 14, 2023 by
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Caribbean Assurance Brokers (CAB) is not one of the more popular Junior Market stocks, coming to the market just when the Covid-19 pandemic broke out in Jamaica, and got little post-IPO bounce and has never won the support of the wider market. The company reported record full year and 2023 first quarter profits, yet the stock continues to struggle although currently trading up from the price before the release of both results.
Operating Revenues rose 11 percent from $423 million to $469 million for the year ending December 2022, while Other Operating Income generated $37 million which was down 7 percent from $40 million in 2021, resulting in total income rising 7 percent to $506 million from $463 million in 2021. Profit for the year rose 32 percent to $75 million from $57 million in the prior year, with earnings per share of 30 cents up from 21 cents in 2021.
Selling Expenses were virtually flat for the year at $146 million compared with $145 million in 2021, Administrative Costs rose 10 percent to $281 million from $255, depreciation charge fell 10 per cent to $16 million and finance costs fell 32 percent to $4 from $6 million in 2022.
For the 2023 March quarter, revenues climbed 12 percent to $101.9 million from $90.6 million for the 2022 March quarter. Other Operating Income fell from $14 million to $12 million resulting in total revenues of $114 million rising 9 percent above $105 in 2021.  The company earns the bulk of its income and profit in the September quarter. Profit jumped 840 percent to $17 million after tax from just $2 million in 2021, with earnings per share of 7 cents.
Selling Expenses fell by 30 percent to $25 million from $36 million in 2022, Administrative Cost rose 7 percent to $70 million from $66 million, depreciation charge rose 21 percent to $5 million from $4 million in 2021 and finance costs fell 45 percent to $593,176 from $1 million in 2021.

Caribbean Assurance Brokers selling at a PE of just 8 based on historical earnings & 5 times 2023.

Cash inflows from operations delivered $24 million, up from just $7 million in 2022, but cash funds climbed by $132 million by the end of March after spending $37 million on addition to fixed assets with a reduction in receivables and an increase in payables contributed $146 million in positive flows during the three months period.
At the end of March, shareholders’ equity stood at $480 million up from $390 million at the end of March 2022 and $463 million at the end of December 2022. The company continues to be lightly leveraged with borrowings of $59 million of which $53 million is short term and due to be repaid within twelve months.
Current assets stood at $536 million at the end of March versus $418 million in 2022. Cash and equivalent was $385 million up from $286 million at the end of March 2022, with receivables at $148 million, up from $127 million in 2022.
Current liabilities ended the 2023 quarter at $345 million at the end of March, up from $229 million at the end of March 2022.
ICInsider.com projects EPS of 50 cents for the current year, with the stock priced at $2.53 it last traded on the Junior Market and sits at the number 2 spot on ICInsider.com TOP10. The PE is a mere 5 times 2023 earnings and 8 times 2022 earnings and is one of the most undervalued stocks on the market currently.
The directors approved a modest dividend of 2.67 cents per share, well below the target stated in the prospectus of up to 25 percent of profits. The payment will be on October 26, with the ex-dividend date of September 14.

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

Is SOS the next stock Split?

June 13, 2023 by

Business has been great for Stationery and Office Supplies (SOS) over the past two years, with sales rising 55 percent over 2021 last year and 16 percent over the covid-19 affected 2020 in 2021 and is up 22 percent for the first quarter to March this year.

The surge in sales drove pretax profit excluding one-time income, up 34 over last year on top of a 151 surge in 2022 over 2021. While the company has started 2023 positively, reports are that its first shipment of goods to Cayman Island, which is expected to be an ongoing trade, has been sent off and that, in addition to its connection with Trinidad and Tobago that started in the latter part of 2022 and reports indicate that arrangement is in place for regular shipments to a third Caribbean country.
The stock had nearly two million units on offer up to June 5 at just under $16, but investors aggressively bought 1.5 million on that day and the stock has since seen limited supply on offer. The $20 price level is believed to be the trigger point for the directors to seriously consider recommending splitting the stock to shareholders. The stock price hit a 52 weeks’ high on Monday when it traded a small quantity at $21 and closed there again on Tuesday after 10,230 shares were traded. The stock price is up 22 percent this year and trades at a PE of 11 times 2023 earnings, but has more room to grow, with a PE of 15 putting the price within reach of $30.

SOS executives

More than 91 percent of the issued share are in the hands of the top 10 shareholders, thus reducing the potential supply that can come to the market with only 250 million shares issued. At the close of Tuesday’s trade, stocks on offer below $25 amount to 7,200 units, with 80,000 on offer at $25. After that, the bids start at $35.
Stock splits are popular among investors in Jamaica, with each announcement accompanied by a hike in the price of the relevant stock.
The door is left open for a resolution to be put to the company’s upcoming AGM for a stock split, as the annual report filed with the JSE stated that the date of the AGM was to be determined.

Filed Under: Company News, Company Results, General Business News Tagged With: , , ,

Q2 profit nearly doubles for Scotia

June 10, 2023 by

Scotia Group head quarters

A $2.5 billion jump in net interest income and a billion dollar increase in fees and foreign exchange gains pushed profit before tax at Scotiabank Jamaica to $6.1 billion from $3.4 billion for the April 2022 quarter and $4.2 billion after tax for April 2023 second quarter from $2.4 billion for the same period in 2022 that resulted in earnings per share of $1.35 up from 77 cents in the April 22 quarter and $2.45 for the half year with an indication that full year earnings will be in the order of $5.30 per share.
Net interest income came in at $9.4 billion for the current year’s quarter, up from $6.9 billion in 2022, while expected credit losses were flat at just over $665 million in the current quarter.
Net fees, foreign exchange trading, and other income were $3.9 billion for the 2023 quarter, up 30 percent from $3 billion in the previous year. For the year to date, net interest income came in at $18.5 billion versus $13.3 billion in the year before. Expected credit losses were flat at roughly $1.2 billion, while other income came in at $8.3 billion versus $7 billion in 2022. Expenses were well contained but increased by 14 percent to $6.6 billion in the April quarter from $5.8 billion in 2022, with the year to date rising just under 11 percent to $14.4 billion versus $13 billion in the prior year.
The group’s segments are having a mixed year, with half year numbers showing Treasury generating external revenues of $5.8 billion and profit of just over $1 billion compared with revenues of just over $3 billion in the previous year’s half year but profit before tax was flat at just over $1 billion in each. Retail banking saw a big jump in segment profits of $1.9 billion compared to $500 million in the 2022 half year, from revenues of $9.9 billion compared to $9 billion in 2022.

Audrey Tugwell Henry Scotia group’s CEO

Corporate and commercial activities generated $7.3 billion in revenues and profit of $5.6 billion compared with revenues of $5.1 billion in 2022 with profit before tax of $2.8 billion, while Investment banking had revenues of $1.6 billion and a profit before tax of $800 million compared to revenues of $1.5 billion in the 2022 half year and profit $650 million. Insurance services generated income of $2.5 billion in 2023 with profit before tax of $2.15 billion compared to revenues of $1.17 billion in 2022 and profits of $789 million.
Significantly, loans grew a solid 20 percent from $207 billion at the end of the April 22 quarter to $249 billion at the end of April this year, while customers’ deposits grew 10 percent from $400 billion to $440 billion.
Despite growth in earnings, Shareholders’ equity contracted from $113 billion as of April 2022 to $109 billion. A dividend of 35 cents per share was declared for payment in July.
The stock trades at $33.60 on the Main Market of the Jamaica Stock Exchange on Friday at a PE of just 7.
Going forward, Scotia is in a great position to benefit from the resurgence in the Jamaican economy with expectations of continuing growth to take place going forward as the government continues to reduce the debt to GDP ratio thus freeing significant resources to facilitate long term spending on infrastructure development within the country provide a significant leg for continued growth in the Jamaican economy.

Filed Under: Buy Rated, Company News, Company Results

Profit returns for Caribbean Cream

June 4, 2023 by

Following a torrid 2022 fiscal year, with a loss before taxation of $13.7 million, Caribbean Cream delivered a much better performance in the fiscal year to February this year, with pretax profit of $41.8 million and $27 million after accounting for $14.7 million for taxes, up from a $9 million loss in 2022 in a year that finance cost almost doubled to $66 million from $34 million in 2022, from increased borrowings.
Sale revenues for the just completed year rose 20 percent to $2.5 billion from $2.1 billion in 2022. In the final quarter, revenues climbed 22.5 percent to $674 million from $553 million in 2022 and increased 17 percent over the $576 million in the November 2022 quarter. In contrast, revenues for the 2022 February quarter were 10 percent more than the $501 million generated in the November 2021 quarter. All in all, the 2023 fiscal year performance was well ahead of the year to February 2022, even as the year started with just $1.3 million in profit with cost of sales at 73.2 percent with the second quarter being slightly better with cost of sales down to 70.7 percent and profit improving to $7.2 million as both volume improvement and price adjustment to the output chipped in to help improve the bottom line.
Kremi, as the company is known, has had a checkered history with Profit meandering from 2015 to 2023. (See Chart)
Since 2020 the company has faced increased input costs that squeezed profit margin. In the latest fiscal year, cost of sales dropped to 64 percent in the final quarter compared to 69 percent for the year and 71 percent for the nine months to November. The jump in revenues in the fourth quarter over the November quarter would have helped to improve the margin, but it appears that raw material costs fell compared with the earlier months of the fiscal year. In 2022 cost of sales was 71.6 percent and 66.6 percent in 2021.
Cost of sales rose 16 percent, slower than sales in 2023, to $1.73 billion from $1.49 billion in 2022, with gross profit rising faster than revenues, a positive development with an increase of 31 percent to $593 million from $775 million in 2022. The cost of raw materials used in sales rose 16 percent to $1.17 billion, compared with a 33 percent rise in fiscal year 2022 over 2021. Milk solids, one of the primary raw materials, about 70 percent that is used in producing ice cream moved from an average of US$3,355 per ton in 2018 to US$5,067 in 2022 and is now $4,676 in 2023, down 9 percent. In 2022 the cost rose by 29 percent, these movements, coupled with exchange rate changes for the Jamaican dollar, would have pushed up the company’s production cost; also affecting cost would be a 7 percent movement in the exchange rate between the Jamaica dollar and the US dollar. If continued, falling commodity prices in 2023 will lower the cost for them and help improve profits. Also of note is that the price of crude oil is now 38 percent less than it was in 2023 at the start of June and that feeds directly into utility cost incurred in production, which was $166 million, 16 percent higher than 2022 and 19 percent more in Administration with $99 million versus $83 million in 2022.
Administrative expenses rose 17 percent to $598 million from $512 the previous year. Marketing and sales expenses increased by 18 percent to $72 million from $61 million in 2022 and depreciation came in at $100 million, marginally down from $102 million in 2022. Some $930 million is tied up in construction in progress at the end of the fiscal year and will result in the charge rising appreciably in the 2024 fiscal year when those assets are transferred to fixed assets but will reduce the actual taxation payable as capital allowances in the first year, will reduce the actual tax liability that will be payable. Finance cost jumped 91 percent to $66 million from $34.5 million in 2022, but a significant portion of the loans have interest rates capped and will not result in increases in the current period.
Gross cash flow generated $195 million from operating activities, up from just $53 million in 2022. Funds internally generated were augmented by loan inflows of $353 million and funds at the start of the year amounting to $145 million, which helped to fund additions to fixed assets of $541 million.
The total Current assets ended the year at $535 million inclusive of trade and other receivables of $157 million, cash and bank balances of $67 million, down from $146 million in 2022. Current liabilities ended at $389 million, up from $313 million and net current assets ended the period at $167 million, down from $212 million in 2022.
At the end of December, shareholders’ equity stood at $826 million, with long term borrowings at $920 million, up from $603 million in 2022 and short term at $107 million against $67 million in 2022. The increased borrowing helped to fund additions to fixed assets amounting to $542 million during the year, of which $490 million is construction in progress.
Earnings per share came out at just 7 cents for the year, with a steep PE of 45.7, but earnings for the current year are expected to jump well over that for 2023. IC Insider.com forecasts a considerable increase of 90 cents per share for the fiscal year ending February 2024, with a PE of 3.6 times the current year’s earnings based on the price of $3.20 the stock traded at on the Jamaica Stock Exchange Junior Market and a net asset of $2.18.
The company did not pay a dividend in 2022 but 6.94 cents in 2021.
The company may have faltered over the last two years, but it has shown in the past that it can recover. Additionally, it is not going away anytime soon. It will recover lost ground as they invest in its manufacturing operations to generate cost reductions, greater efficiency, and improved profit. The first quarter results due by July should show the first signs of this robustness as the company reports a significant profit improvement over the 2022 first quarter and a better than the 2023 February quarter.
What should investors do? Investors should buy the stock that is selling well below potential as investors reacted negatively to poor results reported in 2022 before the release of the 2023 results.

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

Lasco Financial EPS hides profit plunge

May 31, 2023 by

Net profit declined by 30 percent to $214 million for the fiscal year to March 2023 from $306 million in 2022 for Lasco Financial Services. Still, the earnings per share barely fell, according to the recently released audited report. The earning per share is actually 16.7 cents rather than the 23.94 cents reported in the audited Financial Statement, compared with 24.05 cents in 2022.
The company did not have a good year, with revenues falling from $2.5 billion in 2022 to $2.27 billion even as loan income grew during the latest year. Revenues in the fourth dropped sharply to only $410 million versus $662 million in the 2022 fourth quarter. Fourth quarter profit came in slightly below the December quarter’s $31 million at $27 million on far lower revenues than the $572 million in the December quarter.
Loans payable include two with ten year tenure amounting to $1.095 billion due to JMMB with interest rates at 8.25 and 8.75 percent per annum and 2 percent per annum loans amounting to $143 million from the Development Bank of Jamaica for on lending.
Loans advanced to borrowers ended at $1.039 billion for the fiscal year, up from $1.013 before provisions, and after provisions, loans are up nearly 11 percent to $900 million from $813 million in 2022. Quality improved in 2023, with amounts set aside for impairment dropping to $138 million, or 1.3 percent of the loan portfolio, from $201 million or 2 percent in 2022, as $60 million was recovered from impaired loans during the 2023 fiscal year. Loans that are current have a provision of $24 million compared with $13 million in 2022.

Jacinth Hall-Tracey, Managing Director of Lasco Financial.

Administrative and other expenses rose 6.8 percent to $1.18 billion from $1,105 billion in 2022, but Selling and promotion expenses fell 13 percent to $647 million from $745 million, partially as Commission and fees fell seven percent from $653 million to $609 million. Overall, non-financial expenses declined from $1.85 billion to $1.83 billion. However, staff cost jumped 18 percent to $654 million, with staffing at the end of the year jumping 23 percent to 201 employees from 164 in 2022. Finance costs fell to $117 million from $167 million in 2022 and Taxation fell from $187 million to $115 million.
At the close of the financial year, cash and short term deposits amount to $1.7 billion, giving it much dry powder to increase lending if viable opportunities arise. Shareholders’ equity increased to $2.11 billion at the end of March from $1.96 billion in 2022.
The company is a work in progress as it attempts to recover from losses suffered in its loan portfolio from 2020 to 2022, this is an area of above average potential growth, but there have been few signs that the company will be more aggressive in this potentially lucrative segment of the financial market.
The stock is listed on the Junior Market of the Jamaica Stocks Exchange and last traded at $2.35 with a PE ratio of 14 times 2023 earnings. Investors need to watch this one for possible recovery.

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

Agostini’s buys Jamaica’s Health Brands

May 14, 2023 by

The Trinidad and Tobago Stock Exchange listed Agostini’s Limited signed an Agreement to acquire all the shares of Health Brands Limited, a Jamaican pharmaceutical and personal care distribution company owned by Athol Smith.
The transaction has received regulatory approval and the due diligence process is nearing completion the company stated its release to the Trinidad and Tobago Stock Exchange. It is expected that this transaction will be finalized by the end of June 2023, and we will make a further announcement at that time.
Reports are that the owner approach some Jamaican companies in the sector but apparently, no one was willing to pay the price the seller was looking for. Smith had previously sold his Consumer Brands business to GraceKennedy in 2017, at the time, sales at the company were said to be generating sales of more than $2 billion reports are that the Health Brands revenues could be in the above region as well.
Agostini’s has a market capitalization of TT$4.4 billion with a stock price of $64.04. The company reported revenues of $1.13 billion for the March quarter 16 percent up from $971 million in 2022 with the half year coming in with an increase of 14 percent to $2.4 billion compared to $2.1 billion in the previous year. Quarterly profit attributable to shareholders jumped 43 percent to $63 million over $44 million in 2022 and the half year was up 97 percent to $209 million above the $106 million in 2022.
The company has been in an acquisition mode, acquiring 80% of the outstanding shares of Chinook Trading Canada Limited, a Canadian base consumer products business with trading operations primarily in Caribbean Region. The company states that these acquisitions are consistent with the group’s strategic objective of expansion in more business segments and greater geographical diversification.
Last year December, they acquired Collins and Carlyle business and disposed of Agostini’s Interior contractors division which the group considers is no longer strategically compatible with the group objectives.
For the half year earnings per share was $3.03 up from $1.53 in 2022 with the March quarter delivering EPS of 92 cents compared to 65 cents in 2022 and $2.91 for the 2022 fiscal year.
Shareholders’ equity closed out the half year at $1.55 billion. The stock traded on the TTSE at $64.25 on Friday, up 28 percent for the year.

Filed Under: Company News, Company Results, General Business News

Wisynco profit surge

May 10, 2023 by

Wisynco Group reported another solid quarter of profit to March 2023, from a 23.4 percent growth in revenues to $12 billion for the quarter over the $9.7 billion achieved in the 2022 third quarter and contributed to a 26.8 percent rise in nine months revenues to $36 billion up from $28.4 billion in 2022 with profit after tax of $3.66 billion 23.77 percent higher than $2.96 billion in 2022.

Wisynco headquarters

The group achieved a Gross Profit of $4.1 billion in the current quarter, the same as the preceding quarter and represents a 32.2 percent increase over the $3.1 billion of the prior year and was helped by an improvement in Gross Profit Margin of 34.6 percent which, up from 32.3 percent for the same quarter last year.
Profit before Taxation for the quarter was $1.57 billion, an increase of 43 percent over the $1.1 billion in the comparative quarter in 2022.
After the provision of $416 million for corporate taxes, Net Profits Attributable to Stockholders amounted to $1.2 billion, or 31 cents per stock unit for the quarter, 38.6 percent greater than the $831 million or 22 cents per stock unit earned for the prior year and 98 cents for the nine months up from 79 cents in 2022.
The company ended the period with cash and investments of $11.4 billion, placing it in a great position to fund the planned major factory expansion into 2024.

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