NCB ups dividend as profit climbs

April 25, 2014 by

National Commercial Bank approved an increased dividend payment of 35 cents per share payable on May 22, 2014 for stockholders on record as at May 9, 2014.  For the same March quarter last year, the bank cut the dividend paid on May 24 to 16 cents per share, down from 23 cents they paid in March 2012. A dividend of 32 cents per ordinary stock was paid on February 20 this year.

NCB also released the second quarter results to March and as expected the results showed strong improvement over the 2013 quarter with a net profit of $2.99 billion, up from the NDX affected $1.74 billion in 2013. The latest quarterly figures exceeds the amount reported in the December quarter when they made $2.86 billion, which was boosted by a $300 million gain from acquisition of a subsidiary. Without that one off non-operating income, profit would have grown by 17 percent over the December 2013.

NCB_TheAtrium280x150Huge progress has been made in recovering from the negative impact that the NDX debt swap had on net interest income last year as $5.89 billion to $6.11 billion. For the six months to March, the bank generated net profit $5.85 billion, up from $4.53 billion last year resulting in earnings per share of $2.38 for the current year to date. In achieving these results, NCB was able to put a hold on expenses in the March quarter compared with the December quarter. The latest figures of $6.97 billion are slightly higher by just $74 million than the March 2013 quarter. For the year to March, expenses are up by $1.73 billion to $14.3 billion.

The bank is to be on target to clock around $5 per share earnings for the current fiscal year that ends in September.

The bank grew loans from $141.1 billion to just over $150.5 billion and made provision for bad loans of $492 million versus $390 million in December and $494 million in the 2013 March quarter. For the 2014 six months period, bad loan provisioning amounted to $882 million, a decline from $1.07 billion.

Related posts | 39% hike for NCB dividend | NCB ill-fated IPO cost $680m | NDX slaps NCB profits

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

Paramount grows profit 68%

April 24, 2014 by

Paramount Trading Company enjoyed strong gains in 2013 as profit before tax jumped an attractive 68 percent from revenues that are up 10 percent year over year but it was partly aided by an increase in other income growing by 87 percent to $7.6 million.

As of November 2013, gross profit margin increased to 46 percent from 43 percent for the same period in 2012. This improvement contributed $10 million to profit and is aided by slower growth in cost of sales of $227.8 million that increased by 8 percent at slower pace than revenue, while administration cost moved up by only 6 percent. The various areas of improvement, profit margin and cost containment enabled the company to make a profit of $35.2 million for the six month period, up from just $21 million in 2012, while sales grew to $339.5 million from $300.8 million. There was no major reduction in finance cost which came in at $10.6 million compared to $11.2 million in 2012 even as borrowings declined by just over $20 million. Movement in foreign exchange would have been a factor in pushing the cost in this area.

berger_construction-paintingFor the November quarter, revenues grew by 9.2 percent but profit before tax increased by 85 percent as gross margin climbed to an attractive 50 percent up from 43 percent in 2012, while administrative cost fell from $31 million to $28 million and finance cost slipped slightly to $4.8 from $5.1 million resulting in profit before tax of $19 million versus $10.3 million in the 2012 quarter.

During the November quarter, the company indicated that it expanded the food chemical product range and this should add to revenues and profit going forward.

The company seems set to earn $90 million in profit or around 60 cents per share and should go on to earn around 80-85 cents per share for 2015. Based on this projection, the stock is priced at 5 times 2013 earnings, well below the 8 times that many junior market stocks are priced at currently, leaving room for a good potential gain in the months ahead.

Balance Sheet | Receivables climbed to $130 million at the end of the quarter from $89 million at the end of November 2012 but is down from $146 million at the end of May (the company’s financial year end) but inventories climbed to $229 million from $172 million at both November 2012 and May 2013.

Payables, on the other hand, was up from $75 million at the end of November 2012 to $107 million in November 2013 but it is slightly better than the $110 million owing at the end of May 2013. These changes result in cash falling from $60 million at the end of the fiscal year to $37 million. The increased inventory is expected to fill increased demand for the goods during the high demand third quarter. At the end of the November, shareholders’ equity stood at $278 million or $1.88 per share after setting aside $21 million for a dividend payment.

Related posts | Paramount misses Buy Rated crown | Higher cost flattens Paramount’s profit

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

Purity’s best year but poor Q4

March 24, 2014 by

Consolidated Bakery, better known as Purity, recorded a major improvement in profits from their ill-fated 2012 results. Buoyed by a 41 percent sales increase, the company ended the year with profits of $33 million or just 15 cents per share. Unfortunately for the initial IPO investors, the results although sharply improved, is yet to reach a level that would see the stock reaching its public issue price in the short term.

Results showed impressive quarterly growth, with the first quarter rising 172 percent, followed by 212 percent in the second quarter, 328 percent in the third quarter and 231 percent in the final quarter. Although sales climbed the fastest in last quarter by 52 percent, it resulted in only $2.7 million in profit. Revenues in the first two quarters averaged 32 percent and the third quarter climbed by 51 percent. Growth in revenues is helped by a number of new products the company launched in the past two years.

Gross profit | Gross profit margin improved in the year to reached 54 percent from 52.7 percent in 2012, still lagging gross profit of 62 percent in 2011.

Consolidated_Purity150x150Cost rose sharply in the year with administrative expenses climbing 23.5 percent to reach $123 million, an increase of $23 million and selling and distribution moving up by $23 million or 43 percent, a bit faster than the increase in revenues.

The company has work to do to improve what is a paltry return on equity of 7 percent even as the results exclude the payment of corporate taxes. The stock price to net asset value is only 50 percent and with the PE ratio is at 7 times last year’s earnings, which is at the upper end of valuation for junior market companies. Investors should not see much improvement here until new and improved results starts coming.

Borrowed funds that were at $40 million at the end of 2012 is up to $71 million but is at a very comfortable level with equity at $504 million. Cash funds available amount to $110 million at the end of 2013.

Watch this one | The company has room to grow faster than the economy for a while and this could make it a good growth prospects for investors looking long term. IC Insider’s forecast is 27 cents per share for 2014, suggesting that the price should be moving up from the current $1.10 level during the course of the year.

Tightness in the local economy, to which the company’s fortunes are predominantly tied, can negatively affect sales and cash flow. They seem to have navigated a tough 2013 unscathed and should be able to do well in 2014, which ought not be as challenging as last year. However, the pressures of last year could well weaken many of the company’s customers with the evidence showing up later. So far, that don’t seem to be the case and the next set of results due by mid-May will point to where the wind is blowing.

Related posts | Big profit jump at Purity | Consolidated Bakeries hiked profit

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

Grace doing better than bottom-line

March 10, 2014 by

2013 was a remarkable year for Grace Kennedy despite reporting lower profit after tax compared to 2012. Remarkable indeed, as the 2013 net results speaks volumes about the Group’s profit potential going forward.

The Group’s profit after tax was $3.22 billion, which was slightly lower than the 2012’s $3.48 billion. The results for 2013 suffered from some restructuring cost in the insurance segment, losses picked up from the government debt exchange program and increased taxation due to a number of factors. By comparison, the 2012 prior year enjoyed a much lower tax cost from the lowering of the Jamaican tax rate to 25 percent and utilization of previous year’s tax losses. In 2013, the changes in taxation dragged down a 24 percent increase in profit before tax of $5.08 billion compared to $4.1 billion in 2012, resulting in earnings per share coming out at $9.65 versus $10.41 in 2012. On the upside, in 2013, the Group benefited from a sharp increase in gains in foreign currencies trading and holdings and from changes in pension liabilities at Hardware & Lumber.

Pretax profit was up 32 percent in the final quarter of the year, well off from the 53 percent growth in the second quarter, but well above the 14 percent in the first quarter and the flat profits in the third quarter.

Graph&MagnifyingGlass650x250Total revenues gained 11 percent for the year to $69.53 billion. The December quarter grew by 14 percent compared to 4 percent in the first quarter of the year and 11 percent in quarters two and three. Other income grew sharply by 65 percent to $1.7 billion helped by a big jump in foreign exchange gains. Expenses, on the other hand, grew by 9.85 percent to reach $63.9 billion.

Segment performance | Revenue changes varied from segment to segment with money services gaining 14.4 percent to $5.54 billion, food trading 11 percent to hit $44.6 billion, retail and trading 8.3 percent to $6.8 billion, banking only 3.6 percent to reach $5.54 billion and 2.2 percent for insurance to $4.76 billion. Segment profit saw food trading increasing 23 percent to $1.3 billion, banking was flat at $676 million, insurance fell to $109 million from $384 million but money transfer services grew by 20.6 percent to $1.88 billion and retail and trading 98 percent.

The insurance, banking and money services segments launched new products. There was some fallout in the division however, due to the debt exchange, structural changes and a claims review in the insurance segment. These negatively impacted the profitability of the segments.

Regional performance | Jamaica accounts for 64 percent of revenues with a moderate increase in 2013 of 6 percent to $43 billion. The UK enjoyed a 17 percent increase, USA 13 percent, Canada 20 percent, other European countries 57 percent and Africa 91 percent. Changes in currency rates would have played a big role in the growth in the overseas markets.

Grace should go on to earn between $12 to 13 per share in 2014 making the stock extremely cheap.

Grace Kennedy is an IC Insider Buy Rated stock.

Related posts | Grace’s profit up 41% in June quarter | Grace looking up

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

H&L turnaround looks complete

March 3, 2014 by

Hardware & Lumber‘s profit after tax to the end of 2013 jumped to $610 million from only $2.8 million in 2012, but without a one-off reversal of pension obligations of $502.5 million, profit would be in the order of $260 million after tax. Earning were equivalent to $2.76 per stock unit for the year, beating our earnings estimate of $2.

The result for 2013 represents a major turnaround in the fortune of the company that has been struggling with major losses in 2008 and 2009, high debt load and minuscule profits from 2010 to 2012.

Profit before tax was $818 million including the pension adjustment compared with the previous year’s $125 million. The one-off reduction is a non-cash adjustment arising from the company’s decision to move from the Grace Kennedy defined benefit pension plan in 2013 to the Grace Kennedy defined contribution pension plan. Return on equity leapt to 28 percent during the year from ongoing earnings.

Total revenue for 2013 was $6.8 billion, representing an 8.4 percent increase over 2012 but the last quarter of the year revenues climbed by 13 percent bettering the previous three quarters. The retail, hardware and household segment (trading as Rapid True Value) grew by 8.2 percent while the agricultural segment (which trades as Agro Grace) recorded revenue growth of 9 percent. Gross profit for the year was $1.746 billion, representing 25.6 percent of revenue as it slipped slightly from 25.9 percent achieved in 2012. Gross profit margin is back up to 36 percent for the last three years from a low in 2008 of only 27 percent.

HardwareLumber_Bldg150x150At the end of the year, cash funds stood at $418 million compared to $206 million in 2012 even as borrowed funds were reduced by $85 million. The balance sheet reflects stockholders’ equity of $1.176 billion and debt, which was at $1.265 billion in 2008 is now down to $370 million, and should decline further in 2014 as profits increase.

Current assets are now twice that of liabilities with working capital of $1 billion. Hardware & Lumber is majority-owned and controlled by Grace Kennedy. Andrea D. Coy, who headed the operations since April 2012, has gone back to Grace Kennedy. Being an accountant by training, her task may well have been to cut cost and now that is in place, the need for a marketing-oriented person may be the area of focus now.

Hardware & Lumber is an IC Insider Buy Rated stock. We project earnings of $3.76 for 2014, rising to $4.50 in 2015 with a tax rate of 25 percent. For investors, this is a strong buy signal as the stock is expected to record price gains in the weeks and months ahead.

Related posts | Buy Rated: H&L up 74% | H&L – big profits boost

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

Profits down at Scotia

March 3, 2014 by

Scotia Group and its subsidiary Scotia Investments reported lower profits for the first quarter ended January this year.

Scotia Group reported net income of $2.54 billion for the first quarter ended January 31, which is $168 million above the previous quarter ended October last year and $104 million below the quarter ended January 31, 2013. Earnings per share (EPS) for the quarter was $0.79 compared to $0.82 for the same period last year.

The Directors maintained the dividend at 40 cents per stock unit payable on April 10.

Total operating income, comprising net interest income after impairment losses and including other revenue, was $8.3 billion, a decrease of $28 million relative to the prior year.

Net interest income after impairment losses for the period was $5.7 billion, down $134 million or 2.30 percent when compared to the same period last year. However, the loan loss expense increased by $234 million to $517 million compared with $284 million with prior year.

scotiabankBuilding150x150As reported by management, “Other revenue for the quarter was $2.56 billion, up $106 million or 4.3 percent when compared with prior year. This was due primarily to increased insurance revenue of $54 million, higher gains on our foreign currency trading and investment book of $36 million and net fee and commission income of $11 million. The increase in the net fee and commission income was due to growth in our mutual funds and unit trust business.”

Operating Expenses were $4.87 billion for the quarter, representing an increase of $237 million or 5.12 percent over prior year. This is due primarily to higher staff related costs of $139 million and operating expenses of $117 million.

Scotia loan portfolio fell in the latest quarter to reached $133.4 billion from $134.8 billion in October last year but is still well ahead of the $122.3 billion at the end of January 2013.

Scotia Investments reported net income for the quarter of $421 million, $66 million or 13 percent below the quarter ended January 31, 2013 and $152 million or 26 percent below the October 31, 2013. Operating Income, comprising net interest revenue and other income of $989 million for the quarter was $119 million or 11 percent below the $1.108 billion for the same period last year; and $230 million or 19 percent below last quarter. Non-interest income, which includes fee income, securities trading gains and net foreign exchange trading income, was $352 million for the quarter, $7 million above the same period last year; and $138 million or 28 percent below last quarter. Net interest income fell to $636 million from 745 million in similar period in 2013 as interest margins contract. Wages grew but other operating expenses fell leaving overall expense in line with that of 2013.

The Board maintained dividend at 45 cents per stock unit, payable on April 10, 2014.

Related posts | Scotia reports record profit | Profit jumps 39% for Scotia Invest

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

Mayberry profit crushed

March 3, 2014 by

Profit fell sharply at Mayberry Investments for the year ending December 2013, falling to $102 million as it declined sharply from $439 million reported in 2012. Earnings per share came out at only 9 cents as profit took a big hit of $337.5 million from the transaction in connection with the Government  National Debt Exchange Programme (NDX) in February last year. Without the NDX charge, earnings per share would have been around 22 cents in 2013.

Mayberry recorded a decline of $238 million in total revenues driven by declines of $112 million in net interest income, $111.4 million in fees and commissions and $42 million in dividend income and $129 million in net unrealized losses on trading portfolio. There were gains on disposal of a small portion of the associated shareholding of $60 million as well as increase in net foreign exchange gains $105 million.

Total expense for the year was 10 percent lower than for 2012 coming in at $681 million for 2013 and flowed from reduction in staff cost of $32 million and reduced provisions of $91 million as the company recovered some loans.

Mayberry_banner600X250Mayberry operating profit fell to $213 million from $374 million in 2012 before the NDX charge due mainly to lower net interest income and losses on investment valuation.

In the final quarter, Mayberry reported only $3 million pretax profit compared with $162 million in 2012 and after booking a tax credit, ended up at $42 million in the last quarter, still lower than the $176 million reported in 2012. In the last quarter, the company suffered from lower net interest income and reversal of credit loss gains achieved in the prior period.

Assets grew by $1.2 billion during the year to $22 billion partly funded by increased liabilities.

Related posts | Mayberry profit bleeds from NDX | Mayberry’s tough year so far

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

Eppley profit jumps

February 19, 2014 by

Eppley is an interesting play with limited income and limited cost in the short term but profit could explode to the upside in 2014 as increased funds under management are put to work.

The company reported a big jump in profits of $34 million or $61.04 per share earnings (EPS) for 2013. In 2012, profit was just $15 million and EPS of $50.21. In the December 2013 quarter, EPS came out at $13.88 as profit amounted to $11 million as no tax was charged due to the exemption for Junior Market companies.

The full year earnings came from income of $65.3 million. Operating expenses were $34 million and interest expense $16.5 million. Eppley generated $24 million in Other Income. Net interest income for the full year was roughly the same as in 2012 at $48.7 million, 2012 $50 million. Income should grow in 2014 as the proceeds of the preference shares issued at the end of 2013 which brought in $387 million at 9.5 percent per annum starts to generate income.

eppleytype150x150At the end of 2012, there was $463 million total assets under management but that has grown to $814 million, almost doubling the amount. Except for a very small amount, the remainder of the assets are all potentially income generating. At the end of December, only about $160 million of the assets was not placed to maximize returns and that should be corrected in 2014.

Stock outlook | The company stated that it had a $757 million portfolio with an average yield of 15 percent at year end; $474 million of these funds are borrowed but at lower cost than the rate being generated by the portfolio. Earnings for 2014 should be in the region of $60 million or $107 per share after paying preference dividends. If this materializes, the stock could move strongly upwards if enough trading takes place. Eppley announced a $9 per share dividend payable on February 28, 2014. The stock, which trades infrequently, last traded at $380.

Related posts | Eppley preference shares over | Profit up 92% for Eppley | IPO: What or who is Eppley?

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

Carreras is back

February 19, 2014 by

Profits at Carreras is back on track dollar wise, as revenues hit $3.66 billion in the 2013 December quarter versus $3.745 billion in 2012.

Gross profit is above the 2012 period of $1.69 billion at $1.75 billion in 2013. Selling and administrative expenses declined in the latest quarter, which would have pushed the 2013 results above 2012. Carreras booked interest due on the debt owed by the tax department of $1.8 billion as other income, resulting in profits growing to $2.18 billion after tax, versus $1.17 billion in the prior year. Gross profit is down for the nine months to $3.98 billion from $4.34 billion in 2012. Profit after tax for the year-to-date is $3.1 billion versus $5.1 billion, with both periods having swollen figures due to exceptional income.

CarrerasTobaccoFree280x150Volumes are still down, but not as badly as in the June quarter, when sales were negatively affected by the hike in cigarette prices in March 2013 and the stock piling of inventories by the trade ahead of the price hike, a practise that goes back for several years. The December quarter’s performance is in stark contrast to the June quarter when revenues plummeted from $3.1 billion in June 2012 quarter to just $2.16 billion, a sharp 30 percent drop, but profit after tax fared even worse, dipping by 40 percent.

Expenses rise | Administrative, sales & marketing expenses fell in the latest quarter to $600 million from $710 million in 2012 but is marginally up to $1.655 billion for the nine months compared to $1.58 billion for the same period as of December 2012.

Tax Recovered | The tax now recoverable is down to $980 million from $1.733 billion at the end of March and is expected to be fully recovered over the next 12 months and will most likely be distributed as dividends to shareholders.

Carreras ended up with cash funds of $3.8 billion at the end of December, equity is at $4.7 billion or $9.60 per share.

Earnings appears to be back on track to deliver around $6 per share annualised, which would result in some increase in the quarterly dividend that was cut from $1.50 to $1 last year in light of the drop in profit. Carreras declared $1.62 as the latest dividend to be paid March after paying a special capital cash distribution of $1.18 on January 30, 2014.

Carreras is an IC Insider Buy Rated Stock.

Related posts | D&G, Carreras & C&WJ now Buy Rated | Carreras pays out liquidation money | Carreras takes a big hit but tax recovery starts | Carreras grew income

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

Caribbean Producers results pushes stock

February 14, 2014 by

Investors were evidently impressed with the results of Caribbean Producers Jamaica (CPJ) for the half year to December 2013 and pushed the stock price up to $3 on Thursday, February 13th, the first trading day after the release.

The company released second quarter results to December showing profits up by 202 percent to US$1.624 million for the six months and 65 percent for the December quarter to US$1.18 million from US$711,712 in 2012. Earnings per share for the six months amounted to US$0.148 cents.

Sales revenues rose by 24 percent for the December quarter and 22 percent year to December hitting US$37.5 million for the 6 months and US$20.46 for the quarter. Gross profit margins came out at 41 percent for the quarter and 42.4 percent year to December. In the prior year, the margins were 42 percent for the quarter and 39.8 percent for the six months period.

CaribbeanProducers(CPJ)280X150Expenses up | Selling and administrative expenses are up 16.4 percent in the December quarter and 18.2 percent for the six months, while finance cost rose by 19 percent in the latest quarter and 14.4 percent for the year to December. Depreciation charge also rose sharply due mainly to their expansion into meat and juice processing.

CPJ’s performance for the next quarter should push profits up quite sharply as historically the March quarter generates the highest amount of sales and profit during the peak winter tourist season. IC Insider has forecast earnings for the full year at 70 cents Jamaican and J$1.35 for 2015 fiscal year.

Finances | The company is still not comfortably funded with borrowed funds of US$25 million at an elevated level and in excess of equity of just US$14.7 million. Short term loans are at $11 million, well in excess of the annual cash flow of approximately US$9 million.

Caribbean Producers is an IC Insider Buy Rated stock.

Related posts | D&G, Carreras & C&WJ now Buy Rated | Caribbean Producers’ impressive profit | CPJ’s new St Lucia venture

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