Company Results — Page 89

First Citizens’ $1B IPO opens today

July 15, 2013 by IC Insider.com

The government of Trinidad & Tobago, through the holding company for First Citizens Bank Group, launches a billion dollar Initial Public Offering (IPO) of shares to reduce its ownership in the bank. The issue opens today, Monday 15th July, and when completed will be listed on the T&T Stock Exchange. The offer of 48,495,665 shares, approximately 19.3 percent of the total shareholding of the bank, is expected to rake in $1.1 billion before expenses for the Government of Trinidad. The issue has an offer price of TT$22 per share for sale to the public. The proceeds will go to the holding company for Citizens and is expected to be paid over to the government.

Citizens, a banking and finance company, has total capital of $6 billion and total assets of more than $37 billion. When compared to the two other banks listed on the Trinidad Stock Exchange, Republic has capital of $7.94 billion and total assets of $55 billion while Scotia Bank has capital of $3.2 billion and total assets of $18 billion as of March this year.

First Citizens Brokerage & Advisory Services (a subsidiary of First Citizens Investment Services) is the Lead Broker for the Offer for Sale.

THE COMPANY | The First Citizens Group is a financial service organization headquartered in Trinidad & Tobago that offers a range of retail, corporate, capital markets, investment management, wealth management, asset management, trustee and brokerage services. The provision of corporate, commercial and retail loans, deposit and other retail services, including credit card accounts, internet, and telephone banking is conducted in Trinidad & Tobago via a network of 26 full service banking locations, one foreign exchange bureau, seven operations centres and 96 ATM machines. In Barbados, these services are provided via five branches, one lending centre and eight ATM locations. In Costa Rica, the provision of corporate loans is done via a centralised corporate banking team that covers both Costa Rica and the Central American region.

COMPANY HISTORY | First Citizens Bank was formed in March 1993 and acquired, The Trinidad Co-operative Bank, Worker’s Bank and National Commercial Bank. At that time, 62 percent of its loan portfolio was in arrears. In the 10 years to 2003, First Citizens Bank grew its profits to TTD233 million, doubled its asset base to TTD6.1 billion and had attained international credit ratings of BBB- and A-3 by S&P and Moody’s, respectively.

In 2009, First Citizens acquired Caribbean Money Market Brokers Limited, now First Citizens Investment Services Limited, a full service securities company with offices in Trinidad & Tobago, Barbados, St. Vincent and St. Lucia. In January 2012, a representative banking office was opened in Costa Rica as the Bank’s first entrance into Central America and in August 2012, the Group continued its expansion with the acquisition of Butterfield Bank in Barbados, now called First Citizens Bank (Barbados) Limited.

BALANCE SHEET & PROFITS | At the end of March this year, the bank loaned out $13. 8 billion, an increase over the March 2012 of $11.2 billion. Customer deposits climbed faster to $26.7 billion versus $22.9 billion. Profit before tax grew to $388.7 million, $40 million or 11.5 percent over the $348.7 million earned for the corresponding period last year. Profit after tax amounted to $306.4 million. For the 2012 fiscal year, the bank earned profits of $446 million giving a return on equity of 8 percent and return on assets of 1.58 percent. Return on equity is around 11 percent for 2013.

Citizens is underperforming its two major competitors in a number of areas. Importantly, two critical measures tell the tale as to where the bank sits with its peers. Scotia Bank’s return on equity is 18 percent and return on assets 3 percent while Republic Bank is 14.6 percent return on equity and 2.25 percent return on assets. Republic sells at a PE of 15 and Scotia Bank at 22.5 times 2013 earnings and Ansa Merchant Bank has a PE of 19. The lower numbers of PE for Citizens suggest there is much room for the stock price to climb after the shares list with their PE at only 11.

The performance of the loan portfolio is a matter of concern. Data shows that there is not much impairment in the loan portfolio. However, it is noted that the level of loans that are past due increased markedly in 2012 over 2011 from $1.96 billion to $2.99 billion. “Corporate past due amounts” increased by $800 million, an indication that things may not be a sanguine as the profit figures are suggesting even as the provision for loans losses in the March six months period was much less than what was provided for in the comparable half-year results in 2012.

DIVIDEND POLICY | The dividend policy of the Issuer will be to distribute funds surplus to the operating capital and strategic requirements of the Group, as determined by the Directors, with an annual target dividend pay-out percentage range between 45 to 55 percent of net profit after tax.

Filed Under: Company News, Company Results, Initial Public Offers, Stock Market, TTSE Market Tagged With: First Citizens, Trading Activity, TTSE

AMG is investing for tomorrow

July 12, 2013 by IC Insider.com

AMG Packaging invested $108 million since last August in fixed assets including land, building and equipment. The additions moved fixed assets to $230 million, a major increase for a relatively small company. The company took on debt to help fund the expansion as well as providing working capital financing, while both inventories and trade receivables rose and was partially offset by a rise in payables.

At the end of April, loans stood at $91 million up from $30 million in May 2012 as borrowing added $70 million to debt with repayment of principal over 7 years at 9.25 percent interest for 5 years and variable thereafter at 3.25 percent above Treasury bill rates. Capital spend is yet to end. Management in their report to investors indicated that a multi-functional machine on order will replace older manual ones and a rotary die cut machine that is being manufactured will be shipped shortly. They are expected to increase production and enhance the quality of products.

2013 profit | Profit for the quarter came in at $7.3 million down from $15.7 million in 2012. For the nine months period, the bottom line reflected an increase in profits to $37.7 million up from $32.56 million in 2012. Revenues climbed in the latest quarter over that of 2012 but only by 5.7 percent to reach $111.37 million, while revenues for the nine months was up by 18 percent hitting $315.77 million. Sales slowed down sharply in the latest quarter from 34 percent increase in the three months to February and 18 percent increase in the November quarter.

Interestingly, even as revenue growth slowed in the May quarter, the margin continues to show improvements as gross profit increased over that of the 2012 May quarter and production raw material cost marginally more to generate the increased sales. Direct expenses climbed 27 percent in the quarter. Rises in administrative cost, finance, interest and depreciation combined to squeeze profit for the quarter, although profit before these expenses grew by $2 million, net profit fell by $8.4 million. In the quarter, interest cost came in at $2.8 million. There was none reflected in results in the prior period. Financial cost rose by $1.3 million and administrative cost increased by $1 million over the February quarter. Some of the increased cost is not expected to recur in the subsequent quarter but indications from the rise in administrative cost in the previous quarter compared with 2012 figures suggest that the cost structure going forward is set at higher levels than before. The company has been focusing its energies on cost containment and the reduction of raw material waste. The improved margins indicates that they have succeeded in this latter area. But there others that they are working on that will bring results in the future. The results to date indicate that they need to get revenues up at a faster pace than the latest quarterly results indicates to more than cover the increased overhead cost.

2012 profit | Sales for the year ended August, 2011 increased by 15.71% to $357.46 million as a result of an increase of 27.19% in the number of units produced. This increase in sales resulted in a 27.23% increase in Gross Profit of $81.31 million (2011- $63.91 million). For 2012, profit of $47.66 million was realised, up 52.45% over the 2011 prior year of $31.27 million.

Finances | Current assets of $199 million including cash of $49 million is more than adequate cover for current liabilities of $87 million. At the end of the February, cash was down to $7 million. Inventories climbed sharply and may well be attributable to the weakness of the exchange rate of the Jamaican dollar, in which case holding inventory at a lower exchange rate will act as insurance coverage for loss in value of the Jamaican dollar. The increase in inventories could well be that sales were taking place at a much slower pace than anticipated based on the hike in sales in the prior quarter.

Production improvement | AMG told its shareholders last year that the new 10,000 square feet warehouse facility was completed and will allow for additional space to stock raw material and finished products as well as expand the production capacity. The facility boasts two loading bays which will enable loading and unloading containers and minimise damage to the rolls. It will enable the company to store raw materials in a secure and proper environment. A paper clamp forklift was acquired and enables moving paper rolls in a more efficient manner.

A new two-colour printing and rotary die cut machine is installed and in production. This acquisition increased production as well as widens the product base. A partition machine was also acquired, expanding the product offering to service companies that package glass products.

Management decided to rearrange the shift system to accommodate a third shift in the near future. The new hours will be 6am to 2pm and 2pm to 10pm. This will eliminate the down time as well as minimize the overtime.

Filed Under: Company News, Company Results Tagged With: AMG Packaging, JSE Company

Ansa McCal profit up but it’s a sell!

July 9, 2013 by IC Insider.com

The Ansa McCal Group has delivered top line revenues of $1,439 million compared to $1,305 million in 2012, an increase of 10% and this translated to a 6% increase in pre-tax and after tax profit and a 6% increase in EPS over the prior year thanks to lower interest cost.

The real issue is that profit fell in the quarter before charging interest on loan funding. But for this, profit would have been down as the group reported operating profit of $211 million down from $222 million in 2011 first quarter. A $24 million reduction in interest cost based on a decision of the Group to reduce their exposure to the possibility of interest rates increases and paid down the level of indebtedness by reducing long term debt of $812 million in 2011 to just $13 million at the end of 2012, helped the Group to deliver the profit of $163.5 million after tax as opposed to $153.8 million in the 2011 period before non-controlling interest in subsidiary. Profit due to the Group’s shareholders amount to $142 million versus $132 million in 2012 or 82 cents per share. All this translate to cost rising faster than income. Not a great surprise as Trinidad has suffered from above normal inflation while the economy is essentially in a recession although 2012 showed moderate growth after three years of declines.

In 2012 the Group made profits of $634 million, in 2011 the profit was $597 million but that was down from the $621 million earned in 2010. However, the Group, looks to be on track to earn around $4 per share for 2013.

A report from the company’s management indicates that “the Group has seen improved performance in Manufacturing, Trading, Distribution, Automotive, Media and Services. The growth in Manufacturing is particularly strong in the construction sector, which indicates increased activity in the economy and this sector remains a key driver of national economic growth. The Group continues to be well positioned to deliver on key strategic initiatives which have been previously announced, inclusive of the new block plant and the ERP project. Based on these factors, we are confident that we are on track to meet our full year targets.”

Cash flow | It is not difficult to see why the loans were paid down in 2012 as the company is throwing off lots of cash with cash flow of more than $411 million for the first quarter helping to swell the cash to $1.78 billion at the end of March, up from December’s $1.366 billion. In 2012 the Group spent $409 million on fixed assets and in 2011, $387 million as they continue to invest for expansion and modernisation. The amount spent in 2012 includes the Group’s acquisition of a furniture manufacturing and retail of appliances and electronic and electrical equipment that operates in Trinidad and Barbados.

Financials | Interestingly, profits have been growing since 2008 but return on equity has fallen each year as the equity to debt ratio improves with the cost of debt being less than the return on equity. Only time will tell if management did the correct thing in paying down cheap debt instead of paying investors more in dividends. This is also a sign that the company is reaching or has reached a level of maturity in the market where its know-how is honed, hence investment opportunities have become limited to utilising its own funds and that of others.

Segments & results | Manufacturing, packaging & brewing enjoyed 10 percent increase in revenues and 34 percent in pre-tax profit, the Automotive, trading & distribution recorded a 12 percent increase in revenues and 41.6 percent growth in pre-tax profit, Insurance & financial services suffered a 1.3 percent decrease in revenues and 11.5 percent fall in pre-tax profit, Media including radio, television and newspaper, services & parent company, increased by 21 percent but generated a 15 percent drop in pre-tax profit.

Buy hold sell |The Group’s finances is strong with a well-diversified portfolio of businesses that can help it weather storms. Unless the Trinidad & Tobago economy springs back to life soon there is little hope for rapid growth in profits. The PE of the stock is around 17 this year’s earnings and the dividend yield is low with a dividend of $1.10 per annum, hence the stock would not be attractive to investors looking to invest for income purposes. The growth rate frankly does not warrant a PE of such heights for the stock. Investors should consider lightening up on this stock based on the above negatives.

The stock trades on the Trinidad & Tobago Stock Exchange.

Filed Under: Company News, Company Results Tagged With: Ansa McCal, TTSE

Cement could be good for your pocket

July 8, 2013 by IC Insider.com

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Last year, Trinidad Cement reported a huge loss of $390 million including a loss of $64 million due to minority shareholders in its subsidiaries. Compare that to results of the first quarter of this year, when the company was able to turn around their fortunes and recorded a surplus.

The Group recorded Earnings before Interest, Taxation, Depreciation and Amortisation (EBITDA) of $114.2 million, a 74 percent improvement over the results for the same quarter in 2012. Revenue for the quarter, increased by $117 million compared with the prior year as a result of higher cement sales volumes in Trinidad and Tobago by 52 percent, in Jamaica by 7 percent, and in export markets by 29 percent, coupled with higher selling prices in most markets. Concrete volumes from Ready Mix, a partially owned subsidiary, also exceeded the prior year period by 10 percent. As a result of the significant expenditure made in the latter part of last year, plant performance has been more reliable and efficient with clinker production exceeding prior year by 32 percent, which is partially due to the TCL strike in 2012, and cement production up by 21 percent.

Finance costs for the quarter increased by $13.9 million largely as a result of foreign exchange losses of $11.3 million arising from the 6.2 percent depreciation of the Jamaican dollar in the quarter. As a consequence of the above factors, the Group is reporting a Net Profit after Taxes for the first quarter of $14 million compared with a loss of $75 million in the prior year quarter. This translates to Earnings per Share attributable to shareholders of the parent of 7 cents compared with a Loss per Share of 25 cents in the prior year.
For the first quarter of 2013, the Group generated net cash from operations of $104 million and made principal and interest payments of $71 million on the restructured loans following the first payment of $51 million made in December last year. Additionally, as at March 31 2013, the Group is said to have met the three financial ratio covenants contained in the loan restructuring agreement.

Finances | TCL is carrying interest bearing debt of $2 billion at the end of March. The debt overwhelms equity of $695 million — not a very good position to be in. The principal repayment amounts to $100 million this year, which saves $10 million in interest payments per annum. In 2014, the amount of loan payment is $171 million. The cash flow so far seems adequate to meet the payments but there is not much wiggle room.

The company directors stated in the 2012 annual report that the Group ended 2012 in full compliance with the loan Agreement. The Board and Management continued to express concerns to the Lenders about several aspects of the debt restructuring that will be burdensome to the Group going forward. These concerns are the extent of interest costs, excessive legal fees, ongoing costs of financial and technical monitoring, costly overseas directors and the requirement for an additional and expensive foreign executive, the statement concluded.

Concern | Of major concern to the Group, must be the nearly 10 percent cost of funds plus the foreign exchange exposure on elements of it, in a country where interest rates are well below 10 percent per annum. Loans amounting to $385 million at the end of December are at variable rates, which means that interest cost could rise before the loans are scheduled to be fully liquidated. In 2018 a balloon payment amounting 43 percent of the restructure debt or approximately $860 million is due for repayment.

Outlook | Management stated that the Trinidad and Tobago market has recorded very strong demand and it is anticipated this will continue. While there was declining demand in Jamaica and Barbados, it is hoped that with the post-IMF agreement in the former, and general elections in the latter, growth will return to these markets. In addition, the growth being experienced in Guyana and Suriname and the initiatives by the Group in the pursuit of additional export markets, plant efficiency and cost containment, are likely to contribute to the continuation of the good results for the coming months.

The Jamaican operation will benefit from a series of price adjustments and the removal of one importer as a competitor. These two developments should bring that operation closer to a break-even position and help improve cash flow.

Risk | Investing in the stock could pay off richly if the company maintains the current trajectory. The PE is around 2 times estimated 2013 earnings at the price of $1 on the TT Stock Exchange on Friday. With the massive debt, an investment in the stock is not without risk should something go wrong that could negatively affect earnings. The capital structure suggests that both the Trinidad and the Jamaican company should be heading to the stock market when conditions improve to raise additional equity capital from the markets and to speed up debt repayment.

Speak your mind | Will you take the leap and invest in TCL?

Read the 9th May 2013 report about Trinidad Cement Ltd, TT Cement huge turnaround but…

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

WITCO profit up 20 percent

July 5, 2013 by IC Insider.com

West Indian Tobacco reported profit of $115.4 million before tax for the three months ended March 2013, an increase of 18.4 percent over the corresponding period in 2012. Profit after tax for the quarter ended at $84.9 million, representing $1.01 per share, an increase of 19.6 percent over 2012 but is down on the December quarter’s figure. IC Insider estimates earnings to exceed last year’s figure and should end up around $4.40 for 2013.

While revenues climbed, the company was able to hold, or lower cost in the period. The cost of sales moved down by $1 million compared to March quarter 2012, as gross profit increased by $16 million and gross profit margin moved up to 73 percent from 70 percent in 2012. Distribution cost just barely inched up around $100,000 but administrative cost slipped slightly while other operating cost declined by $2 million to $14.5 million. The holding of expenses is quite a feat in a country where consumer prices rose by 7 percent since last year.

2012 results | For the year to December 2012 the company reported $4.16 with the December quarter being $1.08 or $91 million which was up strongly from the $79 million earned in 2011. Revenues for 2012 increased by 10 percent to reach $1.1 billion up from $1 billion in 2011.

Finances | Witco’s equity stands at $309 million at the end of March with cash funds of $212 million. Current assets total $308 million and current liabilities $137 million and there is no interest bearing debt.

Dividend | The Board has accordingly approved the payment of a first interim dividend of $0.82 per ordinary share payable on 10 May 2013 to shareholders of record at close of business on 01 May 2013. Last year the company paid out 92 percent of its profit as dividends and the same is expected this year, which has been the norm for several years. The stock last traded at $117.25 and has a PE of 27 and the dividend yield around 3.4 percent much higher than long term rates in the twin island republic. The stock traded at $70.17 in early July last year and has gained 67 percent since then, well ahead of the movement in profits.

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

OCM profits rise strongly

July 3, 2013 by IC Insider.com

Acquisitions and revenues flows from a state election in Tobago and elections in Barbados helped to boost One Caribbean Media (OCM) revenues and profit for the March quarter this year by 40.4 percent.

OCM better results came as profits for the 3 months climbed to TT$18.1 million up from TT$12.8 million in 2012, emanating from revenues which were up by 24 percent to TT$124 million from TT$100 in the prior year. Management, in a statement accompanying the results, stated that revenues were boosted by the state election in Tobago in January and general elections in Barbados and from acquisition of four radio stations that was completed in the third quarter of 2012. They however, caution that the second quarter will be tougher than the first but expect growth to continue. In 2011 profits after tax amounted to $12.3 million pretty similar to that earned in 2012. Second quarter earnings were $18.4 million last year and moved to $22 million in the September quarter as revenues rose nearly 18 percent in that quarter. Revenues for the six months were down by $5 million in 2012 versus 2011. Hence, it would appear that the radio station acquisition during the quarter impacted revenues and profit positively.

Results comparison | The recent results is lower than the amount earned in the December quarter of $21.4 million from revenues of $145.7 million as well as the amount earned in September 2012 of $21.8 million from revenues of $132.6 million. For most media houses the first quarter of the calendar year is not usually the best in either revenues or profit as advertisers take a more moderate position in the first quarter coming out of the high expenditure of consumers and expanded advertising during the Christmas period.

Profit 2012 | For the 12 months to December last year, earnings came to $74.75 million slightly up on the $69.45 million generated in 2011 from revenues of $495 million versus $451 million for non-interest income, an increase of 9.7 percent. However, gross profit rose by 14.6 percent to $178 million from $155 million in 2011, showing greater level of efficiency in generating income. Gross profit margin was 36 percent up from 34.4 percent in 2011.

Financial health | The company is in a healthy financial position, generating annual cash flows of more than $70 million per annum, some of which it is using to acquire other income generating assets. Cash inflows could rise in the current year as profit seems poised to climb above that of 2012. It boasts equity of $620 million with current asset ratio of more than 3 to 1 with cash funds of $188 million at the end of March. Funds are clearly being built up for further acquisitions.

The company announced that on March 26, 2013 its subsidiary, The Nation Corporation of Barbados, acquired a 51% interest in a small, innovative Barbadian renewable energy company with effect from January 1, 2013. This acquisition represents less that 0.4% percent of OCM’s net book value. It is unclear what impact, if any, this acquisition will have on the company’s results in the short term.

Forecast | IC Insider is forecasting profits of $95 million or $1.41 per share for the current year giving the stock a PE of 12.2 times earnings. Based on the Trinidad stock market PE ratio and Guardian which is at PE of 22, the stock is rated a buy for medium term appreciation as the stock price could double based on these comparisons.

Filed Under: Company News, Company Results Tagged With: One Caribbean Media, TTSE

Jamaica Broilers is buy rated

July 1, 2013 by IC Insider.com

IC Insider is projecting a doubling of earnings for the current year ending in April 2014 for Jamaica Broilers. We project profits to hit $2.22 billion, which translates to $1.85 per share, up from the $1.1 billion reported in its latest audited results.

The improvement is expected from restoration of the gross margin for the broiler and feed business to levels that preceded the 2013 fiscal year, as well as increased sales and margin in the ethanol segment from full production compared to only partial production for most of last year. The ethanol operation generated the bulk of the profit in the April quarter of $260 million on revenue of $500 million compared to only $74 million on revenues of $1.36 billion for the nine months to January this year. Just maintaining the profitability in this segment, assuming that the other areas hold up as well as they did in the last year, earnings would likely grow by about $750 million or a little more than 60 cents per share.

The 2013 profit resulted in earnings per share of 91 cents based on 1.2 billion shares issued and arose from a 12.5 percent increase in revenues to $26.7 billion. IC Insider is projecting revenues of $29.8 billion for 2014, representing 11.6 percent more than in 2013.

While the increased results for the full year may not seem impressive as seen by the lack of reaction in the stock market to the results, the final numbers reflect a major recovery from the end of January as profit was down for the nine months from $687 million to $562 million. The last quarter profit jumped by 114 percent suggesting that this trend could continue well into the new fiscal year and is in keeping with the above forecast.

Management’s Comments | In releasing the January results, the company management stated, “Gross profits were negatively impacted by increased US$ costs for corn and soya bean residue — our main feed ingredients. This, in addition to the depreciation in the value of the Jamaican currency, has resulted in continuing cost increases. Management felt constrained during this quarter from fully passing on these cost increases in selling price adjustments.

“Distribution and administrative costs reflect increases when compared to this quarter last year due to a number of unexpected items of expenditure. For much of this quarter our Co-Generation electricity operation was out of service. During this time over $50million in fixed costs were carried in administrative expenses while Jamaica Public Service invoices were charged to the Best Dressed Chicken Processing Plant. The Co-generation plant came back into service in mid-January. In addition, costs were incurred in relation to organizational strengthening and an assessment by the Tax Authorities, related to GCT deferred on imports.

The Ethanol Division maintained production under tolling contracts at 100% of capacity during this quarter. The segment result for this Division reflects a positive $81 million for the quarter; with the year-to-date result now showing $74million versus the negative $7 million at the end of the second quarter. Also, the build out in the Haiti operations is continuing with ever increasing sales of Haitian produced baby chicks, feed, layer birds, table eggs and processed chicken.”

Balance sheet | JBG was able to reduce the levels of inventories carried from sales to inventories of 7 times to 9 times, but it did not stop there, as inventories actually fell by $400 million, while at the same time, receivables climbed by $500 million at year end. The group took on more debt to fund asset acquisitions during the year as net debt climbed $1.38 billion to reach $5.49 billion but equity is up by $1.3 billion.

To read the full report Jamaica Broilers major profit gains, click here

Filed Under: Company News, Company Results Tagged With: Jamaica Broilers, JSE Company

Jamaica Broilers major profit gains

June 27, 2013 by IC Insider.com

Jamaica Broilers (JBG) is reporting 17 percent improvement in after tax results for the year to April 2013 with profits of $1.1 billion versus $936 million in 2012. Earnings per share is 91 cents for the latest year based on 1.2 billion shares issued.

These results arise from a 12.5 percent increase in revenues to $26.7 billion, a record in nominal terms. Profit growth did not come from the company’s traditional business but from ethanol production and other operations. The increase may not seem impressive when looked at for the full year but it represents a major recovery from the results at the end of January when profit was down for the nine months from $687 million to $562 million, resulting in a comeback in the last quarter with profits jumping by 114 percent. Profit before tax was up less impressively, by 70 percent from $307 million to $521 million.

Most of the profit growth came from the ethanol and other operations according to the segment data. Poultry contributed $82 million less than in 2012 and feeds contribution was $215 million less. Ethanol delivered $273 million and others $385 million more than 2012. The ethanol operations made the bulk of the profit in the April quarter. Up to January, only $74 million was generated from this operation but it jumped considerably in the last quarter.

Cost pressures hit the operations with segment profits lower to December for poultry and feeds as well as in the last quarter compared with the same period in 2012. In the last quarter, things were coming back for the poultry with segment profit of $296 million versus 300 million in 2012 and for the feeds segment, it was still off badly as just $161 million was generated in April quarter compared to $271 million in 2012. For the nine months to January, the poultry had a segment profit of $633 million versus $713 million in 2012 and for the feeds segment it was $749 million compared with $854 million.

The company took on more debt to fund assets acquisitions during the year as net debt climbed $1.38 billion to reach $5.49 billion but equity is up by $1.3 billion.

Filed Under: Company News, Company Results Tagged With: Jamaica Broilers, JSE Company

Big payoff for Access owners

June 27, 2013 by IC Insider.com

Access Financial Services declared an interim dividend of 31 cents per share payable on August 15, 2013 to shareholders on record as at August 9, 2013. The ex-dividend date is August 7, 2013.

This is the first time the company is paying two dividends in one year. The last dividend paid was an interim dividend of $0.65 per share payable on February 27, 2013 to shareholders on record as at February 21, 2013 and related to 2012 profit.

The latest dividend announced will, when paid, bring the dividend payment to 96 cents for the year and will give shareholders a yield of 15.23 percent based on the stock price at the start of the year of $6.30. The Chairman has confirmed that “Access is likely to pay more than one dividend payment for the fiscal year going forward.”

The stock last traded at $8.15, a gain of 29 percent so far. IC Insider is projecting that the stock will rise much further as profit for this year could rise to well over $1 per share.

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

Unilever stock not supported by profits

June 27, 2013 by IC Insider.com

When stock prices rise much faster than the growth in profits, we need to take time to take note of what is happening. Investors in such stocks should be fully conversant with the factors at play to ensure that their investment can be properly protected if, and when, the factors change.

Unilever Caribbean stock price is up 13 percent so far this year on top of a 45 percent increase in 2012, 44 percent in 2011 and 35 percent in 2010 after a 16 percent fall in 2009. The company a subsidiary of Unilever PLC, a United Kingdom company, is based in Trinidad and manufactures a range of homecare, personal care and food products for the Caribbean region, including Jamaica, and has been having a reasonable profit performance for a number of years. In fact they have been able to improve sales and margins in a market that has been in recession since 2009. The growth in the stock price is well in excess of the rise in profits for the past four and half years.

Some of the company’s brands include Mistolin, Radiante, Breeze, Vaseline, Lux, Lipton, Becel and Blue Band. The product range also includes dishwashing liquids as well as fabric conditioners.

For the three months to March this year, revenues climbed to $133 .6 million up from $127.5 million for the same period in 2012 while profits were up to $13 million after tax compared to $11.9 million in 2012. The December quarter is the biggest period for earnings with more than a third being generated in the period. For 2012 full year to December the company reported after tax profit of $59.5 million an increase of 2.8 percent over that earned in 2011. Profit for 2011 was up 11 percent over 2010 and 2010 profit was up 26 percent over the previous year. Lower interest rates in Trinidad have helped to push the PE ratio to 21 times earnings at a current stock price of $53.25, up from 14 times in 2011 and 11.5 for 2010.

Unilever reported areas of success reflected in good growth in some of its products but also expressed concerns about rising input cost of some of the products it manufactures as well as competition from cheaper products. From all indications, management seems to have managed to steer the operations well resulting in improved margins, which moved from 61.8 percent in 2012 first quarter to 63.8 percent in 2013, a continuation of the marked improvement seen for 2012 when the margins for the full year came out at 63.7 percent vs the 59.2 percent enjoyed in 2011.

While cost increase seems to be under control in 2013 for the first quarter, that was not the case in 2012 when selling cost rose by $17 million or 17 percent and administrative cost rose 22 percent, well above the growth in revenues. For the quarter, selling cost rose by 4.8 percent and administrative cost rose 2.7 percent while revenues are up 4.75 percent.

The company boast equity capital of $176 million, has no interest bearing debt and a high current asset ratio with liabilities almost covered twice over.

The stock seems poised to rise further as demand exceeds the supply of the stock on the Trinidad market.