Q3 profit climbs 18% at GraceKennedy

November 19, 2023 by

Profit after tax climbed 17.7 percent to $1.77 billion for the September quarter this year, compared to $1.5 billion over the same period in 2022 at GraceKennedy, from a 13.5 percent rise in revenues to $39.55 billion, up from $4.85 billion in 2022. Profit before tax for the third quarter rose 15.7 percent to $2.62 billion from $2.27 billion as Revenues climbed 13.5 percent to $39.56 billion from $34.85 billion.
For the first nine months of the year, revenues rose 9.7 percent to $117.8 billion, over the $107 billion earned for the nine months to September 2022. Profit before tax reached $8.8 billion, up 14 percent from $7.7 billion and net profit after tax attributable to shareholders of the group rose 14.2 percent to $6.4 billion from $5.6 billion.
The profit translates to earnings per share for the third quarter of $1.79 and $6.02 for the nine months, compared to $1.52 and $5.23 in 2022, respectively.
Earnings per share for the full year ending in December should hit the $8 market, with a PE ratio of 9 based on Thursday’s last traded price of $71.50.
“GK’s food business demonstrated b performance, with notable growth in revenue and profitability for the period. GraceKennedy Financial Group also delivered a positive performance, driven by b top-line growth” Gordon Shirley, chairman and Don Wehby, Chief Executive Officer stated in their commentary on the results.
The company will pay a dividend of 65 cents per stock unit on December 15 totalling approximately $643 million. This is the fourth and final dividend payment by GK for 2023, bringing GK’s year-to-date total dividend payout to $2.15 billion.

Group Chief Executive Officer, Don Wehby.

Direct and operating expenses rose from $33.2 billion in the September 2022 quarter to $37.57 billion, for the year to date it moved from $101.93 billion to $111.7 billion. The group incurred impairment loss on financial assets in the quarter of $100 million compared to $96 million in the previous year and for the year to date, $233 million versus $230 million in 2022. Other income delivered $856 million to profit in the third quarter up from $752 million in 2022 for the similar period, and for the year to date $2.76 billion versus $2.36 billion in the prior year.
Interest income from non-financial services amounted to $161 million in the September quarter down slightly from $169 million in the 2022 third quarter and for the year to date $474 million up from $424 million for the nine months to September 2022. Interest expense rose to $415 million in the latest quarter from $276 million in 2022 and for the nine months, $1.2 billion up from $919 million in 2022. Associated companies contributed $115 million in the September quarter, virtually flat with $114 million in the previous year and $638 million in September 2023 versus $539 million last year.
The group’s lending activity saw loans advanced to customers rising 12.6 percent to $40 billion at the end of September this year while investment securities climbed to $51.6 billion from $36.96 billion at the end of September 2022. Receivables climbed quite sharply by 35 percent from $19.5 billion at the end of September 2022 to $26.3 billion well ahead of the increase in revenues. On the liability side, deposits grew 23 percent to $61 billion from $49.6 billion at the end of September 2022. Loans received by the group amounted to $30.4 billion a slight increase from the $29.5 million at the end of September 2022. Shareholders’ equity ended the period at $77.8 billion, up from $69.7 billion at the end of September 2022.
In commenting on the results, Gordon Shirley Chairman and Don Wehby in a jointly signed report stated “GK food business demonstrated b performance in the first nine months of 2023 with notable growth in both revenues and pretax profit. Our Jamaican food division achieved commendable results.”

Grace Kennedy products

“The manufacturing business also delivered improved results over the previous year. Hilo Food Stores continue to display robust performance in 2023 powered by increased sales. Our international food business experience improved performance in comparison to the same period last year. But growth in revenue and profitability was achieved by GK Foods USA and Grace Foods UK, while Belize and Grace LACA also saw growth. Our La Fe and Grace brands experienced significant growth in the US market, Grace Foods Canada continues to work at overcoming operational challenges and inflationary pressures in that market.”
“The Financial Group delivered positive performance driven by b top line growth. Our insurance segment sustained growth throughout the period.”
First Global Bank delivered improved results over the prior year aided by increased lending. Remittance services suffered a slight dip in revenues and profit and is partnering with Courts to locate the Western Union outlets in their stores. Bill Express also experienced growth in the period.
Based on the above PE ratio that is much lower than the market average of 13 the stock is undervalued measured by net book value that is the price is less than two times book which is low, with several of its peer trading at a much higher valuation based on net book value. Grace’s main problem is that it is a very liquid stock as there is no dominant shareholder controlling a near majority

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Profit rises 14% at GraceKennedy

November 9, 2023 by

Revenues at GraceKennedy rose 9.7 percent to $117.8 billion, over $10.4 billion earned for the nine months to September over the same period in 2022. Profit before tax reached $8.8 billion, up by J$1.1 billion, or a 14 percent increase, while net profit after tax rose 14.2 percent to $6.4 billion.
Profit attributable to stockholders hit $6 billion, a 15.3 percent increase over the corresponding period last year. Earnings per stock unit for the period were $6.02, compared to $5.23 in 2022.
Earnings per share for the full year ending in December should hit the $8 market, with PE ratio of 9 based on Thursday last traded price of $71.50.
The company stated that “GK’s food business demonstrated strong performance, with notable growth in revenue and profitability for the period. GraceKennedy Financial Group also delivered a positive performance, driven by strong top-line growth”.
A dividend of $0.65 per stock unit has been announced and will be payable on December 15, 2023, totalling approximately $643 million. This is the fourth and final dividend payment by GK for 2023, bringing GK’s year-to-date total dividend pay-out to approximately J$2.15 billion.

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Transjamaican stock doubles in 2023

October 5, 2023 by

Transjamaican Highway stock closed trading on Wednesday with a gain of 105 percent at a record close of $2.87 on Wednesday and traded at a record $2.95, up 111 percent on Thursday morning, to be one of only two stocks on the Main Market of the Jamaica Stock Exchange to gain more than 100 percent for the year to date, the other being Ciboney up 139 percent.

New record high for the JSE Junior Market.

Investors in Transjamaican, the operators of Highway 2000 have much more to cheer about as the company raised the dividend to be paid in October by 118 percent to 18.66 cents up from 8.55 cents last year. The dividend adds another 13 percent to their return for 2023 based on the opening price for the year of $1.40. While the 2023 performance is a big reward for investors in the stock, it has been a long wait for early investors who bought in the IPO at $1.41 in February 2020, valued then at a PE ratio of 25 times, when the market was averaging 16 times. Critics of the value at the time indicated the serious overvaluation but supporters hailed it as reasonably priced. Now the stock is trading at less than 10 times 2023 earnings of 30 cents per share and buyers have been less than ecstatic about it, by slowly driving the share price to current levels over several months.

Transjamaican Highway

The stock’s performance is supported by an outstanding jump in profits for the six months to June over the similar period last year, with earnings of 14 cents per share versus just 3 cents for the same period last year, with the profit ballooning 338 percent for the June quarter to US$6 million and 442 percent to US$11 million for the half year. Revenues and profit rose as a result of the acquisition of its new subsidiary, Jamaican Infrastructure Operators which reduced cost considerably as well and the group benefitted from increased revenues from operating the toll road. The stock’s performance was also helped by the declaration of the substantial increase in dividend.

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SOS directors to consider splitting the stock

June 19, 2023 by
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The board of directors of Stationary & Office Supplies informed the Jamaica Stock Exchange that they will meet on Wednesday, June 21st to discuss and consider whether or not to recommend a stock split to the company’s shareholders.

SOS is likely to split stock in 2023.

According to the release, “the market value of the company’s stock has been on a consistent growth trajectory and the liquidity of the stock is also a significant consideration.”
At the last annual general meeting the CEO, Allan McDaniel stated that they were reviewing the matter of a stock split on an ongoing basis but that trading in the stock was fairly liquid as such there was no need to make the adjustment then.
ICInsider.com gathers that the $20 was likely to be the trigger point for a split. Last week the stock traded at $24 but pulled back to $20 where it is now trading, but if history is anything to go by, the price is likely to climb in Tuesday’s trading. With profits for the current year likely to hit nearly $2 per share and around $3 in 2024, that could push the price between $30 and $40 this year and $50 to $60 next year, a split in the order of 10 could place the price closer to where Junior Market investors could find the stock reasonably priced and encourage greater trading in it. A 10 to 1 split would lift the issued shares to just over 2.5 billion units which would be within a level that would facilitate a great deal of liquidity for a number of years, but the price could be back in the teens again in 2024. Even a 5 for 1 would result in an enhanced level of liquidity with just over 1.25 billion units in issue and push it to 16th Junior Market company in terms of the number of issued shares and 6th if a 10 to 1 split was to be approved. The prospects of profit jumping sharply in 2024, if achievable and seen by management as likely then a 10 to 1 split would seem to be the better option.
The split if approved by the directors, would require ratification by shareholders at a general meeting and that is likely to be at the company’s upcoming general meeting.
The next stock split could well come for Cargo Handlers, with thin trading currently with the price now in excess of $20. Dolphin Cove seems to be shaping for a possible spilt as well but that would be more likely down the road.

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Palace stock trades ex-split next Monday

February 20, 2023 by

Palace Amusement stock will trade x-split starting Monday, February 27, following approval at the January Annual general meeting of a 600 to 1 split with the record date of February 28.
The split will take the total number of shares to 862 million from 1.437 million currently and provide more liquidity in trading the company’s shares as more investors will be attracted to it than previously. The stock that traded on Monday at up to $2,700 will see the price dropping to the $4 plus range after the split takes effect next week.
The split comes at an opportune time for the company with its first profit since the March 2020 quarter and one of the best quarterly results in the company’s history.

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The stock has enjoyed regular trading since the announcement of the split with the price reaching a record $3,300 and is now trading in the $2,700 range since releasing half year results with profits and revenues surging 222 percent to $486 million, with a profit of $79 million in the December quarter.
The split will result in the stock trading in the $4 to $6 region and will result in almost daily trading thus providing the company with regular publicity that it never had before based on the limited trading opportunities in the past. Such exposure could well result in a 10 to 20 percent jump in attendance as the name and product are beamed regularly on a wider audience than before.

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Stock split to drive business for Palace

February 20, 2023 by

Palace Amusement stock will trade x-split starting Monday, February, with the record date of February 28 for the 600 to 1 split that will take the total number of shares to 862 million for 1.437 million currently and provide the company with added ongoing publicity.
The stock has enjoyed regular trading since the announcement of the split with the price reaching a record $3,300 and is now trading in the $2,700 range since releasing half year results with profits and revenues surging 222 percent to $486 million, with a profit of $79 million in the December quarter.
The split will result in the stock trading in the $4 to $6 region and will result in almost daily trading thus providing the company with regular publicity that it never had before based on the limited trading opportunities in the past. Such exposure could well result in a 10 to 20 percent jump in attendance as the name and product are beamed regularly on a wider audience than before.

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SOS dividend consideration sends stock price flying

July 19, 2022 by

Stationery & Office Supplies announced that the board of directors will consider the payment of a dividend at a meeting to be held on August 9, 2022 and with the stock price closing at a 52 weeks’ high of $15 and seems to be heading higher.
The company last paid a dividend of 16 cents per share on December 7 last year. The early announcement caught the market by surprise as investors bought 303,359 shares up to a 52 weeks’ high of $15, with the stock closing with the bid at $15.84 and the offer at $17.90 and gaining 135 percent for the year to date.
The likely early payment is signalling that the company could be switching to twice a year payout as well as the fact that the good results evident in the first quarter is continuing into the rest of the year.
Some observers are of the view that the dividend announcement by itself was unlikely to move the stock price by the amount in today’s trading and think investors are sensing a stock split.

SOS to make early dividend payout

With the stock price having risen and seems set to go higher the price is clearly entering into a split territory, considering that there are just 250 million shares issued with the top 10 holdings accounting for 90 percent and leaving only about 25 million units that are likely to trade short term. The possibility of a stock split coming up for discussion at the meeting considering a dividend seems probable but such an action if it were to occur would have to be communicated to the Jamaica Stock Exchange ahead of any meeting at which it was to be approved.
The March quarter profit rose 90 percent to $105 million over that for 2021 and ICinsider.com forecast earnings of $1.70 for the current year.

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Barita to pay $666M in dividend

June 9, 2022 by

Barita Investments will be paying an interim dividend of 54.6 cents per stock unit on June 30, 2022, the company advised.

The company’s Board of Directors approved a Resolution on June 9, 2022, for the payment to shareholders on record at the close of business on June 23, 2022, and will cost $666.3 million.  The stock will trade ex-dividend on June 22, 2022. The company last paid a dividend of $3.029 per stock unit on October 7, last year, to shareholders on record at the close of business on September 23, 2021.

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Elsewhere, Scotia Group reported financial results with a net income of $4.4 billion for the six months ending April 2022, down from $4.48 billion in 2021 for the same period.
The Directors of Scotia Group approved a dividend of 35 cents per stock unit in respect of the second quarter, payable on July 20, to stockholders on record on June 28. The dividend amounts to $1.09 billion amounting to 42 percent of the profit on 83 cents per share in the April quarter.

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Caribbean Cement and poor management

June 7, 2022 by

Investors entrust capital to public companies with the expectation that their interests will be properly protected, but that does not appear to be the case with local investors at Caribbean Cement Company. Last year against to outcry of local investors the company rammed through fees for royalty to be paid in addition to management fees already be paid to Cemex, the ultimate parent company.

Caribbean Cement proposed a $1.50 dividend per share in August

Last month, the company proposed a meeting to consider the payment of a dividend that was not managed appropriately by the company, neither before nor after the meeting.
The Board of Directors Caribbean Cement Company advised shareholders that a meeting of the board that was held on May 26, 2022, recommended presenting an ordinary resolution to shareholders to declare a final dividend of $1.5032 per share payable on August 15, 2022. 
That is a great development, considering the company last paid a dividend in 2004, but the wider public was deprived of such price sensitive information. To compound the problem, the company haled the meeting and kept the information for a week before communicating the decision to the exchange, even though the rules require immediate release of the decision immediately after the meeting.
In an article reporting the decision of the board, the company through its secretarial department took issue with the article stating that they seem to have breached the JSE rules that require that any meeting to consider the payment of a dividend must be communicated to the JSE at least 7 days ahead of the meeting. So far no such notification was posted on the Stock Exchange’s website up to Tuesday evening.
The company provides the evidence of two letters addressed to the Jamaica Stock Exchange notifying that a meeting would be held initially on May 23 another dated May 20 indicates a change in the date to May 26. None of these letters are yet on the Jamaica Stock Exchange’s website.
A spokesperson at the JSE confirms that the letters were in fact received but that it is the responsibility of the respective companies to ensure that the notice is uploaded to the JSE portal from which the relevant staff would approve the same to be uploaded to the website.
While the JSE was informed by letter technically, the company is in breach as they did not follow up to ensure the information was received and in fact posted to the website what was very sensitive information considering this is the first time that the company would be considering a dividend payment since 2004 when they last paid one amounting to 7 cents per share amounting to $60 million.
Based on the price movement in the market last week it appears that the information was already in the market.
While Caribbean Cement cannot escape responsibility for the matter not being communicated to its shareholders on a timely basis, The JSE cannot escape some blame either. Once the letters were received they should have followed up with the company since it was not on the portal.
No one seems to be following up on electronic communication in this modern era. The handling above, epitomizes, what seems like today’s communication practice that assumes once an email is sent, the other party must have read it, and therefore there is no need to follow up.
Cement traded at $67 on the 16 of May, the next day the last price fell to $64.80 and then to $61.50 on the 18, bouncing to $63 on May 19, but back to $60.51 on the May 24. On the 26 and the 27, the price moved up to $63 and moved to $69.70 on the first of June and traded at $66 on June 6, and jumped to $74 on the 7th.

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Big dividend payout by Caribbean Cement

June 6, 2022 by

Caribbean Cement Company is set to make a sizable dividend payment in August. The Board of Directors advised that a meeting of the board that was held on May 26, 2022, recommended to present an ordinary resolution to shareholders to declare a final dividend of $1.5032 per share payable on August 15, 2022. 
The proposed payment represents 29.475 percent of the profit of $5.10 per share for 2021. The proposed record date is August 4, 2022, with an ex-dividend date of August 3rd. The recommendation will be made to shareholders at the Company’s next Annual General Meeting.
The company seems to have breached the JSE rules that require that any meeting to consider the payment of a dividend must be communicated to the JSE at least 7 days ahead of the meeting. So far no such notification was posted on the Stock Exchange website.
The payment if approved would amount to $1.28 billion and would represent the first such payout since 2004 when 7 cents per share was paid amounting to $60 million.

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