Profits up 28% at Jamaican Teas
Sales were helped by 91 percent jump in exports, moving from $55 million to $103 million. The increase in exports, relate mainly to supplies to the US market and is partially due to the appointment of a new Distributor for the North East USA and expect that this will result in further improvement in sales. Revenues for the group, in the prior year, included $21.75 million in Real Estate sales. Excluding these sales, revenues would be up 26 percent for the quarter. Group sales also benefited from the launch of four new products during the period. Sales for Supermarkets are up 9 percent compared to the comparative quarter, in 2013, however, profits are flat. The jointly owned Supermarket in Montego Bay showed a reduction in losses which was helped by certain actions taken to reduce cost in 2014.
Gross profit margin increased to 24.3 percent from 24 percent in 2013, while gross profit increased 16 percent to $62 million but cost rose in other areas, with marketing climbing 24 percent to $7.3 million, administration by only 4 percent to $25.5 million and finance used to generate revenues in the period, is up 14 percent to $6.2 Million.
Property Development| The group has completed construction of more than 50 percent of units in phase 1 of the development in Yallahs, St Thomas. Approximately a half of the units in the first phase have been sold, delivery to the purchasers should start in April. The group should enjoy increased profits from this development which should start reflecting in the June quarter.
Borrowed funds stand at $320 million including long term debt of $228 million and equity capital at $660 million.
Barring any unforeseen developments, 2015 could produce the best financial performance far. The stock which is now at $2.55 seems to have much room for growth.
Profit up 137% for RJR in Q3
The major improvement should be great news to shareholders who have seen the price of the stock tumble to a low of $1 per share last year, as profit melted away with sluggish revenues growth. The final quarter based on history, is likely to be a small profit at best, hence investors should not be looking at too much more in profits when the financial year ends. Earnings per share ended at 29 cents for the quarter and 32 cents for the nine months.
Gross profit margin improved in both the quarter and year to date, versus the prior year as sales grew 16 percent to $590 million in the quarter and 10 percent in the nine months, to reach $1.4 billion. Other revenue jumped sharply in the quarter due to foreign exchange gains, management states. Gross profit also increased at a faster pace than sales revenues. Cost increases were kept to 8 percent in the December quarter and 11 percent for the nine months.
RJR is in a healthy financial state with cash funds amounting to $130 million, loans of $2036 million, working capital of $565 million and equity capital of $1.3 billion.
The stock last traded at $1.10 on the Jamaica Stock Exchange on Friday.
Is Carreras set for price rise?
A price increase cannot be far away for cigarettes sold by Carreras, with margins under pressure flowing mainly from slippage in the value of the Jamaican dollar taking a toll on the margins, since the last price increase in 2013.
With the squeeze in margin, sales also fell in the December quarter by 11 percent, bringing the year to date sales increase to only 5 percent. Cost slipped 1 percent in the December quarter, with a sharp reduction of 57 percent in sales and marketing cost for the quarter and 24 percent for the year to December. Administrative cost jumped 22 percent for the quarter and 16 percent for the nine months. The decline in sales may just be a normalisation in sales. In the past, there was speculation around the end of each year that the company will increase the price of cigarettes which encouraged the trade to stockpile ahead of such price movements and profit from it.
Carreras has entered into an agreement to sell the factory location that it operates from in Spanish Town to Kingston. Cost is expected to decline as a result and should ease some of the pressure on the bottom line. Those savings will be inadequate to cover the fall in gross profit suffered in the December quarter of more than $220 million.
At the end of the year the cigarette marketers, reported profit of $763 million for the quarter and $1.97 billion for the nine months to December earnings per share for the quarter amounted to $1.57 and $4.05 for the nine months and is on target to hey close to $6 per share from continuing operations. During 2013 the company booked a large gain for interest due on debt owed to them by the tax authorities. Investors should expect high dividend payment and periodic spurt in profits after the company adjust prices higher. Price has been on the move since bottoming at $32 last year and is now at $44 but seems headed higher in the months ahead as interest rates continue to fall.
Rights for TCL shareholders
Shareholders in Trinidad Cement will be offered additional shares in the company by way of a rights Issue of 124,882,568 new shares, to be priced at TT$2.90 per share. Shareholders will be offered the right to purchase one new share for every two shares held. The stock last traded at $2.70 on Thursday on the Trinidad Stock exchange. The issue if fully taken up will raise $362,159,447 for the company.
The issue will be underwritten by up to US$45 million by Sierra Trading an affiliate of Cemex SAB to ensure that the minimum funding targeted of US50 is met. In order to have the underwriting of that magnitude the company needed to and got permission of shares at an extraordinary meeting to lift a 20 percent shareholding limitation, in case the shareholders did not subscribed to enough of the rights they are entitled to.
Sierra Trading will take up the rights due them on their 20 percent ownership of the group. The agreement stipulates that if after the rights issue the underwriting company does not get up to 35 percent of the shares of TCL then there will be a private placement of TCL shares to bring the holdings to 35 percent of TCL issued shares.
TCL is loaded down with debt at relatively high interest rates. The debt at the end of 2013 was just under TT$2 billion all of which has been switched to current liabilities as a result of the default occasioned by the decision of the company to suspend payment on the debt pending negotiation of the terms. Equity stood at TT$570 million at the end of September, well below the debt. All amounts are in TT dollars. If the fresh capital is raised equity will reach around $1 billion and loans should decline to around $1.3 billion by the end of 2015 or close to a one for one relationship between debt and equity. The improved capital profile of the company should allow them to finance the remaining debt at a more advantageous cost than currently.
The rights is not badly priced as the stock an IC Insider BUY RATED seal of approval is severely undervalued on the TTSE. Investors will of course take into consideration negative economic development in Trinidad its main market with the fall in oil prices world wide an its impact on revenues for the country.
Lower rates to drive JPS profits
There has been much made about the OUR cutting the rate for Jamaica Public Service (JPS) and the likely effect on investment in the sector. Unfortunately, many who are critical of the reduction failed to make the point that when JPS was guaranteed a 16 percent rate of return, interest rates locally were well above present levels.
Secondly, just over 12 percent after tax is a good rate of return when one considers that international interest rate are so low and treasury bills rate locally, have been declining and is now under 7 per annum. One of the most telling factors is that JPS is by no means the most efficient company especially with its plants, and newer ones will reduce cost to operate, thus helping to improve their bottom line. Most telling now, is that the lower price of electricity occasioned by lower oil prices will drive up consumption thus helping to improve JPS profits. With the latest announcement of a cut in billing rates JPS must be quietly cheering and hoping that oil remains low for a very long time.
In its latest release the power company states that “the Fuel & IPP charge on bills will be reduced by 18%, moving from $19.350 per kWh in January to $15.760 per kWh on bills this month. This will contribute to an overall reduction of 11% on customers’ bills should their usage remain consistent.”
It is also important to note that the Fuel and IPP Rate in US terms for February is 13.608 cents, the lowest the rate has been in US denomination in almost six years. The Fuel and IPP charge makes up more than 60% of customers’ electricity bills, and changes from one month to the next, depending on how much JPS pays Petrojam for the oil used to produce electricity. The fuel rate that appears on bills each month is based on the cost of the fuel used to generate electricity in the previous month.”
“JPS encourages customers to continue their conservation efforts, despite the drop in the Fuel Charge on bills, as the total amount on bills is determined by how much electricity is used.”
59% jump in Medical Disposables’ profit
For quarter revenues jumped to $308 million compared to $236 million for the quarter to December 2013 and in gross profit climbing 42 percent to $81 million for the December 2014 quarter. Gross profit for the nine months to December amounted to $216 million, an increase of 32 percent. Sales revenue for the nine months ended at $848 million, an increase of $183 million or 27 percent.
Expenses rose sharply for the quarter and the year to date. Sales and distribution rose 45 percent in the quarter and 20 percent for the nine months. Administrative expenses increase by a lower 29 percent for the quarter and a robust 49 percent for the nine months. Finance and o0ther cost moved up strongly for both the quarter and year to date to hit $14 million and $27 million respectively.
“The increase in expenses was driven mainly by staff related expenses, utilities, professional fees and information technology services. Staff related expenses, in particular, increased because of the strategic decision to realign the staff complement and compensation to sustain the current growth, development and expansion of the business” Kurt Boothe, General Manager stated in his report to shareholders.
Profit for the quarter came in at $18.6 million as it surged by 59.4 percent compared to $11.7 million generated in 2013. Profit after tax for the nine months hits $57 million, an increase of 60 percent. Earnings per share came in at 7 cents for the quarter and 22 cents for the nine months and should end up around 30 cents for the full year.
Medical Disposables is listed on the junior market of the Jamaica Stock Exchange and last traded at $1.80.
Carreras’ owners enjoying dividends
Carreras declared an interim dividend of $1.60 per share payable on March 12, 2015 to shareholders on record as at February 20. The stock will traded ex-dividend on February 17.
The company last paid dividend of $1 per stock on December 18, and an interim dividend of $1.20 per stock unit on December 11, 2014. The payment will bring to total for 2014 to $8.09 for a return of 22 percent for the year based on the stock price of $36.75 at the end of 2013.
In September, last year Carreras paid an interim dividend of $1.20 per stock unit, $1.75 per stock unit was paid on June 26. On March 13, 2014 they paid $1.62 per share.
A special capital cash distribution of $1.34 per stock unit was paid on July 31 and a special capital cash distribution of $1.18 was last paid on January 30, last year. The company still has more capital distributions to make when they receive the proceeds from the sale of the property in Twickenham Park which is sold at $395 million before transfer cost and the balance of funds due from the tax authorities for over payment of company taxes which amounted to $940 million at the end of September, last year.
The stock traded as high as $45 on Wednesday February 11, on the Jamaica Stock Exchange.
Carreras fetches $395m for property
Shareholders who have been enjoying a bumper period of high returns on their shares since 2014, should see another pay out from the net proceeds of this sale.
C&WJ revenues up 27% in Q3
“In the Third Quarter we have continued to build momentum through our investment-led Project Marlin and we are continuing to deliver top line growth” Phil Bentley, Chief Executive of CW Communications, commented in a release of the group’s third quarter results today.
“Investments in our mobile networks have improved coverage and reliability and we saw mobile data grow a further 23 percent with traffic carried on our networks increasing by over 35 percent. Fibre investments have focussed on our Caribbean markets and are key to generating growth in the Broadband & TV segments. We continue to work with Governments and Regulators to gain the required approvals for completion of the Columbus acquisition and are on track to close before our fiscal year end” Bentley stated.
The groups CEO went on to say “Mobile revenue (53 percent of Group revenue) was up 4 percent in the Third Quarter driven by growth in LIME and Panama, up 10 percent and 4 percent respectively. LIME growth was driven by continued subscriber additions in Jamaica, 18 percent where investment in our 4G mobile network led to constant currency revenue growth of 27 percent and an NPS gain of 11 points, whilst in Barbados our “Upgrade Barbados” marketing campaign led to 6 percent revenue growth and our market-leading LTE service in Cayman drove revenue growth of 3 percent. Panama mobile growth followed a strong increase in subscribers, primarily within prepaid, as a result of increased promotions leading up to and through the holiday season.”