A strong 88 percent jump in fourth quarter revenues, spawned 55 percent increase in pretax profit of $22.9 million, up from $14.8 million in 2013, at Knutsford Express.
For the 12 months to May, pretax profit climbed marginally to $56. Earnings per share which ended at 50 cents for the full year, is up to 23 cents for the last quarter. The latter is what investors would be really interested in, as it gives a good indication, of a rise in profit for the 2015 year.
Management in commenting on the data, indicated in their report accompanying the results, that ridership on the south coast of the island is growing and “signals readiness for enhancement to our schedules on this side of the island.”
Revenues for the quarter, climbed a strong 89 percent, to $96 million from $51 million in 2013, and from $203 million in 2013, to $323 million in 2014.
The result for 2014 is an improvement over the February 2014 quarter, when they reported $90.6 million in revenues and profit of $9.9 million before taxation and is a reflection of continuing growth in business. With the latest figures and signs of continued growth in revenues, earnings for the 2015 year should be around $1 per shares which would place the stock at an interesting valuation with some growth potential, in the stock price to somewhere in the $8-10 range over the next nine months or so compare to $5.16 it last traded. The stock is not in abundant supply and has only traded on a total of seven days, since listing in January this year.
The company’s finances are in a healthy state, with little debt, equity of $159 million and cash of $54 million.
Knutsford enjoying the good times – now Buy Rated
AMG profit up 93% in Q3
Junior market listed company, AMG Packaging, enjoyed increased revenues and profits in the May quarter than they did in the same period, the previous year.
Revenues rose 36 percent in the quarter, to $151.6 million and 40 percent in the nine months to May, to reach $442.4 million, but profits were up by a very strong 93 percent in the quarter to $13.37 million from $6.9 million in 2013, and just moderately better in the year to date period, with $36.87 million versus $35.5 in 2013. Units sold increased by an impressive 23.4 percent, management sated in a release accompanying the results.
There is a noted build-up of inventory from $93 million to $174 million which would be a combination of rising import cost resulting from the devaluation of the local currency, as well as a hedge against continued devaluation and the need for more inventory to service increased demand for the company’s products.
While profit is up, an area of concern is the slippage in the gross profit margin, with the latest quarter, coming in at 25.95 percent, down from 31.19 percent in 2013, and for the nine months, it fell from 34.62 percent in 2013, to 24.20 percent in 2014.
For the three months, gross profit grew by 17.95 percent, much slower than the sales growth. For the nine months, the growth was a mere 6 percent. Fall in administrative cost from $13.38 million to $10.6 million in the May quarter and a decline in the nine months period, from $32.98 million down to $30 million, helped in boosting net profit. Other areas of cost savings, include finance by $4.4 million and depreciation $2.5 million, for the nine months.
Return on equity is around 18 percent, down from 20 percent in 2013 and could be accepted as being good, but there appear to be room for improvement. Receivables are up by $19.5 million over the company’s previous fiscal year ending of August, and so too is amounts in payables, climbing by $63 million, which seems to be helping to fund the inventory build while cash is down from $34 million to $8 million.
The continued increase in volume sales and cost containment augurs well for profit improvement going forward. With increased through put, unit cost of production will fall, allowing more growth in gross profit to flow into overall profits. AMG has to continue to grow its business by continued strong volume growth, to become a more cost competitive producer with lower unit cost.
IC Insider’s forecast for 2014 is 60 cents per share and $1.20 for 2015 on the assumption that volume sales continue close to current growth levels. The stock has been restored to the Buy Rated list, based on the forecast for 2014 and 2015.
J$ gains on US$, others gain
In Tuesday’s trading the Jamaican currency saw a reduction in the selling rate for the United States currency but a fall in value against the Canadian Dollar and British Pound.
On, dealers bought the equivalent of $29,935,750 versus US$42,467,751 on Monday and sold the equivalent of US$29,376,851 compared to US$33,244,982 sold on Monday. In US dollar trading, dealers bought US$26,382,733 compared to US$37,691,477 on Monday as the buying rate for the US dollar, rose 13 cents to $112.16 and sold US$26,303,408 versus US$31,281,273 on Monday, with the rate falling 6 cents to $112.57.
The Canadian dollar buying rate climbed 30 cents, to $102.54 with dealers buying C$1,033,867 and selling just C$902,104 as the rate rose 2 cents, to $104.84.
The Pound closed at $190.48, for the purchase of £1,454,877, the rate rose 82 cents, while £966,414 was sold, with the rate rising by 70 cents, to $192.84. Other currencies bought, amounted to the equivalent of US$136,925 while selling was the equivalent of just US$577,731.
Highs & Lows| The highest rate for buying the US dollar and the lowest buying rate remained unchanged at $113.10 and $92.02 respectively, but the highest selling rate fell $4.09, to close at $117.91 and the lowest selling rate rose 16 cents to $92.01. The highest buying rate for the Canadian dollar fell by 10 cents, to $105 and the lowest buying rate fell 25 cents, to $83.37, the highest selling rate fell by $1.13 to $107.48 and the lowest settled 30 cents lower at $100.45.
The highest buying rate for the British Pound, was up 45 cents to $194.20, while the lowest buying rate eased by 33 cents to $154.38 and the highest selling rate declined by 43 cents to $199.02, the lowest selling rate was down by 40 cents at $186.
Phillips & Wynter kill inflation in Jamaica
Many Jamaicans may be feeling the negative effect of the economic pressures the country is undergoing. One area in which it is seen, is the official data on inflation as the overall measure of consumer price movements, went virtually nowhere, in June.
Inflation in Jamaica is set to hit the lowest level, in years if the trend for the first six months of the year continues. According to data put out by the Statistical Institute of Jamaica, the inflation rate for June is 0.1 percent, when compared to the index for May 2014. This is 0.9 percentage points lower, than the 1.0 percent recorded for May this year. The lower movement was mainly due, to a decline in the cost of electricity which resulted in the index for the group ‘Electricity, Gas and Other Fuels’ moving down by 4.2 percent. This fall was tempered by an increase of 3.6 percent, due to an increase in the cost of water. Food and Non-Alcoholic Beverages rose by 0.6 percent. Upward movement in the prices of ‘Meat, ‘Milk, Cheese and Eggs’ and ‘Bread and Cereals’ were the chief contributors.
The movement in the index for June 2014 resulted in a calendar year- to-date inflation rate of 2.5 percent.
Mean quarterly inflation rate for the second quarter of 2014 was 1.1 percent, 0.3 percentage points lower than the first quarter which had an inflation rate of 1.4 percent.
Insiders buy into D&G & Sagicor Group
While many investors have shunned the local stock market a few persons close to some of the listed companies are doing the opposite and are buying stocks at severely undervalued prices.
The latest such purchases are for shares in Desnoes and Geddes (D&G) and Sagicor Group. Interestingly, there are close connections between the two, with the chairman of D&G being Richard Byles, the president of Sagicor.
The companies recently reported the trades to the Jamaica Stock Exchange. In the case of D&G’s a director purchased 655,199 shares on June 20, 2014 and July 1, 2014 and an executive purchased 2,274,593 Sagicor Group shares. on July 1, 2014, under the group’s Executive Long Term Incentive Scheme.
Jamaican Teas Orchid unit to open soon
Residents of Yallahs, St Thomas and surrounding areas, will shortly be able to view a model of a new real estate development that has gone on sale in the area. Orchid Estate, Jamaican Teas second real estate development, located in Yallahs, St Thomas, will shortly be opening its model unit for public viewing. The accompanying pictures show units being readied for sale.
According to information gleaned by IC Insider, the model unit will be on display this week end. The units which are priced at $7.9 million comprise 2 bedrooms each. When completed the scheme will encompass 71 units.
Jamaican Teas is a company listed on the junior market of the Jamaican Stock Exchange, that is primarily involved in the processing of teas and other beverages for the Jamaican and export markets, operates of supermarkets and real estate development. It successfully completed its first residential real estate development in 2013, when it built and handed over 19 super studio units to purchasers of its Carmen Court Apartment complex in Kingston.
Cool increased profits at Caribbean Cream
As far back as 2013, IC insider rated Caribbean Cream stock Buy Rated, but it was far too cool for the market who was not buying, they may well change the tune sooner than later as the company is reporting blowout first quarter numbers with profit up 79 percent for the quarter that ends in May.
That is only the start, as IC insider is forecasting earnings to climb to 40 cents for the fiscal year and to rise to 70 cents in 2016. For the year to February this year earnings came out at 11 cents per shares, which was up from 5 cents before. The stock last traded at 70 cents each. As the name suggest the company is in the business of production and sale of ice cream and is listed on the junior stock exchange market.
The improved profit comes against the background of at 19.5 percent revenue increase that was pushed to $252 million, from $211 million in 2013. But it was the performance in gross profit margin that made the huge difference, with a jump of 61 percent to $69 million and was more than adequate to overcome a 58.6 percent jump in administrative, selling and marketing expense that climbed to $47 million, with selling and marketing expense more than doubled. Management indicates that cost associated with the JMA Expo and development cost for the new Kremi advertising campaign, launched at the end of June, helped push cost in this area. The new packaging for the retail products was launched in May, the company reported.
Gross profit margin jumped to 37.8 percent in the quarter from only 25.6 percent in the 2013 period. The improved margin, is a continuation of gains made in the November quarter last year when it climbed to 37 percent. In the November quarter in 2012, the margin was only 24.7 percent and 29.6 percent year to date for the nine months period in 2013. For the year ended February, gross margin was 31 percent, reflecting continued gains in the February quarter.
Growth in sales has slowed and is well down on the growth rate for the February and April quarters, of 48 percent each and 27 percent for the July quarter. Improvement in the plant and new packaging, should help in moving sales to a higher level, than the slower pace over the last three quarters. If this happens then profits should jump even more than the latest figures have.
Capital Spend| During the year to May, capital expenditure amounted to $160 million and was primarily geared to improving efficiency in the factory. The expenditure included commissioning of a new cold room to facilitate holding four times more inventory than before. The next phase will provide for new and larger factory floor and the installation of a new blast freeze equipment that is expected to cut operating cost and spoilage going forward.
Gary Powell KLE director dumps shares
Craig Powell, a director and second largest shareholder in KLE Group dumped part of his holdings in the floundering group, during Friday’s trading on the Jamaica Stock Exchange.
Stocks and Securities acting as brokers, on behalf of the seller and buyer executed the trade at 90 cents each, for the 7,181,043 units that Powell owned. Powell should pocket just under $6,462,938 from the sale, down substantially, from the $26.6 million value placed on it, at the time of the IPO. The amount represents a portion of 10,693,750 that the company’s prospectus said he held prior to the issuing shares to the public in 2012, and now leaves him holding 3,201,343 units. At the time of the IPO, the amount represented 14.64 percent of the total issued shares, after the issue it would have come down to 10.70 percent, the prospectus stated. Powell’s holding after the public issue was second only to Gary Matalon’s holdings of 13.69 percent. At the time of the public issue Usain Bolt’s Sherwood Holdings Limited held 6,757,000 in the company. KLE’s 2013 annual report, lists Sherwood as still owning them.
Who is Powell?| The KLE prospectus list Powell’s credentials as follows: “Non-Executive Director he was appointed September 8th, 2008. Powell has over twenty-four (24) years’ experience in management and event marketing and promotions. Powell’s work experience spans operations management at the Sunset Jamaica Grande Hotel, regional sales and marketing at Amalgamated Distributors Limited and management at Midel Distributors Limited.
Powell also has a wealth of experience in the event-planning and entertainment industry, having been a principal in many of Jamaica’s premier entertainment attractions and events, such as The Appleton Estate All-Jamaica Grill-Off, which is perhaps the only event of its kind in Jamaica.
Powell also has substantial agricultural investments, which includes the production and export of produce and has an interest in Jamaica Hydroponics Ltd., a company that grows and distributes vegetables to hotels and retail outlets. Jamaica Hydroponics Limited owns and operates the largest hydroponics farm in Jamaica.”
KLE Group has been bleeding badly, having made a loss of $56 million in 2013, it followed that up with a loss of $13 million in the March quarter this year, but this was an improvement on the $17 million loss they suffered in the March 2013 period.
Dealers buy US$81m, sold US$77
Image courtesy of Marcus/FreeDigitalPhotos.net
155% profit surge at JNBS
Profit after tax surged 155 percent at Jamaica National Building Society, for the year to March 2014 to reach $2.3 billion from only $908 million in the previous year. The improvement came from revenues of $15.7 billion compared with $14.7 billion in 2013.
The 2013 result was negatively affected by a $830 million hit the group got from the government of Jamaica debt swap, where higher yielding bonds were exchanged for lower yielding ones, leading to a write down of market value of the bonds they held, at the time of the debt swap. But even without such one off charge, profit in 2014 would still have been up by a respectable 25.5 percent. To achieve the results, operating expenses were held to an increase of only 5.8 percent.
At the end of the March, assets climbed by 12.3 percent to $162.46 billion, from $144.6 billion at March 2013. Of the total assets, loans made up just $60 billion or 37 percent. There were mortgages approved but not yet disbursed amounting to $2.685 billion at the end of the year versus $2.344 billion at March 2013. Investment securities made up the bulk of the other assets. Equity capital stood at $26.8 billion and savers deposits at $86.6 billion.
