Trinidad’s West Indian Tobacco company profit jumped 23.5 percent in the June quarter, to hit $127 million as revenues climbed by a smaller 15 percent, to $324 million.
For the six months to June, profit is up to $224 million from $188 million, a 19 percent spurt, from revenues of $590 million versus $556 million in 2013. For the year to June, distribution, administrative and other cost were flat at $72 million, but corporate taxes was up to $73 million from $66 million. Earnings per share came in at $1.50 for the quarter and $2.65 for the half year. Earnings for the full year to December should reach $5.70 per share. The stock last traded for $118 in Trinidad putting the PE at 21. Witco will pay a dividend of $1.20 for the June quarter and $2.18 for the six months, an increase over the payments last year of $1.04 and $186 respectively.
West Indian Tobacco is listed on the Trinidad Stock Exchange and is a subsidiary of British American Tobacco, it is a fellow subsidiary of Carreras in Jamaica to whom it is the major supplier of cigarettes.
Witco has no borrowed debt but has shareholders’ equity of $284 million and cash funds of $191 million at the end of June. All currency are in T&T dollars.
WITCO Q2 profit jumps 23.5%
Dividend from Montego Freeport
Montego Freeport plans on paying a dividend of 10 cents per share in the form of a capital distribution, on September 12, to members on the register at August 24. The payment is subject to approval by members, at the company’s annual general meeting to be held on August 21.
More than $2 is still left to be paid over to shareholders, when the company which is slated for liquidation is wound up. Montego Freeport reported profit of $12 million for the year to March this year and $28.9 million in 2013. The bulk of the income came from gain on sale of property. An amount of $23 million was written off as a result in a fall in value property, held for resale and booked in 2014, based on the price obtained for the sale of some of the lots compared to the value booked previously.
The directors’ report to shareholders, indicates that all lots have been sold, but the sale of a few of them have not been closed. At the end of March 2014, Freeport had net assets on its book of $1.39 billion or $2.47 per share and cash funds amounting to $491 million or 87 cents per share. There was $843 million due in receivables, $794 million of it represents amounts held in escrow, relating to funds received on the sale of property and assets held for sale amounting to $620 million. Amounts due to creditors and shareholders amount to $620 million, $527 million of it represents deposits on the sale of land.
Montego Freeport was previously listed on the Jamaica Stock Exchange but was delisted in January 2012, after the company’s shareholders voted in 2011 to have it delisted.
Derrimon largest owners of Caribbean Flavours
Derrimon Trading Company Limited (Derrimon) acquired 49% of the issued shares of Caribbean Flavours and Fragrances (CFF) from its previous majority owners, Anand and Joan James.
The share transfers of two blocks of 22,030,408 shares each, were executed through the Jamaica Stock Exchange on August 5, to effect the transfer to Derrimon for J$121,167,244, at $2.75 per share. Mayberry Investments acted as the investment banker to the deal on behalf of Derrimon.
Established in 1998, Derrimon is now a major distributor of consumer goods to supermarkets and wholesalers island-wide as well as supermarket operators.
“We are looking forward to working with Anand James, who remains as Managing Director of CFF, to expand on the synergies provided by this unique business. We believe that this investment will also assist us to reach the next level in our evolution.” CEO and majority shareholder of Derrimon Derrick Cotterell said.
CFF is engaged in the manufacture and distribution of flavourings and water soluble colourings for the food, beverage, baking, confectionary and pharmaceutical industries. The Company also manufactures and supplies fragrances, which are used in production of household cleaning, body car, aroma therapy and air freshener products. The Company supplies its products predominantly to commercial concerns in Jamaica, and exports to Caricom countries including Trinidad, Barbados, Guyana, and St. Kitts.
Managing Director of CFF Anand James said “I am very pleased with the progress of CFF since its listing on the Junior Market last September. Less than one year later, the listing has assisted me to identify a
long term strategic partner who shares my values and overall strategic focus.”
The deal will result in some changes to the board of directors of CFF, which will now comprise two
executive directors from each of the two companies. The three non‐executive directors as well as CFF’s
mentor will remain unchanged.
Dividend for Lasco Financial Shareholders
Lasco Financial Services advised that an interim Dividend of 3 cents per stock will be paid on September 2, 2014 to shareholders on record at August 21.
The X-dividend date is set for August 19, 2014. The company last paid a dividend of 30 cents per share on March 8, last year, prior to a 10 for 1 split of the stock.
Jamaica’s NIR passes US$2b
Jamaica’s Net International Reserves (NIR) now exceeds US$2 billion as it sits at US$2.18 billion, up by US$805 million during July. The increase reflects the US$800 million bond, the government raised recently on the international market.
The gross amount of the reserves is US$2.8 billion, up by US$793 million during July, of this amount US$606 million is due to the International Monetary Fund (IMF) and represents primarily, funds obtained from the IMF for liquidity support for the financial system, when the JLP government undertook the first debt exchange, back in 2010.
Reserves of Goods Imports amount to 28.13 weeks and 20.30 weeks of Rreserves of Goods & Services Imports.
Paramount’s Q4 profit jumps 108%
Paramount Trading’s profit after tax jumps 108 percent in the May quarter, on a pretax basis, it was up 73 percent while revenues came in at just 5 percent higher, for the quarter.
Profit in the May quarter after tax is $43.6 million compared with $21 million for the similar 2013 period. The improved results for the company’s final fiscal quarter, came from revenues of $199 million versus $189.6 million in 2013. The final quarter numbers are a marked improvement over those for the February quarter, when only $14.6 million in profit was reported form sales of $181 million. For the full year, Revenues amounted to $720 million from $682 million in 2013. The 2013 numbers were boosted by one off income from the amalgamation of the trucking operation – Stamina Trucking and cancelation of related party debt amounting to $21 million, this also swelled the profit by a similar amount. In 2013 the Paramount incurred taxes on profit amounting to $10 million but in 2014 there was a tax credit of $425,000.
Noticeable, was a fall in administrative cost, from $35 million in the February quarter, to only $23 million in the final quarter. Gross profit margin climbed in the three months to May to 50 percent from 49 percent in the February quarter, compared to 47.7 percent for the full 12 months. The improvement in the profit margin is a welcoming development, especially as sales have not been growing at a fast pace.
Profit is projected to come in around $125 million in 2014/15 year or around 80 cents per share from current operations. At the current price of $2.70 the stock would be priced at a PE of only 3.4 making it a buy bearing in mind that that many junior listings have been valued around 8 times earnings.
Financials| The company earned an average rate of return of 29.7 percent, on the equity of $345 million at the end of May. Borrowed funds amounted to only $52 million compared to the level of equity. Cash stands at $56 million while receivables climbed to $172 million from $146 million, a much faster pace than the increase in sales. Inventory is at $203 million and increase form $172 million at May 2013, but payables moved up from $110 million to $128 million over the same period. Inventory levels may be on the high side as a protection against the devaluation of the Jamaican dollar, the same would not be true for the increased receivables.
Grace & JPS paying shareholders
Grace Kennedy approved an interim dividend of 78 cents per stock, to be paid on September 30 to stockholders on record of September 12, the EX dividend date is September 10, 2014.
An interim dividend of 70 cents per share was paid on April 30, this year. A third dividend is expected to be paid later in the year, in keeping with the company’s policy of making three payments per annum.
Jamaica Public Service approved a Class F preference share a dividend of US$1,137,653 or 0.463287757 per stock, to be paid on August 15, 2014, to stockholders registered at the close of business on August 4, out of retained earnings. The EX-dividend date is July 30, 2014.
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Pan Jam & Cargo Handler considering dividends
Pan-Jamaican Investment Trust will consider the payment of a third interim dividend for the year 2014 at a meeting scheduled for August 12, 2014.
Interim dividends of 60 cents per share was paid on June 20 and on March 31, this year.
Cargo Handlers advised that at a meeting scheduled for August 12, 2014, the Directors will consider the payment of an interim dividend for 2014. Previously, Cargo Handlers paid a dividend of 50 cents per share on March 6, this year. In 2013, the company paid a dividend of $1 per share on March 28, 2013.
Caribbean Flavours dominates trade
In Tuesday’s trading on the Jamaica Stock Exchange, the prices of 10 stocks rose and 9 declined as 29 securities changed hands, resulting in 48,146,012 shares trading, valued at $138,990,317. Junior market, Caribbean Flavours with 44,078,122 units trading, valued at $121,212,820, was the dominant trade although there were only 4 different sets of trades in the stock with two of 22 million shares each.
Main 
Market| The JSE Market Index fell by 420.68 points to 72,048.37 and the JSE All Jamaican Composite index dropped 470.39 points, to close to 79,271.36.
Gains| Stocks with gains, volume and last traded prices at the close of the main market, are Cable & Wireless with 3,108,389 shares, as the price gained 4 to close at 34 cents, Carreras with 259,900 shares changing hands, closed 50 cents higher at $34.50, Grace Kennedy 69,691 shares traded with an increase of $2.50 to $59, Pan Jamaican Investment with 100 units gained 6 cents and ended at $48.08 and Scotia Investments had 26,885 shares traded, with a gain of 60 cents t0 $20.60.
Firm| The stocks with volume and last traded prices in the main market to close without a change in price, are Caribbean Cement with 100 shares closing at $2.50, Jamaica Broilers with 9,655 shares to close at $4.57, Jamaica Money Market Brokers with 20,629 ordinary shares at $7, Jamaica Producers 2,593 shares at $17.50, Mayberry Investments 1,020 units at $1.55 and Proven Investments 5,366 US dollar ordinary share, at 18 US cents.
Declines| The stocks with losses, volume and last traded prices, at the end of trading in the main market, are Berger Paints with 3,500 in losing a cent to end at $1.65, National Commercial Bank with 25,622 shares, lost 14 cents to $18.26, Sagicor Group, lost a cent in trading 4,473 shares at $9.25, Sagicor Real Estate Fund saw 115,150 shares changing hands, with a 15 cents fall to $6.50, Scotia Group shed 50 cents while trading 15,522 units at $19 and Supreme Ventures with 96,198 shares lost 20 cents to end at $1.75, for a new 52 weeks’ low.
Preference| Jamaica Money Market Brokers 8.75% preference share traded 23,413 units with the price unchanged at $3.
Junior Market| The JSE Junior Market Index gained 15.28 points to close at 624.72 as 10 stocks traded, with 5 advancing and 3 declining.
Gains| Stocks recording gains at the end of trading in the junior market, are Access Financial with 4,722 shares, the price gained $1.03 to $10, Caribbean Flavours traded, 44,078,122 units and closed at $2.75, while gaining 30 cents in the process. Lasco Distributors with 48,000 shares, gained 4 cents to $1.05, Lasco Financial traded 54,700 units at 3 cents higher at 93 cents and Lasco Manufacturing with 38,000 units, was up 6 cents to 86 cents.
Firm Trades| Stocks in the junior market that traded to close at the same price as the day before, are Cargo Handlers with 2,312 shares at $14 and General Accident with 3,050 shares at $1.35.
Declines| Stocks declining in the junior market at the end of trading, are Blue Power with 5,000 units as the price lost 5 cent to $9.05, Caribbean Producers with 1,500 shares, with a 7 cents drop, to $2.38 and Dolphin Cove with 4,000 shares, as it shed 85 cents to $7.55.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 12 stocks with bids higher than their last selling prices and 6 stocks with offers that were lower.
Lasco Distributors disappoints, major expansion coming
Lasco Distributors reported disappointing results for the first quarter, for the 2015 financial year to June, with revenues crawling up 4 percent to $2.4 billion and profit dropping 45 percent to $91 million from $164 million in 2013.
Lascelles Chin Chairman of the company however, indicated to IC Insider that the company will be embarking on a major expansion which will include increased warehouse space to accommodate distribution of new products. Chin indicated that “the funds from winning the legal case against Pfizer Limited, will play an important role in funding the expansion”. The proceeds is expected to exceed well over J$1 billion. Already “Lasco have acquired a warehouse at a reduced price to what it originally cost to be assembled in Jamaica” Chin Indicated.
This June quarter performance is after the company took on the Salada Foods distribution. Margins on goods sold declined badly to 22.67 percent from 25 percent, while operating cost climbed by 20 percent from $302 million to $361 million. Earnings per share came in at 0.27 cents versus 0.49 cents in 2013.
“We planned for increased staff strength and marketing activities in preparation for pending new product rollouts. The current business environment with a devaluing dollar impacts the trade as there are continuous increases in prices and lower consumer spending power. The company continues to deploy measures to mitigate effects of the volatile market conditions and at the same time maintain its market positioning to provide overall value for consumers.
We continue to build our core portfolio and have several new products in the pipeline to ensure long term growth and profitability,” Peter M. Chin, Managing Director reported to shareholders.
Chin went on to state “total assets grew by 30 percent to $4.288 billion compared to $3.308 billion in the corresponding period last year. Property, plant and equipment grew by 59.7 percent to $313 million. This is primarily due to increased capacity and improvements in work flow processes in the distribution centres in preparation for new product launches.
Inventories increased by $331 million to $1.31 billion and this is mainly due additional inventory from new business agreements. Short Term Deposits increased by $80 million to $552 million and Cash and Bank Balances decreased to $285 million from $496 million. Trade and Other Receivables was at $1.598 billion, an increase of $400 million over the prior year. We continued with the arrangements to extend credit terms to our key institutions. There was also a related increase in Trade and Other Payables, an increase of $570 million to $1.76 billion.”
The company may have had a bad quarter but with plans for expansion and new products to be launched investors may want to be taking a look at the stock now that it’s been hit down to a low level with a view of benefitting when the profits rebound with additional sales to come from new products.