Company News — Page 153

KLE continued losses push Matalon

November 15, 2013 by IC Insider.com

The loss making KLE Group Limited advised that Joseph M. Matalon has resigned as Director and Chairman of the Board of Directors of the Company with effect on December 15, 2013 and Audrey Marks will assume Chairmanship of the Board of Directors effective the same day.

Joseph M. Matalon has also resigned as Chairman of the Audit Committee with effect from December 15, 2013. Matalon’s resignation from the Audit Committee was in no way related to any disagreement in respect of accounting principles, financial statement disclosure or any other material issue impacting the Audit Committee or its function, the company stated.

The resignation comes against the back drop of the company reporting another quarter of losses, which is worse than the same quarter last year despite the rise in revenues from $82 million in the 2012 quarter to $102 million in 2013. For the September quarter, losses climbed to $12.4 million up from a loss of $1 million in 2012 and for the nine months period the loss is $48 million versus $10.5 million in 2012. For the nine months, revenues climbed from $215 million to $249 million. Compounding the matter is that interest cost climbed to $9.75 million in the latest quarter from $6.58 million last year and $23 million year to date versus nearly $20 million last year.

Matalon, being a board member of Scotia Group, would have most likely paid a major role in the decision to exit the loss making company that in all probability will be struggling to turn things around.

Jamaican Teas raises over $100m

November 14, 2013 by IC Insider.com

Jamaican Teas went to the bond market in October to raise $200 million in an 8.5 percent bond issue. The offer, which closed on November 7, received over 80 applicants for just over J$100 million. The company plans to be employ the proceeds for capital projects. The note is a four year instrument fixed at 8.5 percent per annum for the first two years and variable thereafter.

“I want to congratulate the Stocks & Securities team on another successful offer. This one is significant because we were able to raise the funds needed by the client at a rate of 0.10% below the last GOJ Treasury auction. Jamaican Teas Limited is a strong company and we are happy for the opportunity to work with the organization and bring value to all who participated,” said Lamar Harris, Manager Investment Banking & Attorney-at-law.

Image courtesy of Praiseaeng/FreeDigitalPhotos.net

“I am happy that we were successful in raising over $100 Million in our corporate bond offer. This was achieved in an environment of extreme economic uncertainty when most investors tend to prefer investing for the short term. I feel that an important reason for our success was the decision to list the security on the Junior Stock Exchange so the investors had the confidence of being able to trade the securities if they needed to. I congratulate SSL for their hard work in making this a success.” John Mahfood, CEO.

Jamaican Teas Ltd distributes the renowned Tetley black tea as well as a Premium Blend of black tea, together with Earl Grey black tea, Green Tea, and Peppermint and Chamomile herbal teas. They are also proprietors of the Caribbean Dreams line of products which consists of herbal teas sourced by the company from Jamaica and other sources, as well as drinking cocoa, powdered natural coconut milk and a range of spring water.

Image courtesy of Praiseaeng/FreeDigitalPhotos.net

Filed Under: Company News, General Business News, JSE Main Market, Stock Market Tagged With: Corporate Bonds, Jamaican Teas, JSE Company

Lasco Financial profit rise

November 13, 2013 by IC Insider.com

Profit at Lasco Financial climbed faster in the September quarter than in the June quarter reaching $50 million, well ahead of the $31 million earned in 2012 by 64 percent and the $39 million earned in the first quarter of this fiscal year. For the year to date, profit is up to $90 million from $57 million in 2012 by 57 percent. The strong improvement in the bottom line flows from revenues that increased by 46 percent to $303 million for the six months to September over 2012, and 43 percent in the September quarter to $159 million.

The company keeps on totting up the quarterly profits as volume of business keeps on growing with some help from the slippage in value of the Jamaican dollar. Robust growth in profit was recorded in the last fiscal year to March of $164 million compared to $102 million, a 60 percent increase. The strong gain in profit achieved in 2012, up by 244 percent, was helped partially by a revaluation surplus on investment property that was booked in 2011.

Growth in 2013 is helped by the acquisition of cambio and money transfer business from Supreme Ventures. As the company grows in size, the growth rate has slowed but the results to date indicate are that the level seen last fiscal year should continue for the current fiscal year.

Expenses up | Expenses have grown steeply with selling and marketing ahead of revenues with a 55 percent increase for the quarter and 57 percent for the six months. Administrative costs are up, well below revenue growth with the September quarter up 19 percent and year to date 26 percent.

The company is now in the major period for earnings when remittances rise ahead of the Christmas season, which is expected to push profit well above what has been earned in any of the two quarters so far.

“The increase in income is a result of the growth in the remittance business due to additions of key partners and ongoing promotions,” management stated in their release to shareholders.

IC Insiders forecast is for earnings to be around $250 million or 20 cents per share for the full year.

Marketing | Management indicated when they released the June quarter figures “that Lasco Financial has commenced significant investments in marketing activities, which are expected to capture even more substantial market share for our remittance division; the outcome of which will also yield growth opportunities in the Currency Trading division. This is noticeable in our selling and promotion expenses which saw a 58 percent increase, up from $36.3 Million in the previous period to $57.6M. Administrative and other expenses rose in the quarter to $47.6 million up 33.7 percent over the same period of 2012.”

The company’s subsidiary Lasco Financial Services (Barbados) Limited and its agent Unicomer Barbados Limited (Courts) began trading in May 2013. Lasco indicates that this business is now at a breakeven level.

Growth | Total assets amounted to just $47 million in 2010 but has enjoyed rapid growth and is at $661 million at the end of September this year, still a small financial company in the local market with room to grow. Loans advanced was nil at the end of 2011 and is now close to $100 million at the end of March this year and is expected to grow at about 30 percent for the year. Loans and receivables rose to $335 million at the end of June up from $237 million at the end of June last year, is down to $261 million at September. Cash also increased and is now at $282 million compared to $136 million at the same period in 2012. Equity stood at $564 million and is expected to increase as profits roll in.

Lasco Financial is an IC Insider Buy Rated stock.

Related posts | LASCO Financial small but tallawah | Buy Rated bargains

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

Big profit jump at Purity

November 12, 2013 by IC Insider.com

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Profit more than tripled before taxes at Consolidated Bakeries (Purity) and was up more than 400 percent after factoring taxation in the 2012 period to September, as profit after tax rose to $30.4 million up from $5.7 million, a 429 percent increase. For the September quarter, profit rose to $6 million compared to the 2012 quarter when the company reported a loss of $2.8 million.

The improved numbers did not show up in the quarter over quarter results as profit was lower than the $10 million earned in the June quarter. Some of the improvement is a recovery from a bad period in 2012. The second half of 2012, the year Consolidated went public, was not a good one as the company recorded a loss in the period compared to a profit in the 2011 period.

Revenue for the nine month period increased by 37.6 percent to reach $500 million compared to revenue of $363 million for the same period in 2012. For the quarter, revenue is up by 53.2 percent over the same period in 2012 to reach $172 million up from $112 million. “These increases represent growth in both unit sales and average sales per customer. During the quarter under review, input cost increased due to exchange rate movements and other factors,” management stated in their report to shareholders. Gross profit margin came in at 49 percent for the quarter down from 53 percent in 2012 and is 54 percent year to date, an improvement over the 52 percent enjoyed in 2012.

It looks as if the company will enjoy profits in the order of $35-40 million for the year or earnings per share around 20 cents. The company is focusing on improved efficiency, increased sales from existing products and new ones for both the local and export markets.

Cash funds and investments are up to $99 million from $24 million last year September and $98 million at the end of December. Current assets are up to $205 million from $184 million at the end of 2012 helped by increased receivables and inventories which grew $40 million year over year. At the same time, current liabilities are down as a result of the clearing of overdraft balance of $13 million and taxation of $9 million leaving $61 million as owing to third parties. Borrowing is up from $19 million to $49 million at the end of September this year versus last year September.

Filed Under: Company News, Company Results Tagged With: Consolidated Bakeries, JSE Company, Purity

Buy Rated bargains

November 11, 2013 by IC Insider.com

Monday, 11th November 2013 | The stock market in Trinidad continues to maintain most of the gains registered for our Buy Rated selection with only 3 negative movements so far and 8 registering some gains ranging from 3 percent to 120 percent with one that has not mowed.

Our Jamaica Stock Market selections have not fared as well with most registering declines to date but they still remain attractive buys. In fact, a number have become even better buys now than when we selected them. Remember that the greater the fall in price, the better the chance of success if investors buy in at the low prices.

Related posts | Carib Cement & AMP now Buy Rated

The IC Insider’s Buy Rated seal of approval is given to a stock that we believe is a compelling buy with earnings that are strong relative to the price and strong prospects of generating high price gains within the next twelve months.

Our research is backed by published reports of the company’s performance and insights of future earnings that can be found at ICInsider.com. The final decision to buy, or not, is your personal choice.

To find published reports for a Buy Rated stock on IC Insider, please choose the category ‘Buy Rated’ under Company News or enter the company name, in full or part at ‘Search IC Insider’.

Filed Under: Company News, JSE Main Market, Stock Market, TTSE Market Tagged With: JSE Company, TTSE

Carib Cement turns profit

November 11, 2013 by IC Insider.com

Aggressive pricing and increased cement sales helped Carib Cement Company turn a big loss last year into a profit this year. For the quarter ending September, profit jumped to $169 million, a marked change from a $245 million loss in the similar quarter of 2012.

For the nine months, profit was only $32 million reflecting a very poor first quarter resulting from a loss incurred along with a big foreign exchange loss of $689 million and interest of $349 million. The nine month figures may not appear great, but when viewed against a mammoth loss of $1.45 billion in the same period in 2012, the extent of the about turn is vivid.

Admittedly, the parent company had to step in to restructure loans that were lent to Carib Cement and were choking them, thus cutting interest cost. Revenues climbed 50 percent to reach $3.2 billion in the quarter and $8.89 billion for the nine months, an increase of 30 percent. The improvement flowed from increased volume of cement and clinker sales which accelerated in the third quarter by 34 percent over the 2012 quarter. For the year to date, volume sales climbed 7.6 percent, as exports declined in the 2013 nine months period. Export sales rose in the latest quarter by 44 percent and local sales by 19 percent, year to date it is up by only 10 percent.

Price increases | Since last year, the company has increased the price of its product on a number of occasions. In January, cement prices increased by 16.5 percent on average, 3 percent in April, 1 percent in July and in October, a 2.7 percent increase, which was on top of a 9.2 percent increase in July last year.

The full 2013 results should come out to be in the order of 20-25 cents per share if all goes well, but it’s the 2014 numbers investors should be focusing on from now as it looks like earnings could well be in the 80 cents per share range, which would see a big hike in the stock price. The situation could get even better if some of the major infrastructure works that have been announced come on stream along with any pick up in the housing market.

All this is why IC Insider has now upgraded the stock to Buy Rated. There are still risks involved. Cement plants are notorious for bad news flowing from accidents or other major setbacks, as is the case in the company parent Trinidad Cement. The company seemed to have been doing very well only to be hit by problems in the factory, as well as in Barbados, and just barely reported a profit in the September quarter. While the company has depended on Trinidad Cement to bank roll it, the group is under strict dictates of its lenders.

Balance sheet | End of the period cash funds were down to $149 million from $244 million at the end of December last year. This needs to be rebuilt to reasonable levels to provide for smooth operations and for the company to be able to ride out any storm they may encounter.

Even if the company was able to continue the profits levels seen in the third quarter, it is going to take about 7 to 8 years for them to wipe out the huge accumulated loss of $7.5 billion and be in a position to start paying dividends again. It may well happen before that time frame due to the likely impact of inflation in driving up profits in the years ahead and, if the Jamaican economy starts to grow at a reasonable pace, sales of cement could surge and boost profits.

Both Trinidad Cement Limited (TCL) and Caribbean Cement Company are IC Insider Buy Rated stock.

Filed Under: Company News, Company Results Tagged With: Caribbean Cement, JSE Company

Carib Cement & AMG now Buy Rated

November 11, 2013 by IC Insider.com

Monday, 11th November 2013 | We added two new stocks to the Buy Rated list based on the information emanating from their latest quarterly results.

Caribbean Cement underwent major changes to its finances with the parent company, Trinidad Cement, restructuring the debt by converting it to preference shares thus cutting cost of financing. Revenues have also climbed with increased prices and volume sales.

AMG Packaging sales are growing in double digits and was up 37 percent in the quarter ending August. A new, multi-functional machine is in the factory and expected to be in production in December and will replace older manual ones and a rotary die cut machine. Management states that the new machine will allow for automation of the processes. This will make for more efficiency in the production process and allow for increased production and sales to meet demand. The company is expecting significant reduction in overtime and energy costs as a result of the new machine.

About Buy Rated stocks | The IC Insider’s Buy Rated seal of approval is given to a stock that we believe is a compelling buy with earnings that are strong relative to the price and strong prospects of generating high price gains within the next twelve months.

Filed Under: Company News, JSE Main Market, Stock Market, TTSE Market Tagged With: JSE Company, TTSE

Caribbean Producers’ impressive profit

November 11, 2013 by IC Insider.com

When Caribbean Producers pitched their vision of an impressive future, many investors saw a new rising star on the horizon coming from the west and the company easily raised $425 million. The shares were heavily oversubscribed and shot up as high as $3 but reported results never met the hyped expectations.

All that has now changed with the latest quarterly results to September showing a 19 percent jump in revenues and a big turnaround for CPJ in the first quarter of the 2014 fiscal year which ends in June. From a loss of US$172,981 in the 2012 quarter, the company swung into a profit of US$447,421. IC Insider projects the company should pull in profits for the full year of US$8 million, around J$0.80 per share. However, the market’s lackluster reaction to the robust results leaves one searching for reasons why CPJ is not pleasing to investors’ palates.

Cost control | Although sales rose strongly from US$14 million to US$17 million contributing to the big improvement in profit, a major factor is the improved profit margin that rose from 37 percent in 2012 to 44 percent in the latest quarter helping to increase gross profit by a strong 35 percent. Also contributing is the maintenance of other cost increases to levels below or just above revenue growth as well as a turnaround of other operating activity from a loss of US$48,000 to a surplus of US$7,041. Selling and administrative cost rose 20 percent, a shade over the rise in revenues. Depreciation increased faster than sales, at 27 percent to reach US$435,500 but finance cost rose by just 7 percent to US$476,664.

The numbers suggest that the expansion into meat and juice processing is now bearing fruit and should get even better as they capture more market share with their new products.

Borrowings | The company took on a large amount of debt to help fund its expansion with borrowings at US$29 million at the end of September and equity of US$13.5 million, which was quite a risky financing arrangement. Since September 2012, loans have been used to fund a US$3 million increase in inventories and receivables and US$1.6 million increase in plant and machinery.

Positive cash | The good news is that in the latest quarter, there was a strong positive cash inflow of more than US$900,000 which should end up around US$10 million by the end of the fiscal year. That will be enough, coupled with cash now on hand of US$2.7 million, to meet loan payment of US$8.6 million due by June next year and US$9.5 million due in the next twelve months.

If the forecasted cash inflows materialise, equity would jump to US$21 million and borrowed funds should fall in line with equity, subject to funds being used in further expansion by the financial year end.

The company’s working capital is in very good shape with slightly more than 2 to 1 ratio, a situation that should improve as loans are reduced.

The company will begin operations in St. Lucia in 2013 with a well-established partner in the Eastern Caribbean. The new company, CPJ St. Lucia, will primarily focus on setting up beverage system programmes for the hotel sector on the island.

Insider call | IC insider is not only forecasting continued strong growth for this new fiscal year but a continuation into the next year as well, making the stock a good medium term investment. Caribbean Producers Jamaica Limited is an IC Insider Buy Rated stock.

Filed Under: Company News, Company Results Tagged With: Caribbean Producers (CPJ), JSE Company

LASCO manufactures more profits

November 11, 2013 by IC Insider.com

Profit rose 15.5 percent for Lasco Manufacturing in the September quarter over the similar period of 2012 to reach $176.4 million versus $152.7 million. This reflects an improvement over the results in the first quarter, which when combined with the second quarter results, amounted to $315.2 million compared to $306.3 million for the same period last year, an increase of $8.9 million or 2.9 percent. The company had taken a $40 million hit in custom duties for spoilt raw material in the first quarter that occurred during the 2013 fiscal year.

The improved profit for the latest quarter came about primarily due to a rise in revenue, from $958 million in 2012 to $1.03 billion in 2013, an increase of 10.75 percent and far stronger than the year-to-date performance of 4.6 percent increase to $1.88 billion up from $1.79 billion to September last year. Gross profit for the six months rose from $502.4 million to $526.2 million, an increase of $23.8 million or 4.7 percent. For the quarter to date, gross profit rose margin declined a bit as evidenced by the by slower growth in gross profit of $18.5 million or 7.2 percent, which is below the growth in revenues. “The company was able to mitigate the effects of foreign exchange volatility by making early payments to foreign suppliers” management stated in their release with the results.

Operating expenses for the six months to September 2013 rose by a mere 2.2 percent or $4.5 million over the prior year’s $200 million to move to $205 million in 2013. For the quarter, operating expenses was just $97 million, a reduction compared to $108 million in prior year.

Improved cash management has resulted in a reduction in the finance cost of $7.2 million over prior year’s $13.8 million in 2012, compared to $6.7 million in 2013.

The new factory is expected to come into production during this month starting with liquid products of water and juices. The powder products factory will come into operation in 2014. The company was allowed to add interest on it $1 billion plus loan to the cost of the plant but once it’s in operation, interest and depreciation will be expensed and this could have a drag on profits for awhile until sales from the new plant can cover fixed cost.

Financial position | The company increased amounts tied up in inventories sharply to $664 million up from $283 million last year September and $490 million in March as trade and other receivables grew to $881 million from $710 in September last year and $629 in March this year. Trade and Other Payables have also gone up with the amount standing at $699 million from $481 last year and just $259 in March. Long Term Debt used in the expansion is now $1.37 billion versus $350,000 in 2012 and $804 million in March. The rate on the loan is under 9 percent.

The future | The real excitement about Lasco Manufacturing is the major expansion of the factory operations and the relocation of some of its activities that should reduce cost while expanding the products to be produced. This should translate into strong revenues and profits going forward, more likely in the next fiscal year which starts in April next year.

IC Insider is projecting earnings of 17 cents per share for the year ending in March 2014 and 30 cents for the following year with the new factory in full operation.

Lasco Manufacturing is an IC Insider Buy Rated Stock.

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

Profit inches up at D&G

November 5, 2013 by IC Insider.com

Desnoes & Geddes, the brewers of Red Stripe beer is reporting moderate growth in after tax profits, moving by 8 percent to $368 million from $340 million in 2012. Sales barely grew from $3.1 billion to $3.28 billion in a quarter when local sales were up 14 percent to $2.8 billion and exports were down from $643 million to $465 million with the shift of the production of beer to USA.

The company spent less on marketing, $266 million versus $313 million in the 2012 quarter while general selling and administrative expenses declined to $288 million from $310 million due most likely to the transfer of this side of the operations to Celebrated Brands, their joint venture distribution arm. The transfer may also have impacted the dollar value of sales. Other income turned a loss of $8 million compared to a surplus of $59 million in 2012. On the other hand D&G’s share in the joint venture distribution was a positive $19 million.

Segment results | In spite of the climb in local sales and a decrease in marketing spend, segments results show profit for the local operation was flat at $553 million while exports rose from $210 million to $283 million.

Financial Position | At the end of the quarter, the company has cash of $1.38 billion but receivables jumped to $1.9 billion from $739 million in 2012; things in this area would look a lot better. The company’s reduced funds tied up in inventories from $1.36 billion to just over a billion at the end of September. D&G has no interest bearing debt with equity capital of $8 billion.

D&G dominates the beer market in Jamaica and a lot of sales have been lost over the last several years as governments placed increased taxation on the products it sells. This along with a sluggish economy has held back its growth in profits and by extension the stock price. In the short turn, the company has had to resort to various cost reduction measures to help improve the bottom line. The September quarterly figures suggest that the company needs a Jamaican economy recovery in order to start delivering decent growth in profits. Nevertheless, the rate of return on equity is around 20 percent, which is not that shabby.