Trans Jamaica & Wigton can’t compute EPS

May 14, 2020 by

This is proving to be very embarrassing; accountants unable to compute earnings per share (EPS) properly for companies issuing additional shares. A number of listed companies have been releasing quarterly and audited results with the wrong calculations for earnings per share.
Trans Jamaica, the latest company, to be divested by the Government of Jamaica, reported a profit for the quarter to March of US$2.27 million but only the application of a tax credit of US$3.77 million saved it from a loss for the quarter. Revenues for the quarter were $12.96 million, up from $12.79 million in 2019, but after incurring $5.6 million in interest cost they ended with a pretax loss of US$1.5 million. In the 2019 March quarter, they barely eked out a profit of $1.58 million but that was only after crediting US$1.234 million in shareholders’ grant that ended at the end of 2019. The company’s reported EPS are all wrong.
Interestingly, Trans Jamaica’s top 10 shareholdings, make for interesting reading. Others are NROCC with 2.5 billion shares and JMMB Group with 763 million units, NCB Group and connected entities dominate the top 10. Interestingly, the National Investment Fund, which acquired a large portion of Wigton Windfarm shares, is nowhere on the top 100 listings for Trans Jamaica shareholders.
For the December quarter, Wigton Windfarm reported the earnings per share for the December 2018 quarter as $56,701. That, of course, is completely incorrect.

Wigton closed at anew high of $1

Wigton posted a loss in the December 2019 quarter.

The company stated in the quarterly, “the average number of shares was 10,000 units”, and at the same time, they stated that 10,999,990,000 shares were added, in May 2019. In reality, no shares were added as the existing stocks were split to become 11 billion units. This is what the prospectus stated, “in anticipation of this Offer for Sale PCJ as sole shareholder adopted the following resolution in writing on April 3, 2019, with respect to the Company; namely (a) sub-dividing the Company’s 10,000 ordinary shares into 11,000,000,000 ordinary shares.”  That change required that 2018 and all prior years’ earnings, must use 11 billion shares to compute the company’s earnings per share. Wigton’s June to December quarterly reports published for 2019 are all incorrect and require revisions, as the incorrect information is still on the Jamaica Stock Exchange’s website.
The latest company to run foul-up this rule is Trans Jamaica Highway. The company, in its first report to the Jamaica Stock Exchange, reported EPS of 0.02 US cents for the March quarter, 5.8 US cents for the 2019 quarter and 30.7 cents for the year to December last year— all of which are incorrect. A note accompanying the share capital of the quarterly to March states. “On January 22, 2020, an extraordinary shareholders’ meeting passed a resolution to restructure the authorized share capital pursuant to section 65(1)(d) of the Companies Act, 2004, in anticipation of NROCC completing an initial public offering on the main market of the Jamaica Stock Exchange. Pursuant to this resolution, the Company’s share capital was restructured by dividing each of the 27 million existing ordinary shares to create 12.5 billion ordinary shares.”
As is the case for Wigton, the total number of shares now issued must be used to properly compute EPS for all three periods included in the quarterly report.
Limners and Bards, in releasing their audited accounts, made the same mistake that was quickly corrected after IC Insider.com brought the matter to the public.

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

Profit jumps 71% at Mailpac

May 12, 2020 by

A big 33 percent surge in revenues, pushed profit at the late 2019 Junior Market listing, Mailpac Group, up an impressive 71 percent compared with what the business delivered in the March quarter last year. MailPac Group was formed late in 2019 and acquired Mailpac Services Limited and Mailpac Local Limited from Norbrook Equity Partners, majority shareholders, for the purpose of amalgamating both logistics platforms into one operating business.
For the March 2020 quarter, revenues hit $365 million, up from $274 million in 2019 while profit jumped to $102 million from $60 million in 2019. The revenue performance is stunning, having exceeded the $362 million generated in the busy fourth quarter last year with the usual strong Christmas demand.
Historically, the company enjoyed growth in revenues of 12.2 percent in 2017 and 25.7 percent in 2018. Revenues increased by 28.8 percent for the first half of 2019, with the full year rising 25 percent.
Before the acquisition, the businesses in 2018, revenues grew from $851 to $969 million in the first three-quarters of 2019. Net income for the periods was $213 million and $203 million, respectively.
Improvement in profit margin remains consistent at an attractive 50 percent in the March 2020 quarter.

Mailpac CEO Khary Robinson.

Administrative expenses declined from $71 million in 2019 to $67 million in the latest quarter. Marketing and sales expenses declined marginally from $10 million to $9.9 million, despite the sharp rise in revenues. Finance and depreciation charges were modest. The company added to the fleet of vehicles after the quarter and this will result in a pickup in depreciation charges for the rest of the year.
The company generated $92 million in cash inflows, lifting cash at the end of the period to $194 million. At the end of March, shareholders’ equity stands at $456 million, with borrowings at just $25 million. Net current assets ended the period at $165 million, well over Payables of $72 million.
“We have substantially expanded our delivery infrastructure and have employed various in-store strategies to limit person to person contact”, Khary Robinson, the Executive Chairman, stated in his report accompanying the quarterly.
Earnings per share came out at 4 cents for the quarter and IC Insider.com projecting earnings of approximately 25 cents per share at the end of the fiscal year to December. The stock traded at $1.69 on the Junior Market of the Jamaica Stock Exchange at a PE ratio of 7 times 2020 earnings, and is heading to the $3 region during 2020.

Filed Under: Buy Rated, Company News, Company Results

Q3 profit rises at Knutsford Express

May 9, 2020 by

Knutsford Express (KEX) profit rose in the company’s fiscal third quarter, but that was before the coronavirus hit the country and disrupted business and social activities in March.
Net profit at Knutsford Express climbed 7 percent in the February quarter to $36.4 million from just under $34 million for the corresponding period in 2019. For the nine months to February, profits fell sharply by 35 percent to $103 million from $158 million for the comparative period in 2019. Losses in the new operation in Florida negatively affected profit, with the segment bringing in revenues of $20.6 million for the three quarters, but lost $26 million. The new operation generated $8 million in revenues for the February quarter, an improvement over the $7.2 million generated in the July quarter and much more than in the November period. The loss in the latest quarter was down by $1.2 million at $8 million in February compared to July. The numbers suggest that it will take another two to three years or the Floridian operations to breakeven.
Revenue rose 11 percent to $318 million from $287 million for the KEX’s third quarter. It was up 10 percent for the nine months ending February to $925 million, from $842 million for the similar period in 2019.
Unlike other listed companies, KEX refuses to break out operating expenses from other expenses, making it difficult for investors to get a better understanding of the company’s performance. Operating and Administrative costs rose 9 percent to $272 million for the third quarter and 19 percent in the nine months to $797 million, in comparison to the corresponding periods for the last fiscal year. Finance cost increased in the quarter, to $7 million from $6.5 million in 2019, but declined from $22 million to $20 million for the nine months.

Knutsford’s New Kingston depot

Cash inflow from operations was $190 million to February. The acquisition of fixed assets of $228 million used up the inflows and resulted in cash funds at the end of the previous year was used to help fund the purchases. Cash and bank balances moved from $120 million at the end of February 2019 to $96 million this year. Shareholders’ equity ended at $845 million, with borrowed funds at $244 million. Net current assets ended the period at $357 million inclusive investments, cash and bank balances of $236 million, Current liabilities amounted to just under $94 million at the end of the period.
Fixed assets acquired include a property at Drax Hall, just outside of St Ann’s Bay on which a new logistics hub is under development. This new hub is expected to account for increased efficiencies, particularly for the company’s passenger services.
Covid-19 hit the company’s operations, resulting in cuts in passenger usage and routes in March. The company will experience the full effects of the pandemic in its fourth quarter to May, made worse by the all-island curfews as well as the shuttering of the country’s borders, and effectively the tourism market.
Earnings per share for the February 2020 quarter was 8 cents and 21 cents for the nine months. IC Insider.com projects that earnings per share will end the fiscal around 24 cents with earnings for the 2021 fiscal year ending around 60 cents, placing the PE at 15 times forward earnings at the last traded price of $8.98 on the Junior Market of the Jamaica Stock Exchange.

Filed Under: Company News, Company Results

Halting bank dividends to cut US$ demand

April 27, 2020 by

Investors in Jamaica will be hit hard by the Bank of Jamaica (BOJ) decision to halt the payment of dividends for 2020 by financial holding companies and deposit-taking institutions.

Shareholders at and banking groups will be hit hard by the BOJ decision to stop dividend payments for 2020.

Several Jamaicans who rely on dividends from financial institutions will find that their income will be slashed from a source they have come to rely on for decades and especially now that there are few other investments that can provide the same level of return with interest rates in the country so low currently.
According to Jamaica’s central bank, the decision is done ”with a view to conserving capital and further enhancing licensees’ lending and loss-absorption capacities.” “Bank of Jamaica, after consultation with the boards of financial holding companies (“FHC”) designates, wishes to confirm the mutual understanding that FHC designates and deposit-taking institutions (“DTI”) will suspend the distribution of profits by way of declaring dividends in any manner (cash or stock) for the 2020 financial year, until further notice. It is also our understanding that FHC designates and DTIs will similarly postpone the distribution of any unpaid dividends declared for the 2019 financial year.
What does this all mean? Sagicor Group declared a dividend of forty cents per share payable on May 6, 2020, to shareholders on record on April 24. With this latest development, this dividend cannot be paid out in 2020 or until the central bank lifts the restrictions.
The move, although not stated, is much more a foreign exchange control measure in disguise to halt the payments of dividends in US dollars to the majority shareholders who are overseas. The move will result in more than US$50 million not leaving the country for the rest of the year.
Scotia Group, Sagicor Group and NCB Financial Group are three of the country’s largest entities with deposit-taking subsidiaries. All three have large overseas majority shareholders with Scotia Group overseas holding at 73 percent. While the release is silent on is the matter of conserving foreign exchange.

Filed Under: Company News, Dividends, FX Market

TTSE record modest gains on Tuesday

April 14, 2020 by

Fresh from the closure of the market for the Easter holiday break, the Trinidad and Tobago Stock Exchange posted mostly gains at the close but with limited trading levels.
The T&T Composite Index gained 1.38 points to 1,257.18. The All T&T Index rose 2.75 points to end at 1,692.16 while the Cross Listed Index was unchanged at 111.16.
The market closed with six stocks rising and one declining, while five were unchanged. The volume of stocks passing through the market declined to 235,502 shares valued at $5,767,134 compared to 329,414 shares for $1,512,063 on Thursday.
IC bid-offer Indicator│ The Investor’s Choice bid-offer indicator ended with the bids of five stocks higher than their last selling prices and five with lower offers.
Gainers│ Clico Investments rose 58 cents to $25.30, trading 53,199 shares, First Citizens gained 15 cents transferring 1,514 stock units and closed at $38.15 and Guardian Holdings ended at $18, after picking up 5 cents and exchanging 6,506 units. National Flour gained 5 cents after swapping 92,283 shares to finish at $1.20, Scotiabank added 10 cents and closed at $54.60, trading 1,218 stock units and Trinidad & Tobago NGL climbed 99 cents to $19.50, with 39,090 shares changing hands.
Losers│ Calypso Macro Index Fund shed 12 cents to end at $15.88, with 130 stock units crossing the market.
Firm Trades│ JMMB Group ended the day at $2, with an exchange of 2,000 units, Massy Holdings remained at $50, in transferring 7,650 stock units, Prestige Holdings swapped 65 units at $7.90. Republic Financial Holdings traded unchanged at $135, with 18,717 shares changing hands and West Indian Tobacco closed at $30.90, with 13,130 stock units crossing the market.

Prices of securities trading are those for the day’s last transaction unless otherwise stated.

Filed Under: Company News Tagged With: , , , , , , , , , , , , , , , ,

QWI recovers 26% of lost value

April 13, 2020 by

QWI Investments‘ net asset value (NAV) per share surpassed the $1 mark again in hitting $1.01 per share at the close of the markets on Thursday. The NAV is up 26 percent from the lows reached in March.
The share price tumbled over the past month with the fall in the overall market, in sympathy with the fall in the net asset value per share to a low of 80 cents on March 20 but recovered some lost ground to close on April 3, at 93 cents per share. The stock traded on the Jamaica Stock Exchange as low as 63 cents on March 10 with that price proving to be a bottom so far. The price moved upwards to close on Thursday at 83 cents for a rise of almost 32 percent since the low in March.
The Company’s investment portfolio is invested in stocks that are listed on the Jamaica Stock Exchange, USA stock exchanges, with a few stocks that are listed on the Trinidad and Tobago Stock Exchange.
The local stock market has seen a V-shaped recovery over the past three weeks, and if this continues into the fourth week, it could result in more gains in the NAV for the Company. The stock is listed on the Main Market of the Jamaica Stock Exchange.

Filed Under: Company News, General Business News Tagged With: , , , ,

Berger Paints set to surprise

April 13, 2020 by

Berger Paints is one of IC Insider.com’s top stocks for 2020.  It is may not the most popular company listed on the Jamaica Stock Exchange, but it seems set to surprise many investors with its performance in 2020.
It gained much attention with strong growth in profits in the financial year to March 2017, ahead of a switch in majority ownership in August 2017 to the Trinidad based ANSA McAL Group resulting in significant changes in directorship and management. In 2019, the company changed the General manager after a relatively short stint at the helm, a move that could augur well for the company going forward.
In 2019, raw materials accounted for 50 percent of the input into paint production. Most of the raw material used in paint production is petroleum-based, resulting in paint companies benefit when the petrochemical industry goes into a downswing and conversely, a hike in the price of petroleum products raises input costs. Titanium dioxide and crude derivatives form about 50 percent of the raw material cost of paints. In 2019 the average price of crude oil on the world market US$57 for WTI, for 2020 so far, it is at US$43 per barrel, with the current price around US$22 per barrel. If the current trend holds, it will result in lower input costs for Berger for 2020. Management in reporting to shareholders for the year to December stated, “year to date to February 2020, performance indicators are ahead of 2019 with signs of a positive trajectory”.
Between 2012 and 2017, profits increased at an outstanding rate, however, in 2018, the profit was relatively flat and declined in 2019. The company reported lower sales and sharply reduced profit for 2019. The company recorded a two percent reduction in revenues to $1.12 billion for the six months to June and a 6 percent reduction to $1.6 billion for the nine months to September 2019, versus $1.7 billion for the corresponding period in 2018. It ended the year down 7 percent at $2.5 billion. Adverse weather conditions experienced in the third and fourth quarters, negatively impacted revenues, the company told shareholders in a statement accompanying the third and fourth quarter reports. Also affecting sales was the extensive road works that disrupted their customers’ businesses.

Berger Paints is one of IC Insider’s TOP 10 stocks.

The company reported a loss in the final quarter of 2019, a period that generates by far the highest revenues and usually the highest profit. Berger ended with a profit of $29 million compared to the full year compared to $40 million at the end of September. While revenues fell in the fourth quarter to $892 million versus the 2018 period, it was the highest revenues in any quarter with the June quarter of $601 million being the closest. Yet, it recorded a loss when the June quarter recorded a profit of $28 million. Analysis of the reports shows that other operating expenses of $118 million in the September quarter jumped to $254 million for the December quarter. The 2019 fourth quarter also much higher than in the same period in 2018 at $136 million, suggesting there may be some one-off cost that was incurred in the period and distorted the results.
“The company implemented a new an Enterprise Resource Planning Software (ERP) system which provides a fully integrated manufacturing and financial platform and is providing the required details and analytics for the business, the management stated.” The company also introduced a new automotive line of paints to deepen BPJL’s reach into the automotive market.
IC Insider.com projects earnings per share amounting to $2 for the current year and it now trades at an attractive P/E of just over six times projected earnings.

Filed Under: Buy Rated, Company News, Company Results Tagged With: , , , , ,

Buy Caribbean Producers now for 2021

April 8, 2020 by

There are few opportunities in the stock market to generate significant gains than from a beaten-down stock that has strong credentials, dominating the sector it focuses on and has been growing. This is the case with the Montego Bay-based, Caribbean Producers that has seen good times and bad times in the recent past but was enjoying a strong rebound in the first two quarters of the 2020 fiscal year.

Caribbean Producers back in TOP 10

The company’s primary market is the tourist industry. With a virtual closure of the industry currently, sales have come under severe pressure and that will hit the bottom-line severely, even if for a few months. Until the adverse reaction of the market to the Coronavirus outbreak, technical indicators showed that the stock was consolidating with the possibility of a break out from the $5 level with six months results coming far better than the disappointed 2018 half-year results. All that has changed for now as the stock nosedived to $2 as heavy selling pressured the stock.
Expectations are that the company’s third and fourth-quarter results will show the negative impact of the closure of hotels on sales and profit. Investors should bear in mind that the fiscal year starting July may not be affected or not as severely as the second half of the current fiscal year. Importantly, revenues rose 11 percent in September and in the December quarters to US$32.4 from US$29.4 million. IC Insider.com forecast is for a small profit in the March quarter to add to the profit of US$89,000 reported for the 2019 half-year. The stock price collapsed from $5 it was trading at in February to a low of $2 recently. This fall is worse than when they lost US$1.2 million in the year to June 2019 when it still traded above $4. Admittedly, the company has US$39 million of borrowed funds that exposes it to a high degree of risk if the disruption in the business is prolonged. While interest-bearing debt climbed during the year, shareholders’ equity stood at US$22.5 million.
CPJ‘s profit declined 162 percent for the year ended June 2019 to a loss of US$1.17 million compared to a profit of US$1.88 million for the year ending June 2018, with operating revenue for the year amounting to US$94.6 million from US$93.3 million in 2018. The loss resulted from a decline in profit margin in the year and US$679,713 write-off of the cost of developing the inventory IT management system.
For six months to December 2019, gross profit rose faster that growth in revenues at 19 percent to US$8.5 from $7.1 million. Selling and administrative expenses slipped from US$5.8 million in 2018 to US$5.4 million to US$20 million. Finance costs increased in the year to US$791,818 from US$411,143 in 2018 and depreciation jumped from US$609,271 to US$1.4 million.
There are risks in investing in the stock current, but the low price makes it a compelling buy for a big pay off in 2021. IC Insider.com rates the stock a buy based on full or nearly full recovery, for the 2021 fiscal year.

Filed Under: Buy Rated, Company News, Company Results Tagged With: , , , ,

Why Radio Jamaica leads IC TOP 10?

April 2, 2020 by

RJR Communications Group heads the 2020 Main Market IC TOP 10, with potential gains over the next twelve months of 200 percent at a PE ratio of 20 times projected earnings per share for 2021 of 20 cents that could rise to 25 cents or more. IC Insider.com projects earnings for the year to March 2020 to end at 10 cents per share for a PE ratio of 12.5.
Results for the media group for the nine months to December 2019, was vastly better than for the similar period in 2018, resulting in the stock price rebounding from its yearly low of 80 cents by more than doubling the December 2018 price. For the rest of the 2021 fiscal year, not all things may go well with the level of dislocation to the local economy arising from business closures currently in place.
Revenue growth for the nine months to December increased 3 percent over a similar period last year, with the group recording profit of $141 million compared with just $36 million for the same period in 2018. Importantly, television brought in 11 percent more revenues in the critical December quarter than for the similar period in 2018 while radio and newsprint brought in just two percent more. The 2019 results are the best they have been, going back to 2014. Improvement in revenues is better than it appears income for the previous year included advertising revenues related to the broadcasting of World Cup football.
Importantly, while many may associate the company with old media, the group is forging ahead with new media offerings and they are slowly building out their international offerings that will bring in added revenues going forward. RJR Group will benefit from the spending on the country’s upcoming general election due by the first quarter of 2021. The continued growth in the local economy is a major factor behind the recovery, with revenues growing as demand increased for the group’s products.

RJR shareholders at the 2019 AGM at the Jamaica Pegasus

While the current period will be challenging for some of their advertisers who may cut back on spending, the future is positive for the group as they grow their product offerings locally and overseas and increase revenues. On the cost side, the group has been chipping away at excess cost, but there is still more room for further enhanced efficiency.
One advantage that the group has is the low marginal cost of generating income that allows most of the added revenue generated, to flow to the bottom-line as an of the high degree of fixed cost.
The group’s gross cash flow amounted to $430 million for the nine months, with depreciation contributing $211 million. On a negative front, receivables grew by $426 million for the year to December and $300 million in the December quarter. Both are well above the growth in revenues for the year and the December quarter. In March, a related party, a senior manager and a director bought shares in the group, although not very large volumes.

Filed Under: Buy Rated, Company News, Company Results

4 for 1 stock split for Pulse Investment?

February 19, 2020 by

Investors in Pulse Investment can look forward to a stock split that is likely to see each existing stock split into four units when it becomes effective.The directors have not yet met to determine the exact amount of the split or the total number of shares that likely to be offered for sale later, but at Tuesday’s annual general meeting, the Chairman gave shareholders some sense as to what the outturn could be.
At the general meeting, shareholders approved a resolution “That the company be authorized to issue any or all of new shares pursuant to a Rights Issue or Stock Split or both, as the Directors may determine.” The company is not only planning to split the stock but is likely to come to the market for fresh capital to assist with its venture into residential development and investments into other companies. The meeting was told of the progress being made in the hospitality sector with occupancy said to range from 30 percent up to 100 percent at various times of the year. Rental of commercial space had very high occupancy rates. The modeling segment continues to add new talent with good demand coming from overseas for some of the models.

Kingsley Cooper Chairman of Pulse Investments.

The Chairman explained to shareholders that the sum of $377 million shown in the financial statement as income represents amounts covering production expenses relating to TV shows and advertising entitlement sold or used by the company. For the 2019 fiscal year, Pulse reported profit of $688 million up from $315 million in 2018. For the six months to December 2019, the company reported profit of $230 million for the quarter versus $102 million and $473 million for the six months compared with $229 million in 2018. Operating revenues were $163 million for the December quarter and $312 million for the half-year. Fair value gains on investment property contributing $145 million to profit in the second quarter and $291 million for the half-year. Earnings per share ended at 14 cents for the quarter and 29 cents for the six months. Pulse is trading at $11.30 on Wednesday morning on the Jamaica Stock Exchange.

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