Increased Jamaica Producers’ investments

August 21, 2017 by

Jamaica Producers to introduce a new line of banana chips.

Jamaica Producers has been undergoing major changes for a number of years as it morphs from a predominant banana marketing company to a much more diversified group.
The group sold its banana ripening and fruit distribution business in the United Kingdom years ago bought a juice business in Holland and more recently bought more heavily into Kingston Wharves that is now considered a subsidiary.
It also bought out the Tortuga Rum Cake business and relocated production to Kingston. With all of that its core business has only recently started to show sign of profitability that the level of investment demands. In furtherance of improving return on investment in the legacy business as well as newer ones, the group says they will continue a programme of investment that is designed to improve its product and service offering while enhancing its operating efficiency.
In line with this programme, prior to the end of this year, Kingston Wharves will launch new logistics facilities for the warehousing of general cargo, and the storage of bulk and automotive cargo for domestic and transshipment markets. The location of this is slated for lands adjacent to the Tinson Pen airport.
The subsidiary, “JP Tropical Group will commission new state-of-the-art cold storage and ripening facilities at Retirement Road in Kingston for its banana and pineapple business and will introduce a new variety of St. Mary’s banana chip for the first time in 20 years.” “The group’s head office activities will move from Oxford Road in New Kingston to the locations in Kingston where operations are centred. This will mean that we will enter the 2018 financial year operating from purpose built corporate offices in Newport West with a lower overhead cost base,” the company reported.
“These new initiatives will build on the recent completion of a high specification bakery in Kingston to consolidate the production for international markets of Tortuga Rum Cakes, the launch of a new packaging facility for fresh pineapples in St. Mary, and a new juice line in the Netherlands that deploys high pressure processing technology to extend the shelf life of fresh juice produced by us. We are particularly pleased to report that these completed capital programmes are all contributing positively to the performance of the Group,” Jamaica Producer advised shareholders in a report accompanying the half year results.
The shift of Tortuga Rum Cakes production to Kingston will result in major cost savings for this operation than the other locations within the region, with lower cost and economies of scale for that operation.

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Profits surge at Kingston Wharves

August 20, 2017 by

Revenues at Kingston Wharves jumped 19 percent or $467 million over the corresponding period in 2016 to $2.9 billion for the six months to June 2017 and 22 percent for the June quarter to $1.55 billion.
The strong revenue growth resulted in profit before taxation climbing 32 percent from $650 million in 2016 to $857 million for the half year and an even more impressive 40 percent in the quarter, to $454 million. Net profit attributable to shareholders increased 34 percent, moving by $187 million to $742 million over the comparable period in 2016 for the six months and a strong 46 percent in the latest quarter, to $414 million. The results produced earnings per stock unit of 29 cents for the quarter and 52 cents for the half year.
The strong quarterly performance comes against the background of a sharp fall in other operating income from $105 million to just $17 million, partially offset by finance costs declining to $31 million from $67 million in 2016 June quarter.
The Terminal Operations Division delivered revenues of $2.3 billion, a 19 percent increase over the corresponding period in 2016. Divisional operating profits increased by 50 percent from $485 million to $727 million. The key drivers include growth in container handling, motor units and break bulk operations amongst other areas. “Total revenues earned in the Logistics and Ancillary division amounted to $676 million, with operating profits totaling $192 million, an increase of 15 percent and 6 percent respectively, over the corresponding period in 2016 due primarily to continuous expansion of KWL’s service offering and a widening of its customer base, as well as improved operational efficiencies gained through increased use of technology to manage the warehousing operations and security services,” the chairman Jeffrey Hall, the company’s chairman reported to shareholders.
Administrative expenses rose much faster than revenues at 30 percent for the quarter, to $290 million and 18 percent for the six months to $543 million.
The Group’s balance sheet reflects short term investments and cash of $3.1 billion, shareholders’ equity of $19 billion and borrowed funds amounting to $2.4 billion.
The growth for the half year has been very strong suggesting that IC Insider.com’s forecast of $1.13 for the full year is on track and may even be exceeded if the second quarter pace of growth continues. The stock traded at on the Jamaica Stock Exchange on Friday gone at $30, resulting in one of the highest valued stock on the market at a PE of 27 times current year’s earnings. If the growth continues at the current pace into 2018 then the current value would be acceptable as the valuation would fall under 20 times 2018 earnings.
Kingston Wharves will shortly launch new logistics facilities for the warehousing of general cargo, and the storage of bulk and automotive cargo for domestic and transshipment markets and have already had acceptance from potential customers. The location of this is slated for lands adjacent to the Tinson Pen airport in Kingston.

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Kingston Wharves pumps up JP profits

August 20, 2017 by

Jamaica Producers current HQ.

Jamaica Producers made improvement in its operations, with strong gains in operating profit, helped by the consolidation of Kingston Wharves (KW), but importantly, gains from its other core business.
The company reported profit attributable to shareholders of $158 million for the second quarter and $251 million for the half year to June, 2017.
The results flowed from revenues of $7.4 billion up from $4.6 billion in 2016 for the half year and $4 billion for the quarter, up from $2.4 billion in 2016. In 2016 the group’s share of KW was treated as an associate as such the revenues for 2016 does not include that for wharf as is the case in 2017.
Closer look at the numbers, shows that while profit jumped sharply, the subsidiary Kingston Wharves accounted for $485 million of the $546 million profit generated from operations in the June quarter and $918 million of the $981 million generated for the half year. Revenues from KW amounts to $1.55 billion for the quarter and $2.94 billion for the six months, less than 40 percent of JP group’s revenues.
The numbers suggest there is much work to be done, to knock Producers as the group is called, into shape. Relocation of the head office from rented property to an existing property owned by them and serving other group companies and the consolidation of the Tortuga Rum Cake operations in Kingston with modern equipment and other changes, will help to improve profitability of the core business.
The results for 2017 translate to 14 cents per share for the quarter and 22 cents for the half year and should end around 50 cents for the year. With a stock price of $13.75 the market value is a very rich 29 times earnings against a market average of just over 13. The stock which traded as high as $22 earlier this year has been slowly correcting and seems headed lower as investors get a clearer picture of the likely full year’s earnings.
The group’s main activities are port terminal operations, logistics, the cultivation, marketing and distribution of fresh produce, food and juice manufacturing, land management and the holding of investments.

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Huge improvement at Jamaica Producers

August 16, 2017 by

Jamaica Producers at $14.50, currently.

Jamaica Producers made huge improvement in its operations, with strong gains in operating profit, helped by consolidation of Kingston Wharves but more importantly major gains from its other core business.
The company reported profit attributable to shareholders of $158 million for the second quarter to June and $251 million for the half year to June, 2017.
The results flowed from revenues of $7.4 billion up from $4.6 billion in 2016 for the half year and $4 billion for the quarter, up from $2.4 billion in 2016. In 2016 the group’s share of Kingston Wharves was treated as an associate as such the revenues for 2016 does not include that for wharf as is the case in 2017.
The results translate to 14 cents per share for the quarter and 22 cents for the half year and should end around 50 cents for the year. With a stock price of $14.50 the market value is a very rich 29 times earnings.

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C&W reports profit

August 11, 2017 by

Jamaica’s telecom provider, Cable & Wireless, is reporting profit from operation in the June quarter this year, compared to a loss in the same period in 2016.
The company enjoyed an 11 percent rise in revenues helped mainly by a 22 percent increase in mobile revenues to generate $6.8 billion in revenues up from $6 billion in 2016 and profit of $222 million versus a loss of $695 million in the June quarter of 2016. Operating cost fell to $4.24 billion from $4.5 billion in the 2016 quarter to generate profit before finance cost of $1.59 billion. For the six months, revenue of $13.2 billion was generated with a loss of $311 million compared to a profit of $1.1 billion in 2016 from revenues of $11.85 billion.
Subsequent to the quarter the company announced a series of price increases that is set to boost revenues and help the bottom-line. the stock closed on Friday on the Jamaica Stock Exchange at $1.07. The latest information makes this stock one to watch next week.

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Stationery shares set to gain over 150%

August 11, 2017 by

SOS executives at the listing ceremony at the JSE.

Stationery & Office Supplies shares were listed on the Junior Market of the Jamaica Stock Exchange on Thursday.
The price of the stock is set to gain more than 150 percent when trading resumes on Friday, if interest in the stock shown on Thursday is anything to go by.
After a successful public offering of the stock in July that was priced at $2, investors traded 278,046 units between $3.50 up to $5 on the opening day. The trades were outside the limit of $2.60 it could trade at based on the limitation of the exchange circuit breaker rule and were cancelled. The circuit breaker rule limits price movement to no more than 30 percent from the last price on the previous trading day. Normally the price would be the last closing stock price, subject some variation to this, when the bids or offers are higher than the previous closing price or the offer is lower. The stock closed with the bid at $4.70 which is the effective price on which a 30 percent change can take place in Fridays trading and could result in the price going as high as $6.11.
The market closed with bids to buy up to 4.36 million shares with offers to sell 106,922 units between $5 and $12, but supply is expected to increase on Friday with the price reaching the $5 level.
The listing brings the total of Junior Market ordinary shares listed to 32, which exceeds the listing on the Jamaica Stock Exchange main market listings. Total Junior Market listings are now 36 with 4 preference shares listed.

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10 for 1 split for Carreras shares

August 10, 2017 by

Carreras as high as $110 after stock split announcement.

The directors of Carreras advised that they will be recommending a 10 for 1 stock split to members of the Company at its Annual General Meeting scheduled for September 6.
In order to facilitate the proposed subdivision of the existing ordinary shares in the capital of the Company, the maximum number of shares that the Company is authorized to issue is to be increased by a subdivision into 10 ordinary shares for each one that currently exists and thus raising the authorized capital to $4.8544 billion units with effect from the close of business on September 20, 2017. The existing issued shares are to be increased from 485,440,000 units of no par value to 4,854,400,000 ordinary shares of no par value. The ex-stock split date is September 18, 2017.
Carreras stock trades at $110 on the main market of the Jamaica Stock Exchange.

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Stock split virtually baked in for NCB

August 7, 2017 by

NCB Financial Group HQ.

NCB Financial Group released nine months results just over a week ago, with earnings rising 33 percent over the prior year, helping to push the stock price to a record $94.99, with investors sending the clearest message, that a stock split will and must take place, whether management wants to or not.
In an investors’ briefing, the day after the released results, Group Chief Financial Offer and Deputy CEO, Dennis Cohen in response to the question, whether they would consider a stock split for NCB shares, said they were not considering one and have not discussed the matter. According to  Cohen, they see no benefit to the group from a stock split.
The response by management, if they are honest, indicates that they don’t have all the answers in managing. The reality is that companies do benefit from stock splits, they may not be readily visible in all cases, but over time they do. In reality, it starts from the time the announcement of a split is made.
It is true that shareholders are the ones who benefit most from splits. Good management will ensure that all stakeholders benefit from their skills. They are managing the company for shareholders and ought to ensure that the owners get maximum benefit for their investments and not just the major shareholders. Too often, management feel that their role is to manage a company for profit maximization without factoring the shareholders fully into the equation. This is unfortunately the message the top executives at NCB were sending to shareholders, with their comments. Some of that was visible not so long ago, when they pursued an erratic dividend policy that no one knew what it was, creating havoc for the stock.
The stock now has less than 7,000 units on offer at the close on Friday while no stock was offered in Trinidad were it is listed. Supply in the stocks has virtually dried up in the last three weeks. Under this situation there is going to be limited trading in the stock and management will have to move to do something about it before the year ends.

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Profit drops at Cargo Handlers

August 7, 2017 by

Adage has it that markets know best, but the performance of Cargo Handlers profit performance and stock price movements put the concept in greave doubt. The company reports lower revenues and profit for the June quarter this year compared to 2016 while the stock price tanked from serious overvaluation.
Profit for the nine months, dipped to $116 million from $124.5 million in 2016 after tax, even as revenues climbed from $234 million to $255 million. For the June quarter revenues fell to $74 million from $81 million in 2016 and profit after tax dropped sharply by 32 percent, from $46 million to $31 million. Earnings per share ended at 8 cents for the quarter and 31 cents for the nine months, for the full year earnings should end around the 40 cents range. Such earnings would put the price earnings ratio at a very high 33 and the stock price at great risk of falling.
In 2016, the company earned $6.3 million in other income in the June quarter with gains of $2.2 million in foreign exchange earnings in 2017, for the quarter and year to date and $3.4 million versus $10.5 million for the nine months to June last year. While revenues fell in the June quarter, compared to 2016, operating expenses jumped $5 million to $35.4 million and $20 million for the nine months to $112 million. $7 million of the increase, management reported, is due to “adjustments to some vessels’ rescheduling.” Management also stated that “the petroleum division will in the ensuing quarter begin to introduce newly acquired equipment that will give us the capacity to comfortably service additional business.”
The company’s is strong financially, with cash on hands of $237 million, current liabilities of just $25 million and shareholders’ equity of $366 million and generated cash flows from operations of $137 million for the nine months period.
An interim dividend of 11 cents per stock unit was declared by the directors to be paid on September 8.
Montego Bay is said to be the fastest growing region in Jamaica currently, if the pace continues, should provide the company will a solid base for growth. The big concern now is the need for the stock price to adjust downwards to mirror the values in the rest of the market. The stock peaked at $30 earlier this year and last traded at $13.20. It is going to take a few years for those who bought at the top of the market to recover their investment and opportunity cost expended on it. Cargo Handler is not a recommended buy currently.

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Bonus on cards for Carreras

August 2, 2017 by

Carreras as high as $108 after stock split announcement.

Shareholders in cigarette marketers, Carreras could be enjoying the benefits that could flow from a stock split.
The company today advised that the Board of Directors will meet on August 8, to consider whether to recommend to the Company’s stockholders for consideration at the upcoming General Meeting scheduled for September 6, a split of the Company’s issued shares.
In Wednesday’s trading investors pushed the price to $108 in early trading. In recent weeks the stock has become very scares with low interest rates in the system and high dividend paid by the company.
Others to likely split as liquidity continues to dry up are Palace Amusement, Blue Power, Access Financial and NCB Financial Group that now has little selling of its shares with the price over $80 and 33 percent growth in earnings that should push full year earnings to more than $8 per share. Management of the company at a recent press briefing stated that no consideration has been given for this and suggested that the company won’t benefit from it. That in fact is not a correct statement as both the company and shareholders will benefit if it were to take place.

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