Cable & Wireless reports profit for the year ending March of $1. 2 billion, up from a loss of $8.9 billion in 2015. The company got help from net exceptional credit of $1.2 billion, even without this credit, the company made a small profit after finance cost but before taxation.
Importantly, C&W made an operating profit in the second half of the year of as Mobile revenues climbed by 22 percent.
The exceptional income stems from a reversal of $3.4 billion of restructuring cost written off in the 2015 fiscal year offset by employment restructuring cost in 2016. The company reports profit of $178 million in the March quarter compared with $486 million in the December quarter.
Revenues for the group rose moderately to $23 billion from $21.9 billion in the 2015 period while operating expenses fell to $15.8 billion from $17.4 billion but depreciation rose to $2.3 billion from $1.7 billion. Amortisation cost climbed to $1.1 billion from $848 million while finance cost remained fairly steady at $3.9 billion.
The company’s stock trades at $1.48 up 10 cents in the morning session from Monday’s closing price, on the Jamaica Stock Exchange today.
Shameful, does the JSE care?
1834 Investments, (formerly The Gleaner Company Limited) advised the Jamaica Stock Exchange that the Audited Annual Financial Accounts for March, 2016 will be late and unavailable for publication by May 30, 2016. 1834 anticipates that it should be available for publication on or before June 30, 2016.
This is bad news for investors and bad news for the capital market. Both the Stock Exchange and the Financial Services Commission who overseas such matters should hang their heads in shame for such failure that have deprived investors of getting important financial information on the company’s operations for more than 8 months.
In the past several companies have changed their year end, as recently as late last year Desnoes & Geddes and Access Financial changed their but provided investor with results for all relevant quarters, but the Gleaner Company who changed theirs to March from December did not do so. Regulators of the Stock Exchange gave some clumsy excuse why they could not ask for the December quarter results.
The rules of the Stock Exchange are quite clear, listed companies are required to submit a quarterly interim financial report within 45 days of each quarter. In the case where a company opts to release an audited account within 60 days of the year-end, they can opt in lieu of a quarterly report within 45 days.
The focus is on reporting quarterly, that comes before the audited. What seems to escape the regulators at the Exchange is that investors are kings and queens and they are to one to be foremost in the minds of the regulators to ensure that their investment is protected. One of the main means is timely financial information. If the exchange understood this they would have ensured that the Gleaner Company would be demanded to release the December results within 45 days.
Based on the exchange’s inadequate surveillance we now have a situation where the Gleaner Company (now 1834 Investments) have not reported financial for what looks like 6 months and who knows when it will release the information.
Markets thrive on information and that is the reason why the JSE opted long ago to the publication of quarterlies rather than a six months interim and it has served investors well.
First Global’s big year
2015 was a big year for the Grace owned First Global Bank in recording a strong 39 percent increase profit after tax to $440 million over 2014. The strong growth emanated from a sharp increase in Loans and advances of 23 to $21.8 billion at the year end helping to drive interest on loans by 23 percent to $2.56 billion.
Net interest and other income amounted to $3.7 billion versus $3 billion in the previous year, for 25 percent increase.
Customer deposits grew 10 percent to $24.6 billion but interest cost grew to $566 million from $521 million for depositors.
The bank, one of the smaller one in Jamaica enjoyed growth in interest income by over 20 percent for the 2015 financial year over the 2014 as they posted interest revenue of $3.6 billion compared with $3 billion for 2014. Interest cost grew 11.3 percent from $893 million in 2014 to $992 million in 2015.
Fees and commissions recorded significant growth of 32 percent moving from $724 million to $956 million for financial year 2015. Foreign exchange gains grew 16 percent to $231 million, while gains on investment activities more than quadruple from $25 million to $116 million.
A 28 percent increase in staff costs helped to push operating expenses to $3.3 billion, for a 25 percent increase over the 2014 period. The bank’s asset grew by over 12 percent to $47 billion against $42 billion recorded for 2014 and shareholders’ equity climbed to $7.2 billion from $6.9 billion in 2014.
While profit had climbed sharply, close to half a billion, corporate taxation was ended being nil as tax free income wiped out any likelihood of a tax liability for the year.
Flour pressed into more profit
Profit after tax grew to TT$9.2 million up marginally from $9 million for the March quarter, this year at Trinidad’s National Flour Mills, from declining revenues of $111.2 million compared with $121.5 million in the 2015 quarter.
The company enjoyed earnings per share of 8 cents, compared with 7 cents in the 2015 quarter and 28 cents for the full year, in 2015 and could end up around 32 cents for the 2016 if the current trend continues.
The lower revenues “reflect the contraction in demand locally, and some timing differences with respect to large export orders which the company now pursues vigorously. Cost containment measures continue to provide the cash cushion to execute planned capital projects. Thus, growth in the regional export markets and more local content are priority strategies to improve both our sales revenues and foreign currency position” says Chairman Mike Bazle in his commentary accompanying the company’s quarterly results.
“It is thus important to note that the current economic environment continues to challenge the Company, particularly with respect to the timely supply of foreign exchange which is central to the financing of NFM’s grain purchases. When taken together with the cost implications of declining TT currency values, the company’s intention is to manage these additional costs, as key priorities, in order to ameliorate the impact on our customers,” the Chairman went on to say.
Despite the falling revenue, gross profit rose from $29.8 million to $31 million while Selling and distribution expenses were static at $7.8 million and Administrative expense declined to $10.74 million from $11.85 million.
Borrowing funds jumped to $122.78 million from $94 million compared to shareholders equity of $204 million.
The company is listed on the Trinidad and Tobago Stock Exchange and last traded at $2.20, with a PE around 7 times this year’s earnings and is priced below the average stock on the TTSE market. With recession and devaluation of the Trinidad currency investors are not aggressive in picking up stocks.
Stock split revs Pan Jam’ stock not profit
Pan-Jamaican Investment Trust (Pan Jam) recently announced a proposed 5 for 1 stock split which sent the stock flying to $125 from below $90. The company also announced a second dividend for the year with the stock trading ex-dividend on May 27. The dividend is for 75 cents per share, payable on June 22, to shareholders on record as at May 31.
The latest payment makes the second dividend of the same amount in March this year. In June 2015, the company paid a dividend of seventy cents per shares.
Pan Jam also advised that on May 13, four members of the management team were issued stock grants under the Long Term Incentive Plan totaling 242,691 shares.
The group reported net profit attributable to owners for the quarter ended March of $721 million, up from $542 million in the 2015 first quarter, an increase of 33 percent. Earnings per stock unit amounted to $3.44 compared to $2.59 for the same period in 2015. Earnings from ongoing operations seem headed for $15 per share for this year.
Performance for the quarter reflect a gain of $185 million arising from the divestment of shares in Hardware and Lumber and an increase of $149 million in the share of associated company and joint venture companies’ results. These more than compensated for decreases of $43 million and $84 million in property and other income respectively.
Property income was reduced by lower rental income as a result of a reduction in average occupancy from 85 percent in March 2015 to 81 percent in the current year as well as reduced booking of property revaluation gains. In the first quarter of 2015, other income increased by a one-off lease buyout amounting to $87 million. Operating expenses increased principally as a result of pension costs related to the reorganisation of the group’s pension arrangements as well as amortization of new property management software. Operating expenses rose to $288.59 million from $259.57 million while Finance costs rose sharply to $130 million from $94 million.
Total assets amounted to $28.3 billion at the end of March while stockholders’ equity increased to $22.4 billion, equating to a book value per stock unit of $106.86.
Since Pan Jam announced the stock split, the stock rose to $125 on the Jamaica Stock Exchange, up from $88 at the beginning of May.
1m mobile phones cheer investors
Cable and Wireless is celebrating the recent attainment of 1 million mobile customers but investors should be celebrating as well. This milestone could mean big bucks for investors as the company moves out of losses into profit.
At the end of March 2015, the total number of cell phone customers stood at 838,000 users, the increase to 1 million resulted in 162,000 new customers. The growth in the numbers place the company around 35 percent market share as it continues to eat away at the competitor’s market share. Importantly, it translates to additional revenues that is close to $2 billion per annum. This is important for a company that suffered operating loss of $2.2 billion in 2015 and $700,000 million loss for the nine months to December 2015. With continued growth expected in the number of mobile customers, for the current fiscal year to March 2017, should move the company into a clear profit from operation, for the time since the year ending March 2007.
IC Insider.com is projecting 20 cents per share for the current fiscal year. The stock traded at $1.28 on the Jamaica Stock Exchange but could well rise when the company release full year results for 2016 March year end, by the end of May.
Pulse needs a mentor of sorts
Kingsley Cooper Chairman of Pulse
Subsequent to the annual general meeting, the directors pushed through an extraordinary meeting to consider and approved a rights issue. The legitimacy of that meeting is in question. For one the Jamaica Stock Exchange that should have been advised of the proposition a week ahead of the board meeting to consider the rights and the results of the meeting within 48 hours was not done until a few days ahead of the meeting. More importantly, the notice sent to shareholders did not meet the minimum 21 days required by law as the notice was posted around 19 days before the meeting date.
The board at the AGM admitted they were unaware that they could have submitted interim results in the past when the audit of a prior period was incomplete.
Now the company has released its nine months results showing profit of $191.5 million versus $148 million for the nine months of 2015, and $58 million compared to $48 million in the March quarter. The profit includes fair value gains on investment property of $26 million in the quarter and $78 million for the nine months. Revenues came in at $65 million for the quarter versus $57 million in 2015 and for the nine months revenues were 17 percent ahead of 2015 at $216 million.
The company paid a dividend of 6 cents per share in January this year but it is nowhere to be found in the interim statement. It should be shown as a separate line item on the cash flow statement as well as in the statement of changes in equity. Then on the list of directors’ holdings Oliver Holmes who resigned from the board some time ago is still shown in the list as a director but with no shares owned.
Kingston Wharves Q1 profit jumps
Profit before taxation for the March quarter Kingston Wharves jumped 53 percent from $212 million in 2015, to $325 million in 2016. Net profit attributable to shareholders was 48 percent higher at $276 million over the $187 million generated in the similar period in 2015 and resulted in earnings per stock unit of 19 cents, up from 13 cents in 2015.
The strong growth in profits stemmed from revenues that rose 18 percent to $1.2 billion for the quarter, the growth came from an increase of 18 percent from terminal operations and 17 percent from Logistics and Ancillary Services.
“The Group generated revenues of $943 million from terminal operations, with significant contributions from increases in domestic container and motor units. Domestic container and trans-shipment motor units volumes both grew by 20 percent while domestic motor units realized a significant 64 percent increase over the prior year. Kingston Wharves anticipates continued growth in this key segment for the remainder of 2016 as we perfect both our business development and marketing strategies and continue to gain greater operational efficiencies” Jeffrey Hall, Chairman reported to shareholders in their report accompanying the quarterly.
Logistics & Ancillary Services| “The Logistics and Ancillary Services segment also realized significant advances, with total revenue of $257 million. This was attained primarily as a result of the expansion of our local and international customer bases through aggressive market outreach and improved service levels and capabilities in line with Jamaica’s Logistics Hub Initiative,“ Hall, further stated.
Gross profit climbed well ahead of revenues, at 34 percent over the 2015 period and was major factor contributing to the profit gains as well as Administrative expenses that increased by 19 percent to $236 million. Finance costs rose marginally to $39.7 million from $37.2 million while taxation almost doubled to $45 million.
Stockholders’ Equity stood at $17.7 billion and borrowed funds at $2.33 billion at the end of March while short-term investments and cash funds amounted to $3.3 billion. In 2015 the company reported net profit of $1.26 billion or 88 cents per share, for an increase of 49 percent over the $843 million earned in 2014.
The stock last traded on the Jamaica Stock Exchange at $11.65.
138SL dominates – Wednesday
138 Student Living had 2 m ordinary shares trading on Wednesday
Investors pushed the price of 16 stocks in the overall market up, 11 down, including 8 stocks rising and 4 declining, from the junior market. The JSE Market Index moved up 445.09 points to end at 153,869.03. The all Jamaica Composite Index rose 497.77 points to close at 170,913.54 and the JSE combined index gained 233.84 points, to close at 164,488.33.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator reading showed 14 stocks with bids higher than their last selling prices and 6 with lower offers.At the end of market activities, Cable & Wireless reacted negatively to news that there is no planned buy out of local shareholders and lost 16 cents and closed at $1.26 after trading 431,515 units, Caribbean Cement traded 621,000 shares to close at $26, Carreras traded 111,082 units with the price rising 41 cents to close at $64.01. Grace Kennedy rose 10 cents with 69,224 shares trading to close at $88.10, the price of 1834 Investments rose by 2 cents in trading 28,349 units to close at $1.02, Jamaica Broilers closed with a fall of 15 cents at $14.50 while trading 13,760 shares. Jamaica Producers traded 43,641 shares at $35, JMMB Group traded 7,330 shares at $9.80, for a 10 cents loss. Kingston Wharves traded 60,957 at $11.65,
Mayberry Investments traded 61,305 shares at $3.99 after falling by a cent, National Commercial Bank traded 80,771 shares, to close with a rise of 10 cents at $39.85. Pan Jamaican Investment pulled back 6 cents to close trading at $124.94 with 25,981 shares changing hands, Radio Jamaica rose 2 cents in trading 11,920 shares at $1.12, Sagicor Group ended with 172,274 shares changing hands, but fell 80 cents, to end at $22.20. Scotia Group closed with a gain of $1 to end at $31 while 16,216 units changed hands, Supreme Ventures closed at $4.70 with 50,959 shares trading after rising 5 cents, Jamaica Money Market Brokers 7.5% preference share ended with 45,500 units trading at $2.11 after falling by 3 cents.
Juniors close up on Friday
One Honey Bun’s Products – the stock ended at a new closing high of $22
The junior market inched forward at the close on Friday, with a mere 193,019 shares valued at $1,341,812 changing hands. The market index added just 8.11 points to end at 2,184.43 as a total of 13 securities traded, with 3 advancing and 5 declining. The junior market ended with bids for 3 stocks closing higher than their last selling prices and 2 ending with lower offers.
At the end of trading, CAC 2000 closed while trading 10,000 shares to end at $6.40, Caribbean Cream fell 5 cents with 9,000 shares changing hands at $4.95, Derrimon Trading dipped 30 cents while trading 400 units to close at $4.50, Honey Bun closed at a new 52 weeks’ high of $22, after rising $1.50, with 19,637 shares trading. Iron Rock Insurance traded 2,725 shares at $3.40, 
Jamaican Teas traded 612 shares and fell 25 cents to end at $3.55, Jetcon Corporation traded 60,000 units to close at $3, Key Insurance lost 17 cents in trading 3,000 shares and closed at $2.50. Knutsford Express gained $1 to close with 6,200 shares trading at $18, Lasco Distributors closed with 42,370 units trading with the price rising 4 cents to close at $7.65, Lasco Financial closed at $3.50 with 15,715 shares changing hands. Lasco Manufacturing closed at $4.76 with 21,890 shares trading, to gain 1 cent and tTech closed with 1,470 units at $4.50.