After a few years of mediocre performance since it was listed in late 2017 on the Junior Market of the Jamaica Stock Exchange, Fosrich is enjoying a most robust year in 2021, with a surge in revenues and a major blast in profits as the construction sector is enjoying the best performance in history and lifting sales of entities involved in the sector.
Revenues for the June quarter blasted 33 percent to $544 million, from $408 million in the similar 2020 period, helping to contribute to a 28 percent increase in six months revenues of $1,093 million, up from $857 million in 2020. Net Profit leaped 336 percent in the second quarter to $76 million, up from just $17 million in 2020 and for the half year, profit bolted 414 percent to $115 million from a mere $22 million in 2020.
Gross Profit blew 44 percent past $169 million for the June quarter last year to $244 million this year and rose 29 percent from $339 million in last year to $435 million for the six months this year, resulting in improvement in profit margins.
“These increases were attributed primarily to the greater availability of the products required by the market. While the overall increase in revenues was 28 percent, the product lines that had significant increases were PVC which saw increases of 105 percent, hardware 93 percent, wiring devices 52 percent and control devices 48 percent,” the Managing Director, Cecil Foster advised shareholders about the increase in sales, in his commentary of the results.
FosRich traded at $7.99 on Tuesday.
Administration expenses, year-to-date, were $310 million, an increase of 14 percent over 2020, with $271 million. For the quarter, these expenses grew much faster than in the first quarter at 32 percent to $166 million from $126 million in 2020. “The changes were driven primarily by increased staff related costs for salary adjustments, increased sales commission due to improved sales performance and improvements in staff benefits, increased staff training cost with the launch of the new FosRich Corporate University, increased motor vehicle expenses, increased occupancy cost due to the commencement of obligations in January for the second Hayes factory building and increased depreciation charges,” Foster advised shareholders. Finance cost for the year-to-date was $51 million compared to $57 million for the prior reporting period.
The operations delivered gross cash flow of $152 million, but growth in receivables, reduction of inventories, addition to fixed assets and payments on loans and lease funding of $58 million left the net position, with a cash flow deficit of just $1 million. Current assets ended the period at $1.99 billion, including inventories of $1.37 billion, trade and other receivables of $424 million, and cash and bank balances of $33 million. At the end of June, current liabilities stood at $496 million and resulted in net current assets of $1.5 billion. A related party owes $288 million, being funds loaned to complete an apartment complex, with sales expected to be completed this year, with proceeds slated to pay off the amount during 2021.
Shareholders’ equity stands at $983 million, up from the $869 million at the end of December 2020. Borrowings amount to $1.8 billion.
Earnings per share for the second quarter surged to 15 cents from 3 cents in the prior year and climbed to 23 cents compared to 4 cents in 2020. ICInsider.com forecasts 60 cents per share for 2021 and $1 for 2022. The current year’s PE is now 13.3, with the last traded stock price at $7.99 on the Junior Market of the Jamaica Stock Exchange. The average Junior Market trades at a PE of 12.7 and net asset value is $1.96, with the stock selling at 4 times net book value.
