Dolphin Cove Buy Rated again

Dolphin Cove now placed on the IC Insider’s Buy Rated list. The company is projected by IC Insider to earn $1.50 per share for 2016 after tax or 44 percent up on the earnings per share for of $1.04 for 2015. If the company achieves the above earnings the PE ratio would be 7.5 times 2016 estimated earnings, versus 8 for the average of the junior market.
As the year roles on the price is likely to increase, based on valuation of 14 times 2015 earnings, placed on the junior market, suggesting the possibility of the price doubling within a year. In addition the company pays regular dividends and this will add to returns investors will get from this stock.
First quarter results to March hit a profit after tax of $185 million for a strong increase of 39 percent above the corresponding period in 2015. The improved profit came from an increase of 11 percent in revenues to $520 million, due primarily to a 35 percent growth in ancillary revenue. Gross profit increased by 14 percent as a result of the growth in revenue and a decline in direct cost of sales while increase in operating expenses was up 5 percent over the 2015 cost to reach $297 million. There was new operating and administrative costs which the directors’ state contributed to the improved service delivery.

“During the quarter the Group made capital expenditures of $130 million to improve the facilities of the Parks which is expected to have a positive impact on our performance going forward. A dividend of 20 cents per share was declared in April and will be paid in second quarter of 2016. The Group was in a strong financial position as at the end of the quarter with improvements in working capital and net assets. We continue to expand our marketing efforts in anticipation of the additional rooms that are expected to come on stream during 2016 and there is the prospects of increased local sales with the recent opening of the Caymanas to Ocho Rios toll road which will significantly reduce the travelling time from Kingston. We also anticipate that our new enhanced website will continue to generate growth in our internet bookings and by extension our revenue. The financial resources of the group remain strong and this will facilitate our plans to expand our operations locally and in other Caribbean countries” the directors stated in their report to shareholders.
The company ended with cash and investments of $385 million, borrowings of $210 million and equity of $2.9 billion.
The stock last traded on the junior market of the Jamaica Stock Exchange at $11.10, but has a bid to buy at $11.25, with offers starting at $12.