Huge surge in profit at Eppley

Profit at the former junior market listed financing and property management company Eppley, surged 193 percent in the June quarter to $70 million inclusive of $1.66 million tax credit, compared to a profit of $24 million in the 2018 quarter.
Eppley took over the running of Eppley Caribbean Property Fund with management fees reflected in other income. Profit jumped 71 percent in the six-month period, from $45 million in 2018 to $76 million in the current period.
Interest income rose 15.44 percent for the quarter to $88 million from $76 million and increased 20 percent for the half-year from $150 million in the 2018 period to $180 million.
Interest expense climbed 32 percent in the June quarter to $50 million from $38 million 2018 and rose just 15 percent for the half-year to $95 million.  Net interest income was flat at $38 million for the quarter but rose 27 percent for the year to June to $85 million from $67 million in 2018. Net interest income to gross interest income improved to 47 percent in the half-year from 45 percent in 2018 but dipped in the quarter to 43 percent from 50 percent in the prior year’s quarter. Other operating income increased significantly by 305 percent to $76 million for the quarter and 117 percent for the half-year ending to $74 million, inclusive of $17 million for foreign exchange gains.
Administrative expenses rose 34 percent to $47 million in the June quarter and 42 percent in the six months to $84 million. Provision for corporate taxes was minimal taxes ended at $1.2 million at the end of six months.
Gross cash flow from operations brought in $84 million but after net loan inflows of $350 million, the company ended with a cash balance of $505 million and financial assets of $373 million.  Amounts advanced in loans, lease and insurance premium financing increased from $2 billion to $2.5 billion.  Borrowings grew 31 percent to $2.8 billion from $2.1 billion at the end of June 2018. At the end of June, shareholders’ equity stood at just $776 million, up from $711 million in 2018.
Earnings per share tripled to 37 cents for the quarter from 12 cents in the 2018 second quarter, while half-year results amount to 40 cents per share, up strongly from 23 cents in the 2018 period. IC is forecasting $1.20 per share for 2019 for PE of 12 times earnings at $14.50 the stock last traded at on the Main Market of the Jamaica Stock Exchange. Earnings for 2020 should exceed $1.60 per share, making the stock an attractive buy.

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