Kremi profit jumped 184% in the February quarter over that of 2014.
Revenue increased 11 percent for the February 2014 quarter, reaching $274 million but most of that is due to price increase and 19 percent to $1 billion for the twelve months.
Gross profit margin climbed to 28.44 percent in the latest quarter from 25.9 percent in the 2014 period but for the full year, the margin was at 27.59 percent compared to 23.67 percent for the 2014 period. Going forward, the margin should improve even more with the blast freezer installed in November, which management says will reduce utility cost and create capacity for greater production to enhance sales volume.
Administrative cost rose by 37.7 percent to $168.8 million for the full year and by 6.9 percent to $44.5 million for the quarter. The slower growth in the latest quarter is an indication that cost increase in the area is normalising and that is a god sign going forward. The company should also benefit from lower marketing cost in 2015 with the upfront cost for the rebranding and advertising picked up last year repeating in the current year. The last quarter reflects the lower on going marketing cost at just $6 million compared to $11.4 million in 2014 and $37.8 million for the full year versus $27 million in 2014. Finance cost in the quarter jumped to $10 million from $4 million in the prior year and an average of just over $5 million in the prior quarters. Based on the funds borrowed the cost going forward should be around $5 million per quarter subject to repayments and changes in interest rates if any.Going forward the benefits of blast freezer will be reflected for the full year, while it only partially impacted the last quarter of the just concluded fiscal year. They increased prices around 15 percent ahead of the Christmas period and may have seen some cut back in volume in the quarter as a result. They should be able to recover volumes going forward and even expand on it as the shock effect of the price increase wears off and more retail outlets are added.
Importantly, electricity cost will fall from two standpoints one is the lower electricity cost around 20 percent from the peak last year and lower cost due to the faster freezing of ice cream thus using less energy. The cost of milk or milk powder is down quite sharply as well. With all of the above earnings of 2015/16 could land at 60 cents.
[…] Caribbean Creams profit upgraded to show a 62 percent increase to $56.8 million or 15 cents per share above the 2014 earnings, according the audited financial statements compiled by KPMG, the company’s new auditors. The comparative 2014 results were $35 million after a small tax expense. The interim report had profit for the year at $49 million on slightly higher sales than the audit report showed. The major area of change was lower administrative cost of $12 million in the audited accounts versus the preliminary figures. IC Insider is forecasting profit of 244 million for the 2016 fiscal year or 65 cents per share from increased sales revenues that will flow mainly from a 15 percent price increase effected just before the Christmas season. The stock which is listed on the junior market of the Jamaica Stock Exchange traded at $1.10 on Thursday and has moved up from 65 cents just before the release of the interim results. […]