Acquisitions and revenues flows from a state election in Tobago and elections in Barbados helped to boost One Caribbean Media (OCM) revenues and profit for the March quarter this year by 40.4 percent.
OCM better results came as profits for the 3 months climbed to TT$18.1 million up from TT$12.8 million in 2012, emanating from revenues which were up by 24 percent to TT$124 million from TT$100 in the prior year. Management, in a statement accompanying the results, stated that revenues were boosted by the state election in Tobago in January and general elections in Barbados and from acquisition of four radio stations that was completed in the third quarter of 2012. They however, caution that the second quarter will be tougher than the first but expect growth to continue. In 2011 profits after tax amounted to $12.3 million pretty similar to that earned in 2012. Second quarter earnings were $18.4 million last year and moved to $22 million in the September quarter as revenues rose nearly 18 percent in that quarter. Revenues for the six months were down by $5 million in 2012 versus 2011. Hence, it would appear that the radio station acquisition during the quarter impacted revenues and profit positively.
Results comparison | The recent results is lower than the amount earned in the December quarter of $21.4 million from revenues of $145.7 million as well as the amount earned in September 2012 of $21.8 million from revenues of $132.6 million. For most media houses the first quarter of the calendar year is not usually the best in either revenues or profit as advertisers take a more moderate position in the first quarter coming out of the high expenditure of consumers and expanded advertising during the Christmas period.
Profit 2012 | For the 12 months to December last year, earnings came to $74.75 million slightly up on the $69.45 million generated in 2011 from revenues of $495 million versus $451 million for non-interest income, an increase of 9.7 percent. However, gross profit rose by 14.6 percent to $178 million from $155 million in 2011, showing greater level of efficiency in generating income. Gross profit margin was 36 percent up from 34.4 percent in 2011.
Financial health | The company is in a healthy financial position, generating annual cash flows of more than $70 million per annum, some of which it is using to acquire other income generating assets. Cash inflows could rise in the current year as profit seems poised to climb above that of 2012. It boasts equity of $620 million with current asset ratio of more than 3 to 1 with cash funds of $188 million at the end of March. Funds are clearly being built up for further acquisitions.
The company announced that on March 26, 2013 its subsidiary, The Nation Corporation of Barbados, acquired a 51% interest in a small, innovative Barbadian renewable energy company with effect from January 1, 2013. This acquisition represents less that 0.4% percent of OCM’s net book value. It is unclear what impact, if any, this acquisition will have on the company’s results in the short term.
Forecast | IC Insider is forecasting profits of $95 million or $1.41 per share for the current year giving the stock a PE of 12.2 times earnings. Based on the Trinidad stock market PE ratio and Guardian which is at PE of 22, the stock is rated a buy for medium term appreciation as the stock price could double based on these comparisons.
[…] of IC Insider’s buy rated stock, One Caribbean Media moved to a new 52 week high as it closed up by 18 cents to end the day at $17.60 while trading […]