One Great Studio was the last junior listing for 2023 with a $1 per IPO price in September 2023, following an oversubscription, with the price reaching a high of $1.15, but last traded at 81 cents on Friday with a PE ratio of 8 times 2024 projected earnings.
The price recently slipped to a low of 70 cents, following a 55 percent drop in first quarter profit to $10 million from $23 million in 2023, following a 21 percent fall in revenues from $115 million in 2023 to $91 million.
Even as revenues declined, the cost of sales rose marginally from $55 million to $56 million, plunging the gross profit margin down to 38.3 percent from 52.2 percent in 2023 and gross profit down sharply from $55 million to just $35 million.
In the first quarter of this year, the company served 88 clients, down from the 96 in 2023 the report to shareholders states.
The Shareholders’ Report & MD&A stated that “the decline in performance year over year was a result of various market factors that impacted our Search Engine Optimization business segment, leading to a temporary contraction.” From all indications, this seems to have stemmed from changes made by Google.
Administrative and general expenses grew by 19.3 percent or $3.4 million to $21 million for the period, that Management states “primarily reflects our ongoing investment in enhancing service delivery and operational efficiency.”
The company’s principal activities involve the provision of search engine optimisation, web design and development and software development services, with clients based in Jamaica, the wider Caribbean and other countries generating revenues of $461 million, 93 percent higher than $239 million in 2022 and reported profits of $79 for the year compared with just $28 million in 2022, after taxation of $19 million in 2022 versus $8 million in the prior year.
Djuvane Browne, Managing Director.
Cash flow generated by operations amounts to $18 million and ended at $19 million pushing cash funds to $50 million from $54 million in 2023.
Current Assets stood at $326 million at the end of March 2024, up from $178 million at the end of March 2023 while Current liabilities ended at $45.4 million down from $56.7 million at the end of the same period in 2023
Shareholders’ Equity amounts to $603 million at the end of March 2024, up from just $181 million a year ago, with profit and proceeds from the IPO boosting the shareholders’ capital. Long term loans fell from $286 million to just $19 million.
The company is looking to add other services by way of a possible acquisition in the future to benefit from synergies.
