Profit climbs 21% at Margaritaville

Revenue jumps 30.7 percent to US$1.7 million, in the first quarter, ending August and pushed up gross profit by 33.24 percent to hit US$1.267 million, as margin improved over the similar quarter in 2013, at Margaritaville Turks Ltd. It was not all good sailing for the second US dollar listed stock on the Jamaica Stock Exchange, as administrative cost climbed faster that revenues at 37.76 percent, and kept growth in profit to US$245,000, for a 21.18 percent increase.
Full year profit| For the current year, based on the growth in revenues so far, profits should climb to US$1.6 million, up from US$732,000 in twelve months to May this year and result in earnings per share of 2.4 US cents and put the PE of the stock at 4.6 making it an attractive buy currently. The standalone business depending on ships docking is not without added risk, a factor that investors should be cognizant of. The shares are not in great supply but there are offers ranging from 11 US cents to 18 cents but there has been no buying interest for weeks.
Construction of a new restaurant, is to commence in the second quarter of the financial year and end in the third quarter, to expand their offerings to customers.
Concerns| The company has little debt, but has a big jump in the amounts owing to creditors, growing from $716,000 to $973,000 while amounts owing by related companies to it, jumped sharply, from $424,000 to $987,000. This is not a good sign and there is not even an ounce of comment by management about this unusual buildup of these amounts. While all of this is happening, cash is down to only $4,000 from $58,000 a year ago.
Margaritaville is new to listing on the stock exchange, but they need to get a few things right. The prospectus stated that the shares would be listed on the stock exchange main market, the audited statement for 2014 says the same, and the current report repeats it as well. These are all incorrect as the shares are listed on the US dollar denominated market, which differs from the main market. The actual financial statement does not provide readers with the number of shares issued, this should be a part of the financial statement. The listing of the number of shares issued in the top 10 shareholders is not a part of the financials and investors should not have to look there for it.