Profit jumps 71% at Mailpac

A big 33 percent surge in revenues, pushed profit at the late 2019 Junior Market listing, Mailpac Group, up an impressive 71 percent compared with what the business delivered in the March quarter last year. MailPac Group was formed late in 2019 and acquired Mailpac Services Limited and Mailpac Local Limited from Norbrook Equity Partners, majority shareholders, for the purpose of amalgamating both logistics platforms into one operating business.
For the March 2020 quarter, revenues hit $365 million, up from $274 million in 2019 while profit jumped to $102 million from $60 million in 2019. The revenue performance is stunning, having exceeded the $362 million generated in the busy fourth quarter last year with the usual strong Christmas demand.
Historically, the company enjoyed growth in revenues of 12.2 percent in 2017 and 25.7 percent in 2018. Revenues increased by 28.8 percent for the first half of 2019, with the full year rising 25 percent.
Before the acquisition, the businesses in 2018, revenues grew from $851 to $969 million in the first three-quarters of 2019. Net income for the periods was $213 million and $203 million, respectively.
Improvement in profit margin remains consistent at an attractive 50 percent in the March 2020 quarter.

Administrative expenses declined from $71 million in 2019 to $67 million in the latest quarter. Marketing and sales expenses declined marginally from $10 million to $9.9 million, despite the sharp rise in revenues. Finance and depreciation charges were modest. The company added to the fleet of vehicles after the quarter and this will result in a pickup in depreciation charges for the rest of the year.
The company generated $92 million in cash inflows, lifting cash at the end of the period to $194 million. At the end of March, shareholders’ equity stands at $456 million, with borrowings at just $25 million. Net current assets ended the period at $165 million, well over Payables of $72 million.
“We have substantially expanded our delivery infrastructure and have employed various in-store strategies to limit person to person contact”, Khary Robinson, the Executive Chairman, stated in his report accompanying the quarterly.
Earnings per share came out at 4 cents for the quarter and IC Insider.com projecting earnings of approximately 25 cents per share at the end of the fiscal year to December. The stock traded at $1.69 on the Junior Market of the Jamaica Stock Exchange at a PE ratio of 7 times 2020 earnings, and is heading to the $3 region during 2020.