Profit after tax due to the Jamaica Broiler’s shareholders, which was up 10 percent in the first quarter to August, is up 22 percent in the October quarter.
Profit was flat in the first quarter, before taking out losses due to outside shareholders of a subsidiary, and was 15 percent ahead of the 2012 second quarter period. The improved results flowed from increased revenues of 20 and 21 percent respectively in each quarter. For the half year, profit hit $324 million or 27 cents per share and in the October quarter, the company reported $184 million versus $151 million in 2012 or 15 cents per share in profits. With the Christmas period ahead, they are now into the best period for revenues and profit. IC Insider’s forecast is now at $1.50 earnings per share for the year, down from an earlier forecast, but cost savings are expecting from the acquisitions, particularly the US based one. Earnings should exceed $2 by 2015 fisscal year. The stock still remains Buy Rated.
The group enjoyed improved gross margins in the second quarter to 29 percent versus 23.4 percent in the first quarter and 26 percent for 2013 fiscal year that ended in April.
The group completed the acquisition of Hamilton Smokehouse and England Farms Inc. during the latest quarter, which resulted in increased income as well as increased cost. Administrative cost rose by 33.5 percent in the October quarter to $923 million and 23 percent for the year to October to $1.43 billion; distribution cost jumped in the last quarter by 39 percent to $335.7 million and 33 percent for the two quarters to $615.6 million. Those were not the only costs to rise, finance cost jumped by 20 percent in the last quarter to $88 million and by 35 percent in the year to date to hit $167 million.
Segments | Poultry sales rose 15 percent to $7.2 billion over 2012; Hi Pro sales which includes feeds was down 1 percent for the half year but ethanol fell 39 percent to $445 million; other operation category is up 75 percent while US operations show a 221 percent jump to $2.15 billion, partially reflecting the new acquisition in the quarter. Other income rose from $68 million to $86 million. Segment results came out at $436 million for poultry, up from $350 million in 2012; Hi Pro recorded $310 million down from $501 million in 2012; ethanol recorded $27 million, in 2012 a loss of $7.5 million was recorded; and the US operations recorded an impressive $202 million compared to only $19 million in 2012.
Balance Sheet | Fixed assets increased by $700 million net of depreciation charge over April due mainly to the acquisitions noted above; intangible assets increased by $455 million and goodwill by $133 million all due to the US and the Hamilton Smokehouse acquisitions. Inventories rose $300 million over the position as of April this year; biological assets moved up by $640 million and receivables and prepayments by $560 million. Cash funds are down $1.1 million at the end of October to $1.1 billion; loans however climbed by $400 million to $5.8 billion, this compares with equity of $10.3 billion. Current assets amounted to $9.2 billion and is well ahead of current liabilities of $5.3 billion, which is a slight deterioration from the level of $8.8 billion in April to $4.2 billion in current liabilities.
Jamaica Broilers Group is an IC Insider Buy Rated Stock.
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