Q4 profit doubles at Tropical Battery

Recently listed Tropical Battery saw profit after tax soaring 107 percent in the September quarter, to $27 million from $13 million in 2019, bettering the nine-month increase of 18.6 percent over the 2019 period for pretax profit. For the year to September, profit rose a more modest 16 percent to $73 million from $63 million in 2019.
Sale revenues
rose just 2.6 percent for the quarter, to $506 million from $493 million in 2019, but rose 7 percent for the year to date, to $1.87 billion from $1.74 billion in 2019.
The September quarter benefited from improved profit margin to 31.8 percent from 29.9 percent in 2019 and rose to 31.3 percent for the year, from 30.2 percent for 2019. Gross profit rose 9 percent in the quarter to $161 million from $147 million in the previous year and increased 11.2 percent for the year, to $585 million from $526 billion in 2019.
Administrative expenses grew 11 percent to $123 million in the quarter and 10.5 percent in the year period to $456 million. Finance cost rose in the quarter, to $13 million from $9 million in 2019 and $19 million to $38 million for the year.
Gross cash flow brought in $109 million but growth in receivables, inventories, addition to fixed assets offset by loan inflow, proceeds from the sale of shares and reduced payables, cash funds ended at $261 million. Net current assets ended the period at $827 million, including trade receivables of $314 million, amounts due from related parties at $177 million and cash and bank balances noted above. Current liabilities closed the period at $229 million. At the end of the year, shareholders’ equity stood at $776 billion, with borrowings at just $415 million.
“As a part of our Strategic 2021 Growth Plan, we will be focusing on creating shareholder’s value through acquisitions and partnerships of aligned profitable companies in Jamaica and across the Caribbean region. To this end, we have entered into discussions with several key partners to assist in identifying suitable acquisition targets”, March Melville, Chairman and Alexander Melville, Managing Director, stated in a jointly signed report accompanying the quarterly.
Earnings per share after tax came out at two cents for the quarter and six cents for the year. The company’s net asset value is 68 cents, with the stock selling at 76 percent above book value. With the company profits now being free of taxation, having listed on the Junior Market of the Jamaica Stock Exchange, earnings are adjusted to 8 cents, giving it a PE ratio of 15 times earnings, based on the stock price of $1.20 the traded at on Friday. IC Insider.com is forecasting 10 cents per share for a PE of 12 times 2021 earnings.

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