There was very moderate activity on the Jamaica Stock Exchange at the close of the trading week as the prices of 10 stocks rose and 8 declined as only 25 securities traded in a very slow market session resulting in 1,571,377 shares trading valued at a mere $8,273,649.
Main Market| Six companies in the main and US dollar markets advanced and 6 declined as the indices moved down moderately with the JSE Market Index inching down by 6.80 points to 74,592.23 and the JSE All Jamaican Composite index shedding just 7.60 points to close at 82,115.83.
Gains| Stocks recording gains at the end of trading in the main market are Kingston Wharves with 9,534 shares to close with a gain of 48 cents at $5.99, National Commercial Bank gained 10 cents to close at $18.10 with 9,100 units changing hands, Proven Investments ordinary share, with 8,570 units to close up 0.02 us cents at 18 US cents, Sagicor Group 18,000 units closing at $9.80 for a 30 cents gain, Salada Foods 5,000 shares to close at $8 as the price gained 50 cents and Scotia Investments with only 700 shares to end at $23.10 for a gain of 10 cents.
Firm| There were only 4 stocks in the main market to close without a change in price as Cable & Wireless with 43,699 shares closed at 40 cents, Carreras with 5,000 units closed at $33.56, Jamaica Money Market Brokers 7.50% preference share traded 500,000 and closed at $2 and Proven Investments 8% preference share with 381,800 units closed at $5.07.
Declines| The stocks declining in the main market are Gleaner with 2,500 shares while falling a cent to close at $1.10, Grace Kennedy lost $1.49 to end at $56.51 with 1,600 shares, Jamaica Broilers exchanged 20,538 units to close down a cent at $4.85. Pan Jamaican Investment 10,529 shares to end 55 cents lower at $49.05, Scotia Group had 110,308 units at $20.50 at the close as the price shed 12 cents and Supreme Ventures 3,800 shares to close with a 5 cents decline at $2.05.
Junior Market| The JSE Junior Market Index declined by 8.14 points to close at 751.34 as 9 stocks traded with 4 advancing and only 2 declining.
Gains| Stocks recording gains at the end of trading in the junior market are AMG Packaging that traded 5,560 units to close at $3.50, up by a cent, Access Financial with 72,600 units to close at $11.50 with a gain of $1.50, Caribbean Cream 3,000 units to close at 79 cents with a 4 cents increase and Caribbean Producers with 90,000 units in closing at $3, up 2 cents.
Firm Trades| The 3 stocks in the junior market traded to close at the same price as the day before are Blue Power with 3,400 shares in closing at $9.01, Lasco Financial 3,000 shares while closing at $1.20 and Medical Disposables 94,700 units, closing at $2.04.
Declines| Stocks declining in the junior market at the end of trading are General Accident with 2,000 units a $1.60, down 10 cents and Lasco Manufacturing with 166,439 shares to end down by 10 cents at $1.10.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 3 stocks with the bid higher than the last selling price and 4 stocks with offers that were lower.
Very moderate market movement
Blue Power profit slips
Blue Power profits slipped for the quarter to January this year as the profit margin got squeezed resulting in profit of $15 million compared to $23 million in the same period in the previous year. The Lumber Depot division contributed under $8 million and the Blue Power division added just over $7 million to the profit.
Profits for the nine months stood at over $70 million compared to $67 million in the same period last year, an increase of just over 5 percent. The contribution of Lumber Depot division was over $37 million, while Blue Power division added $33 million.
Earnings per stock was $1.25 for the nine months compared to $1.18 in the previous year.
Sales for the nine months ended January, 2014 were $780 million compared to $706 million for the same period last year, an increase of $74 million or 10 percent. For the period, sales for the Lumber division amounted to $543 million versus $466 million the previous year, an improvement of 16 percent while Blue Power soap division remained basically flat with sales of $237 million against last year’s $239 million.
Sales for the quarter ended January this year were $259 million versus $266 million for the comparative period in 2013. For the third quarter, Lumber Depot division achieved sales of $176 million versus $178 million the previous year, while Blue Power moved down from $88 million to $83 million.
Reasons for fall | “Small declines in sales in both divisions reflect the tightness in the economy, which is being experienced by our customers, and which has also resulted in downward pressure on prices and margins. Our response to these challenging economic circumstances is to focus on keeping, as much as possible, a lid on price increases, reducing costs especially by investing in solar technology, improving packaging and quality to get greater market share, introduction of new products and bulk-buying to obtain better prices.” the company’s management stated in their release to shareholders.
Blue Power was able to hold administrative cost slightly below that of 2013 at $34.5 million for the January quarter. In 2013, cost in this area was $35.7 million and in the nine months $99.4 million, which fell to $96.8 million in 2014.
Other revenues almost doubled from $5.7 million to $10.8 million for the nine months and helped to keep profits up.
Margins | Gross profit slipped to 22.17 percent in the latest quarter from 28 percent in the 2013 period and ended pulling down the year-to-date margin to 25.54 percent compared to 30 percent enjoyed in 2013 and 28.6 percent in the full year to April 2013.
It is quite likely that with government slashing the fiscal deficit from $54 billion in 2013 fiscal year resulted in increased tightness in the economy. Much of the measures that led to the wiping out of the fiscal deficit would have been increased taxes and a sharp cut in interest cost. There is no new tax take for the 2014/15 fiscal year and the economy should be freer to function with some amount of growth. As such, the environment should start to look better in the latter part of this year for companies such as Blue Power.
Finances | The company’s finances are in a very healthy state with no borrowed funds and working capital increasing to $356 million from $302 million at the end of April 2013. Cash funds on hand amounts to $133 million. Amounts due to creditors is only $59 million. while receivables amounts to $77 million but inventories are at $203 million up from $177 in April 2013.
Stock outlook | At the time of writing, the stock was in strong demand by one broker at the $9 level. The weakness shown in the latest quarter sends cautionary signals which may be temporary. We see the current quarter continuing to reflect some of the weakness of the January quarter and we are forecasting earnings of $1.50 per share for the year ending April 2014 and $1.80 for the 2015. We leave the stock as a cautious Buy Rated around the $9-10 region based on the tendency for limited supply and strong current demand for it.
Related posts | Blue Power profits continue up | Blue Power profit up 20%
Blue Power profits continue up
Blue Power recorded 33 percent increase in sale revenues to $275 million for the October quarter this year compared to $208 million for the same period last year. The Lumber Depot division achieved sales of $191 million versus $135 million the previous year, an improvement of 42 percent while the Blue Power Soap Division saw sales moving up from $73 million to $84 million for an increase of 15 percent.
Profits for the quarter came in at just over $25 million compared to a shade under $19 million in the same period last year, an increase of 34 percent. The contribution of Lumber Depot contributed over $11 million, improving by 80 percent over the same period in the previous year while Blue Power division added $14 million which was an improvement of 10 percent over the second quarter of 2012. Earnings per stock unit improved from 33 cents to 45 cents in the quarter, an improvement of 36 percent.
Sales grew 18 percent for the six months ended October to $521 million compared to $440 million for the same period last year of which the Lumber Depot division contributed $367 million versus $289 million the previous year, an improvement of 27 percent while the soap division moved up from $152 million to $154 million, an increase of only 2 percent.
Profits increased by 26 percent for the six months to $55 million compared to $44 million in the same period last year. $29 million of the profit for the half year came from the Lumber division for a strong 49 percent increase over the same period in 2012 while Blue Power contributed $26 million which was an improvement of 8 percent. Earnings per stock unit moved from 77 cents to 98 cents in the period, an increase of 27 percent. IC Insider is forecasting earnings for the full year to April 2014 at $2.30 per share and $2.85 for the 2015 fiscal year. The stock remains BUY RATED.
Cost | The group has been able to keep administrative cost under control with figures for the six months showing a slight fall of $1.4 million to end at $62.3 million, while the latest quarter saw a rise of $3.8 million to $34.3 million, a 12 percent increase.
With the shift of increased sales to lumber division, margins shanked in the October quarter to 26.3 percent from 30.3 percent in 2012 and for the year to date 27.3 percent versus 31.2 percent in 2012.
Finances | The group was in a strong position at the end of October with cash funds $126 million, which is down from April’s $145 million, but more funds are now reflected in receivables and inventories which are up by $30 million and $22 million respectively. At the same time payables declined by $11 million. Shareholder’s equity rose to $392 million at the end of the latest quarter.
Blue Power is an IC Insider Buy Rated Stock
Related posts | New additions to Buy Rated stocks | Blue Power profit up 20% | Blue Powered huge profit increase
Blue Power profit up 20%
Blue Power reported profits for the quarter ending June 2013 of $30 million compared to $25 million in the same period last year, an increase of 20% and earnings per stock unit moved from 43 cents to 53 cents in the quarter, an improvement of 23%. While the growth is not bad, the operation was not firing on all cylinders as the increase came totally from the Lumber Depot division which contributed $18 million, improving by 34% over the same period in the previous year, while the Blue Power division added $12 million which was an improvement of 5% over the first quarter of 2012.
Combined sales were $246 million compared to $233 million for the same period last year, an increase of $13 million or just 6% much less than the increase in profit. The Lumber Depot division achieved sales of $175 million versus $154 million the previous year, an improvement of 14% while the Blue Power soap division moved down to $70 million from $79 million for a decrease of 11%. It was not only increased revenues which helped to grow profit for the quarter. Administrative cost was down from $33 million in 2012 to $27.9 million due to a write back of doubtful debt that was made in the last fiscal year to April and non-accrual of certain expense that was made in 2012 but not repeated in this latest quarter. Also, other income almost doubled from $2.2 million to $4.26 million.
The chairman Dhiru Tanna, in a release with the quarterly report stated that “we are pleased that despite the very challenging economic circumstances facing the country we were able to achieve an improvement in the overall performance. During the quarter, the Blue Power soap division faced serious competition in the market place with wholesalers and distributors shaving their prices significantly to reduce inventories. As a result, our ability to adjust prices in keeping with the exchange rate changes was seriously hampered and our sales actually declined. We have taken steps to offer more vendor-friendly packaging as well as significant promotions which we hope will reverse the trend.”
He went on to say, “We continue to take advantage of our cash position to acquire inventory for resale at advantageous prices which is the main reason for the increase experienced in this category on the balance sheet. Our analysis indicates that this approach is essential to remain competitive in a very stagnant market.”
Finances | Since the April year end, cash has increased to $153 million from $145 million but inventories are up to $198 million from $176.85 million. Accounts receivables has remained flat at $69 million. Amounts due to creditors amounted to $88 million the same level as in April. Equity capital amounted to $375 million and there is no longer any loan capital being used.
Insider call | Blue Power is an IC Insider Buy Rated stock.
Related Posts | Blue Power dividend | Blue Powered huge profit increase
JSE: Reports of insider trades
Latest reports of trading by connected parties: Updated as of 22 July 2013
Kremi | Three directors bought a total of 121,141,794 shares and sold a total of 121,832,193 Caribbean Cream Limited shares during the period July 16 – 18, 2013. Scoops Unlimited which had owned 121,144,794 shares was the seller on the 16th of July with the amount being split in two equal amounts of just over 60.57 million each.
Blue Power | A party connected to Blue Power sold 5,979 of the company’s shares. So did two senior managers who sold a total of 69,393 shares and a director who sold 303,916 during the period June 25, 2013 – July 14, 2013:
Mayberry Investments | A party connected to Mayberry Investments Limited purchased 48,559 of the company’s shares during the period July 15 – 17, 2013 and a related party purchased 100 shares of the company on July 18, 2013.
Sagicor Life Jamaica | Advises that two of its executives purchased a total 790,874 of the company’s shares during the period July 11 – 12, 2013. This could be a significant indicator of good profits ahead and is therefore worth watching.
To view our last report of insider trading dated 4th July 2013, click here.
Blue Power dividend
Blue Power Group Limited declared a dividend of 15 cents per share payable on August 16, 2013 to shareholders on record as at July 31, 2013. The ex-dividend date is July 29, 2013.
The company last paid a dividend of 10.5 cents per share on September 6, 2012. The latest dividend is in keeping with the rise in profits to $1.84 per share compared with the earnings of 83 cents in 2012.
The board also agreed to introduce a resolution at the next Annual General Meeting to modify the Articles of Association to permit the appointment of two more directors to the Board which consists of six members at the present time.
To know more about Blue Power, read Blue Powered huge profit increase posted 16th June 2013.
Insider trades
A director of Lasco Distributors Limited sold 200,000 of the company’s shares on June 14, 2013.
A director of Lasco Manufacturing Limited sold 200,000 of the company’s shares on June 13 & 14, 2013
Blue Power Group Limited advised that two senior managers sold a total of 159,995 shares during the period June 17 – 21, 2013.
Scotia Group Jamaica Limited advised that a senior manager purchased 2,792 SGJ shares on June 24, 2013.
A senior manager of Sagicor Investments Jamaica advised that they sold 20,000 S shares on June 21, 2013.
A related party to Honey Bun (1982) advised that they sold 5,000 Honey Bun shares on June 25, 2013.
Blue Powered huge profit increase
A Junior Market stock should hit the roof next week as the company Blue Power not only reported record profits, it blew away last year’s results with a stunning 121 percent increase as revenues rose by just 22 percent for the year ending April.
Profits for the financial year stood at $104 million compared to $47 million in the same period last year, an increase of 121 percent. The Lumber Depot division contributed $61 million to the profit, improving by 111 percent over the previous year while the soap division accounted for $43 million, an improvement of 137 percent over the previous year.
The results translate to return on equity of an attractive 35 percent up from 21 percent in 2012. The net asset value is $6.11 and the stock price of $8.65 is less than 1.5 net book value.
Combined sales for the year ended April, 2013 were $1.045 billion compared to $863 million in 2012, an increase of $182 million or 21 percent. For the year, the Lumber Depot division achieved sales of $742 million versus $620 million the previous year, an improvement of 20 percent while the Blue Power soap division moved to $303 million from $243 million, an increase of 25 percent.
April quarter | For the fourth quarter sales rose to $339 million compared to $224 million for the same period last year, an increase of $115 million or 51 percent. Comparing the fourth quarter with the same period last year, the increase in sales for the Lumber Depot division was 77 percent, from $156 million to $276 million while sales for the Blue Power soap division actually declined by 6 percent.
Revenues for the 4th quarter was by far the best of any of the quarters with the December quarter coming closet with revenues of $267 million. The percentage revenue increase was also the best with a 13 percent increase in the December quarter coming closest. The latest quarter profit was the highest of any quarter with July and December quarters coming closest at $24.7 million and $23.2 million respectively.
Management’s comments | In commenting on the results, management said “The extraordinary enhancement in both sales and profits in the Lumber Depot division was due to two main factors: the first and most important being the award of a significant supply contract by an international agency and the second being the strategic management of our purchases of materials for resale. The overall increase in sales and profits of the Blue Power soap division was achieved largely as a result of a significant increase in sales of bathing soaps which are slowly but surely gaining acceptance in the market place.
As a result of the substantial improvement in profits, our balance sheet is healthy which will allow us to expand as well as be in a position to make adequate purchases of materials for resale and raw materials for manufacturing at reasonable prices.”
The company’s finances is in a healthy position with virtually no debt. Current assets of $390 million of which cash is $145 million up from $58 million in 2012. Current liabilities is $88.5 million.
Investor’s Choice is forecasting 2014 earnings close to $3 per share.
Update Wednesday 19th June | The Board of Directors of Blue Power Group Limited will meet on Thursday, June 27, 2013 to consider the payment of a dividend.
