Revenues jump at Express Catering

October 31, 2024 by

Revenue grew an impressive 20.7 percent to US$25,590,638 from $21,198,904 in 2023, with profit before taxation falling by 37.9 percent from $2,938,003 in 2023 to $1,825,441 and profit after tax dropping 76.9 percent to $1,408,276 from $2,702,227 for the year to May 2023 at the Montego based Express Catering.
Results for the August 2024 first quarter saw revenues rising marginally to US$6.5 million compared to US$6.4 million in 2023, with net profit for the Quarter climbing 18.6 percent to US$1.0 million for an EPS of 0.062 US cents per share, compared to a net profit of US$843,114 for an EPS of 0.051 US cents per share in the similar period in the prior year, with an increase spend rate rising by 9.83 percent, the company reported. The quarterly results would have been negatively affected by a falloff in traffic passing through the Jamaica’s busiest airport during the quarter.
For the latest quarter, gross profit rose 5.4 percent to $4.54 million from $4.3 in 2023, as cost of sale declined from $2.1 million down to $1.94 million. Administrative expenses fell from $2.13 million in 2023 to $1.85 million in 2024, Depreciation climbed by 41 percent to $941,539 from $666,526, following the establishment of addition outlets at the Sangster International Airport and finance costs rose from $536 million to $641 million. There was no provision for taxation in either periods.
The performance would be vastly better had the company been compensated for lending a large sum to related group companies. Amounts outstanding continue to climb and sit at US$17 as of August according to the latest interim accounts and jumped from US$12.47 million at the end of May 2023.

For the 2024 financial year, the cost of sales rose by 14 percent, slower than the growth in revenues, with the cost climbing to $8,470,019 from $7,432,646, resulting in a Gross profit of $17,120,619, up by a respectable 24.4 percent over $13,766,258 in 2023.
Promotional expenses for the year jumped 246.5 percent to $41,449 from $11,962, while Administrative expenses climbed 50 percent from $5,883,155 to $8,819,337. Depreciation climbed by 16.2 percent to $3,153,325 from $2,714,003.
Profit before interest expenses and taxation amounts to $5,106,508 for the fiscal year to May, compared to $5,157,138 in 2023
Finance costs jumped 44.5 percent to $3,257,186 from $2,253,791, Income tax climbed 47.9 percent to $417,165 from $235,776 in 2023.
The directors in their report on the August quarter stated that “Cost of ingredients as a ratio of revenue improved appreciably for the Quarter, registering a 2.82 percentage point improvement to close at a ratio of 29.96 percent, compared to 32.78 percent for the same period in the prior year. The company successfully implemented wide ranging price increases across most concepts beginning in August 2024. We are assessing any impact on volumes and expect to see the full impact of that change in the second Quarter. The expectation is for an additional 1.5 percent improvement in the COS ratio due to the price changes.”
The directors went on to state, “In June 2024, the national minimum wage was increased by 5.38 percent. This contributed to the overall 11.39 percent increase in the salaries and wages component of administrative costs for the Quarter. Other noteworthy cost increases were in utilities and insurance. There were savings in occupancy costs due to the increase in the minimum guaranteed rent. The lease liability and the underlying right-of-use assets were already adjusted to account for the increase. There were also some savings in franchise fees as well due to the change in the spread of revenue amongst proprietary vs franchised brands during the Quarter.”
Current assets ended the period at $18.75 million including $17.4 million due from related companies and cash and bank balances of $90,853. The related companies should not be treated as current as the amount has been climbing for several years. Current liabilities ended the period at $8.3 million. At the end of August, shareholders’ equity amounts to $8 billion with long term borrowings at $40 million including lease obligations of $14 million and short term loans at $3.5 million.
The company was able to resume dividend payments. An interim dividend of US0.0306 cents per share for a total of US$501,075 was paid on August 30, 2024. A second interim dividend of a similar amount was declared for payment on October 31.
ICInsider.com projects 40 Jamaican cents per share for current years’ earnings and 65 cents for 2026, with a PE ratio of 8 at the last traded price of $3.28, compared to the market average of 12.2. The stock is undervalued but management has not treated the minority shareholders equitably and this needs to change.

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Upped capital spend for Caribbean Producers

June 21, 2023 by

Capital spend is set to expand at Caribbean Producers (CPJ) following approval of the Board, the company stated in a recent release with plans for “three major projects that will positively impact the growth and further development of the Company both locally and offshore” the release from the company stated.

Caribbean Producers

The plans include a U$1 million solar expansion project, with installation to commence in the first quarter of the 2024 financial year that starts in July, US$2.3 million modernization of the Meat Processing Plant, with work to commence in the first quarter of 2024, both projects will reduce operating cost. CPJ will be expanding its Operation in St. Lucia with a new store, with Operations to begin in the second quarter of the financial year 2024.
The proposed capital spend comes on the heels of a profitable nine months for the company recovering from fallout in revenues and profit during the covid-19 pandemic. For the three months to March, revenues rose 28 percent to US$35.7 million versus US$28 million in 2022 and climbed 24 percent to US$107 million for the year to March, over US$86.4 million for the similar period in 2022.
The March quarter saw cost of sales rising slightly faster than revenues, with an increase of 30 percent to US$25.3 million from $19.5 million, with a gross profit margin of 29 percent, down from 31.2 percent in 2022. For the nine months, it also rose faster than sales with an increase of 28 percent to US$75.3 million from US$58.8 million and resulted in a gross profit margin of 29.7 percent, down from 31.5 percent in 2022, negatively impacting profits.
According to  management, “We expect growth in revenue and margins going forward will translate to improved company performance.”

Caribbean Producers

Profit before tax declined sharply for the March quarter by 65 percent from US$$1.8 million to US$636,974 after accounting for a one-time charge of US$1.45 million in the third quarter relating to GCT assessment, dragging profit down to a mere US$226,000 after tax, attributable to the company’s shareholders of and down 49 percent to US$3.6 million for the nine months compared to US$6.8 million earned in 2022. For the nine months, profit before tax declined 34 percent to US$5.2 million in the current year, from US$7.9 million for the similar period in 2022, but it declined a smaller 16 percent, excluding the one-time charge for GCT. Selling and administrative expenses rose sharply by 24.7 percent in the March quarter from US$5.2 million in 2022 to $6.5 million in what management stated was due to increased staffing to position for further growth, the increase negated the improvement in the gross profit. For the nine months, the cost in this category increased 33.6 percent to US$19.6 million from US$14.7 million in 2022. That was the area of significant cost increase that depressed profits for 2023. But profit before tax would have increased to US$2.8 million when the charge for GCT is excluded compared with US$2.6 million in March 2022 quarter and US$9 million versus US$10 million.

At the end of March, shareholders’ equity stood at US$26.7 million, up from US$22.4 million at the end of March 2022 and US$23.2 million at the end of the June 2022 fiscal year. The company continues to be heavily leveraged with borrowings of US$40.5 million, of which US$9.8 million is short term and due to be repaid within twelve months.
Current assets stood at US$62 million at the end of March versus US$62.5 million at the end of June 2022 and just US$25.3 million as of March 2022. Cash and equivalents were US$4.9 million, up from US$3.9 million at the end of the 2022 fiscal year, with receivables at $18 million, virtually flat with the fiscal year end. Still, inventories slipped to US$39 million from US$40 million at the end of the fiscal year but are up over March 2022 at $30 million.
Current liabilities stood at US$25.4 million at the end of March versus US$46.75 million at the end of June 2022 and US$25.3 million as of March 2022.
CPJ is the dominant company within the hospitality sector. The expected continued expansion in the hotel rooms should be fertile ground for continued growth in revenues and profitability over the next few years. The company is highly leveraged, which is a huge negative, especially when business declined, as it did during the height of the COVID epidemic, curtailing sales in 2021 and 2022.
The company reported 0.02 US cents in earnings per share for the March quarter compared to 0.14 cents in 2022 and 0.33 US cents for the half year to March 2023 versus 0.62 cents in the prior year. As indicated above, ongoing earnings per share are better than the numbers suggest. The US$1.5 million written off for general consumption tax assessment is not an ongoing expense. As such, it should be excluded from earnings in valuing the company’s shares to assess ongoing earnings capabilities better. In addition, the tourism trade did not return to normal capacity compared to 2019 until the start of 2023, as such, the first two quarters of this fiscal year are based on lower business levels than is the norm and the 2024 fiscal year should reflect a better outcome as a result.
IC insider.com forecast earnings of J$1.35 per share for the June 2023 fiscal year and J$2.50 in the next fiscal year, with the stock currently at $9.46 on the Main Market of the Jamaica Stock Exchange with a value of 7 times the current years’ earnings. Investors can expect a period of continuing growth in the share price over the next 12 months as a result of continued improvement in profitability and lower interest rates in the coming months.

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Consolidated Bakeries turnaround

April 19, 2023 by

Consolidated Bakeries seems to be on the mend, with 2023 looking like the year it finally comes into its own having posted the first full year profit in 2022, the first since 2018, with sales exceeding the billion mark for a second consecutive year and the third time in four years.

Anthony Chang, Managing Director of Consolidated Bakeries

Purity, a name the company is also well known by, reported profit in three of the four quarters last year with profit in the first two quarters as well as in the December 2022 quarter but reported a $14.5 million loss in the third quarter even with revenues in that quarter being the same as the final quarter at $323 million.
The improved 2022 profit performance evolved from a 26.5 percent rise in revenues to $1.37 billion for the full year above the $1.079 billion in 2021 with profit after taxation coming in at $14 million compared to an $18 million loss in 2021. Pretax profit was even more impressive being $17.7 million versus a loss of $21.7 million in 2021 resulting in a $38 million turnaround.
The improved results show up in a strongly transformed financial position resulting in an enhanced working capital position even as sales surged, with a buildup of cash and reduction in borrowed funds.
Revenues climbed 30 percent in the March quarter, from $291 million last year, to $378 million and rose a stronger 42 percent in the June quarter to $342 million from $241 million in 2021. At the same time gross profit margin that tends to hover around 39 percent rose to 42 percent in the second quarter, from 38 percent in 2021. For the six months, revenues were up 35 percent to $720 million from $532 million in 2021 while gross profit rose 41 percent to $292 from $207 million. The Easter period provides added revenues for the company, resulting in the first half of the year producing higher revenues and profit than the second half.
In the first quarter, profit before tax rose 61 percent to $14.5 in 2022, from $9 million last year and is up 200 percent in the second quarter to $13.5 from a loss of $13.4 in 2021. For the half year pretax profit surged 735 percent to $28 million from a $4.4 million loss in 2021.
The company generated a gain on other comprehensive income from investments of $783,279 for 2022 and $6.3 million for 2021.
Administrative and other expenses rose by just 6 percent to $266 million from $250 million in 2021. Selling and Distribution expenses increased by a robust 33.4 percent to $203.4 million in 2022 over that of 2021 with $152.5 million. Depreciation rose 8 percent to $35.6 million from $33 million in 2021. Finance cost jumped sharply to $16.3 million from $11.7 million in 2021.
The company’s finances are looking much better in 2022 than in 2021. Operations for the half year generated gross cash flow from operations of $118 million after changes in working capital, allowing it to fund the acquisition of fixed assets amounting to $63 million to end the year with an increase in cash of $57 million.

Consolidated Bakeries Miss Birdie Easter bun.

Shareholders’ equity stood at $697 million, while Long term borrowings ended the period at $136 million and short term loans at $51 million, representing a $47 million reduction from December 2021 and resulting in cash and bank balances and investments rising to $99 million, from $90 million at the end of December 2021. Current assets ended the period at $293 million, with trade and other receivables standing at $115 million, compared to $110 million in 2021. Inventories rose moderately to $79 million from $67 million in 2021. Current liabilities ended at $237 million, up from $175 million at the end of December 2021 and net current assets ended at $56 million compared with $93 million at the end of the previous year.
In the past the big concern was the ability of the company to hold on to the profit made in the first six months in the second half of the year, this changed in 2022 as revenues benefitted from increased volume sales as the company made headways into new areas as well as some new products. In an interview with Managing Director, Anthony Chang in 2022, he stated that while new products helped sales, in some cases traditional products found new takers in areas of the country where demand was not as strong in the past. Chang also stated that they are now benefiting from some changes made in personnel that is delivering improved results, he also indicated expansion of the distribution channel into smaller stores while consolidating business in the bigger stores. They also placed focus on cost by employing a cost accountant.
Retooling played an important role in the gains but Chang say this is a work in progress. According to him, bread at one stage in the past accounted for 90 percent of sales, was in direct competition with the market leader and had low profit margin, but it took time to make the shift as new machinery was needed to effect the change to new products, that needed machinery for packaging these products. The company has been adding to fixed assets as a part of the drive to have the right machines and in the quantity required to churn out new products.
Based on the above ICInsider.com projects this year’s earnings per share of 40 cents and 75 cents for 2024 with the company benefitting from full recovery of the local economy and increased efficiency and reduction in interest cost as borrowings decline.
The company has a net book value of $3.07. If achieved, the PE ratio currently would be 6.3, based on the price of $2.50 the stock traded at on the Jamaica Stock Exchange Junior Market on Friday.

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Margaritaville flat profit, growth coming

October 28, 2018 by

Margaritaville Turks traded 531,220 shares at 20 US cents on friday

Margaritaville posted flat profit for the first quarter of the May 2019 fiscal year, with net earnings of US$290,815, down slightly from US$296,412 in 2017.
Revenue was also down moderately to $1.8 million, from $1.86 million in the 2017 period, but growth should be coming when Carnival Lines expands the port facilities in Turks and Caicos in 2019.
Cost declined modestly, with direct expenses falling to $471,386 from $483,803 in 2017, resulting in a gross profit margin of 74 percent, while administrative and other cost declined to $1.057 million, modestly down from $1.082 million in the prior period in 2017.
Earnings per share came in at 0.43 cents. For the full year to May 2018, earnings per share was 1.58 cents resulting from net profit of $1.067 million. The stock trades on the Jamaica Stock Exchange US market at 25 US cents at a PE of 16.
Equity capital stood at $5 million while current assets amounted to $2.7 million with current liabilities of $1.1 million.

Ian Dear Chairman

Going forward Chairman Ian Dear, told IC Insider.com that Carnival Line is expanding the docking facility in Turks and Caicos Islands that will allow much larger ships to dock and will result in increase in the number of passengers landing and will bring more business for the company. According to Dear, the ships currently in use can accommodate up 3,000 passengers plus crew but the newer ships will carry 8,000 passengers and they could have two of these ships on a typical day. The expectation that the first ship should dock in Turks next year. The coming on stream of the increased business will see Margaritaville adding another restaurant, with construction to commence shortly after carnival advises them of date the news ships will commence operations.

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Prestige profit slips & slides

October 15, 2018 by

Prestige Holdings brand – TGIF

Profit at Trinidad’s fast food franchise operators, Prestige Holdings fell a sharp 35 percent to TT$7.7 million for the quarter ending in August, compared to $11.8 million for the similar period in 2017 as economic pressures continued to affect the Twin island state of Trinidad & Tobago, where the bulk of the income is generated.

The operation includes, Prestige Holdings’ of KFC, Pizza Hut, Subway and Starbucks, Weekenders Trinidad Limited (TGI Fridays Trinidad) and Prestige Restaurants Jamaica, (TGI Fridays Jamaica).
Revenues slipped in the quarter to $268 million from $273 in 2017 quarter, dragging down gross profit to $90 million versus $95 million in the 2017 period, as cost of sales remained flat at roughly $178 million in both periods.
For the nine months to August, revenues increased a mere 1 percent to $790 million and profit after tax declined 24 percent to $21 million, from $27.7 million in the previous year. For the 2017 fiscal year, the company reported $32.9 million in after tax profit, from revenues of $1.04 billion.
Earnings per share for the nine months ended at 34 cents compared to 45 cents for the same period in 2017. The results were generated from an average number of 123 restaurants, the company stated in a release with the quarterly results.
Other operating expenses were flat in the quarter but rose moderately, by just $5 million to $170 million for the nine months. Administrative expenses edged up slightly, in both the quarter and year to date period, to $20.6 million from $20 million and from $61 million to $63.7 million respectively.
According to the Chairman, Christian Mouttet in his report to shareholders, “our less than stellar performance for the nine months of 2018, as mentioned in my Half Year Report, has been driven primarily by higher costs, a still recovering local economy and consumers who are very price and value sensitive. As mentioned then, we are implementing initiatives and making changes to our operations that over time will improve our performance and strengthen our business. Additionally, we opened our tenth Pizza Hut restaurant in Princes Town on 1 October 2018.”
“We do not anticipate any significant changes in the macroeconomic environment in the short term and expect to finish the year broadly in line with the previous nine months.”
The Board approved an interim dividend of 12 cents per common share (2017 – 14 cents) to be paid on October 31.
Prestige closed the period with shareholders’ equity of $290 million, Current assets of $131 million and Current liabilities of $131 million. Non-current liabilities amounted to $54 million. The stock closed at $7.52 or a PE ratio of 17 on the Trinidad & Tobago Stock Exchange on Monday.

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Where are the 1834 Investments results?

July 5, 2016 by

Gleaner & RJR execs signing merger agreement earlier in 2015

Gleaner & RJR execs signing merger agreement earlier in 2015

The rules of the Jamaica Stock Exchange require, listed companies to submit quarterly interim financial report within 45 days of each quarter. In the case where a company opts to release an audited account within 60 days of the year-end, they can opt in lieu of a quarterly report within 45 days.
1834 Investments Limited (formerly The Gleaner Company Limited) did not release the usual December quarter report as such investors have been deprived of important information on the company. The stock exchange has fallen down badly on this one in not requesting it. No good reason has been given why it was not released.
Apparently the exchange regulatory arm expected that the 15 months report to March this would have been released to let the matter go away but it has not. First out of the block towards the end of May, 1834 Investments advised the Jamaica Stock Exchange that the Audited Annual Financial Accounts for March, 2016 will be late and unavailable for publication by May 30, 2016. 1834 anticipates that it should be available for publication on or before June 30, 2016. Bad news for investors and bad news for the capital market. The matter gets worse, the end of June has now gone and with July well advanced but there are no results released and no advisory on the JSE website or in the newspapers as to the new deadline. Nearly seven months have elapsed since the last report was released.
In the past several companies have changed their year end, as recently as late last year Desnoes & Geddes and Access changed their but provided investor with results for all relevant quarters, but the Gleaner Company who changed theirs to March from December did not do so.
It is well past the time for the Jamaica Stock Exchange act to protect the investing public.

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Cargo Handlers’ Q4 profit doubles

January 1, 2015 by

CargoHandlersLiquidBulkCarriersProfit for the September quarter at Cargo Handlers is up 117 percent over the 2013 results to $49.7 million from revenues that climbed a very strong 77 percent. Profit rose by a smaller 55 percent, for the nine months ending September this year, to $131.7 million or $3.52 per share from revenues for the nine months of $220 million.
Other income, mainly foreign exchange gains, fell 13 percent in the quarter and was flat for the year, at $16 million. During the year the company earned $13.6 million from leasing and $8.9 million from management fees charged to a related party – Bulk Liquid Carrier and Petroleum Transport Ltd.
Administrative expenses dropped 31 percent in the quarter and 9 percent for the year but operat9ing expenses climbed 37 percent for the quarter and 22 percent for the year well below the increase in revenues. The company paid a dividend of $1.80 per share during the year for a yield in excess of 13 percent based on the stock price of $13.50 at the start of 2014.
CHL 9-14Looking forward the foreign exchange gains earned in the last two years is unlikely to repeat in 2015 as the Jamaican dollar is unlikely to slip to the same degree it did in the recent past, so earnings will need to exclude most of these gains which amounts to just over 40 cents per share. Investors could be looking at earnings per share around $4.80 in 2015. At a price of $16 the stock is undervalued but they are difficult to come by.
Equity capital stood at $200 million and net book value at $5.33 per share. There is virtually no borrowings and cash of $93 million.
The company is involved in primarily in stevedoring services and is in the process of acquiring a petroleum haulage company which it now manages pending completion of the sale. The stock is listed on the Jamaican Stock Exchange.

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Cool increased profits at Caribbean Cream

July 12, 2014 by

Kremi280X150As far back as 2013, IC insider rated Caribbean Cream stock Buy Rated, but it was far too cool for the market who was not buying, they may well change the tune sooner than later as the company is reporting blowout first quarter numbers with profit up 79 percent for the quarter that ends in May.
That is only the start, as IC insider is forecasting earnings to climb to 40 cents for the fiscal year and to rise to 70 cents in 2016. For the year to February this year earnings came out at 11 cents per shares, which was up from 5 cents before. The stock last traded at 70 cents each. As the name suggest the company is in the business of production and sale of ice cream and is listed on the junior stock exchange market.
The improved profit comes against the background of at 19.5 percent revenue increase that was pushed to $252 million, from $211 million in 2013. But it was the performance in gross profit margin that made the huge difference, with a jump of 61 percent to $69 million and was more than adequate to overcome a 58.6 percent jump in administrative, selling and marketing expense that climbed to $47 million, with selling and marketing expense more than doubled. Management indicates that cost associated with the JMA Expo and development cost for the new Kremi advertising campaign, launched at the end of June, helped push cost in this area. The new packaging for the retail products was launched in May, the company reported.
Gross profit margin jumped to 37.8 percent in the quarter from only 25.6 percent in the 2013 period. The improved margin, is a continuation of gains made in the November quarter last year when it climbed to 37 percent. In the November quarter in 2012, the margin was only 24.7 percent and 29.6 percent year to date for the nine months period in 2013. For the year ended February, gross margin was 31 percent, reflecting continued gains in the February quarter.
Growth in sales has slowed and is well down on the growth rate for the February and April quarters, of 48 percent each and 27 percent for the July quarter. Improvement in the plant and new packaging, should help in moving sales to a higher level, than the slower pace over the last three quarters. If this happens then profits should jump even more than the latest figures have.
Capital Spend| During the year to May, capital expenditure amounted to $160 million and was primarily geared to improving efficiency in the factory. The expenditure included commissioning of a new cold room to facilitate holding four times more inventory than before. The next phase will provide for new and larger factory floor and the installation of a new blast freeze equipment that is expected to cut operating cost and spoilage going forward.

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