Prices of 14 securities rose and 15 declined and just 5 held firm when the Jamaica Stock Exchange closed on Wednesday from 34 securities trading in the main and US dollar markets compared to 33 trading on Tuesday.
At the close of trading, the All Jamaica Composite Index advanced by 1,658.37 points to 382,756.89 and the JSE Index gained 1,510.97 points to close at 348,734.83.
Sterling Investments ended at a 52 weeks’ closing high at $18.50, PanJam Investment traded at an intraday high of $60 while Sagicor Real Estate Fund trading at a 52 weeks’ low of $10.68.
IC bid-offer Indicator| At the end of trading, the Choice bid-offer indicator reading is very strong for continuation of the market’s rally and shows 8 stocks ended with bids higher than their last selling prices and only 1 closing with a lower offer.
The main market ended with 117,820,162 units valued at $2,898,097,993 compared to 24,501,665 units valued at $302,847,453 changing hands on Tuesday.
The day’s volume was led by, JMMB Group dominated trading 102,542,622 units and 87.03 percent of the day’s volume, followed by Sagicor Real Estate Fund with 10,177,834 shares accounting for 8.64 percent of main market volume and 138 Student Living with 3,333,334 units and just 2.83 percent of the day’s volume.
Trading resulted in an average of 3,681,880 units valued at over $90,565,562, in contrast to 844,885 shares valued at $10,443,016 on Tuesday. The average volume and value for the month to date amounts to 579,751 shares valued $9,695,343, compared to 387,743 shares valued $4,414,023 traded on the immediately preceding trading day. August closed, with an average of 224,564 shares valued at $4,310,285, for each security traded.
In the main market activity, Barita Investments climbed 84 cents and closed at $18 with 205,636 shares changing hands, Berger Paints rose 32 cents to $22.43, in exchanging 1,500 stock units, Caribbean Cement shed $1.51 to finish at $47.99, in the trading of 15,599 shares, Grace Kennedy rose $1 and finished trading 57,180 shares at $59, Jamaica Broilers jumped $2.75 in trading 73,741 stock units, to close at $28.75, Jamaica Producers rose 50 cents and finished trading 146,786 units at $27, Kingston Wharves dropped $3.70 to $70.30, 
with 10,470 stock units changing hands, Mayberry Investments lost 25 cents and settled at $8.25, exchanging 13,000 units, NCB Financial Group lost $2 and ended trading of 76,697 shares at $118, PanJam Investment climbed $2.74 and closed at $56.24, while exchanging 53,945 stock units, after it hit a 52 weeks’ high of $60, Sagicor Real Estate Fund gained 99 cents to settle at $12, trading 10,177,834 shares, Scotia Group lost $2 in trading 118,566 units at $60, Seprod lost $1.60 and finished trading 3,791 shares at $45.20, Sterling Investments jumped $1.98 to end at a 52 weeks’ closing high at $18.50, with 66,444 shares changing hands.
Trading in the US dollar market closed with 268,098 units valued at $69,579 as JMMB Group 6% preference share rose 6 cents completed trading of 18015 at $1.06 and Proven Investments traded 250,083 shares at 20 US cents after falling by 2 cents The JSE USD Equities Index declined 7.13 points to close at 159.31.
TTSE stocks inched higher – Wednesday
The two main indices of the Trinidad & Tobago Stock Exchange, closed higher on Wednesday, with the Composite Index rising 1.70 points to 1,220, the All T&T Index gaining 3.36 points to 1,693.61, while the Cross Listed Index remained unchanged at 100.33.
At close, 19 securities changed hands, with the price of 3 rising, 4 declining and 12 remaining unchanged, against 16 trading on Tuesday.
The market ended trading of 1,014,023 shares valued $26,822,916, compared to 562,645 shares valued $7,567,683 changing hands on Tuesday.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading closed with 2 stocks ending with higher bids than the last selling prices and 5 with lower offers.
Stocks closing with gains| Agostini’s advanced $1.82 to close at a 52 weeks’ high of $22.97, after exchanging 10,873 shares, JMMB Group closed with a gain of 5 cents at $1.65, after exchanging 60,362 shares and Trinidad & Tobago NGL gained 39 cents and settled at $29.54, after exchanging 49,741 shares.
Stocks closing with losses| Clico Investments shares fell 10 cents and ended at $19.80, with 12,727 stock units changing hands, Massy Holdings closed with a loss of 10 cents and concluded exchanging 5,258 shares at $47.10, Trinidad Cement shed 4 cents and ended at $2.82, after exchanging 800 shares and West Indian Tobacco lost 10 cents and completed trading at $88.45, with 26,146 unit changing hands.
Stocks trading with no price change| Angostura Holdings ended at $15.75, with 249,020 stock units changing hands, Ansa Mcal completed trading at $56, with 72,578 units, Ansa Merchant settled at $38, after exchanging 38,875 shares, First Citizens closed at $32.60, after exchanging 21,207 shares, Guardian Holdings completed trading of 143 units at $16.90, National Enterprises ended at $8.96, with 334,410 stock units changing hands. NCB Financial Group settled at $5.73, after exchanging 6,968 shares, One Caribbean Media concluded trading at $12.10, exchanging 595 shares, Prestige Holdings completed trading at $8, with 200 units, Republic Financial Holdings ended at $103.69, after exchanging 24,154 shares, Scotiabank completed trading of 99,466 units at $64.94 and Unilever Caribbean ended at $26.25, with 500 stock units changing hands.
Prices of securities trading for the day are those at which the last trade took place.
Large drop for JSE main market index – Tuesday
Scotia Group closed with the offer at $58, well below the last traded price.
Prices of 20 securities rose and 9 declined when the Jamaica Stock Exchange closed on Tuesday but a sharp fall during the day by Scotia Group, sank the main market indices by more than 2,800 points.
At the close of trading, the All Jamaica Composite Index diving 3,116.64 points to 381,098.52 and the JSE Index dropping 2,839.61 points to close at 347,223.86.
Market activities resulted in 33 securities trading, including 3 in the US dollar market compared to 32 securities trading on Monday. Sterling Investments jumped to a record close following an announcement of a proposed stock split and rights issue.
IC bid-offer Indicator| At the end of trading, the Choice bid-offer indicator reading is very strong for continuation of the market’s rally and shows 8 stocks ended with bids higher than their last selling prices and only 7 closing with lower offers.
The main market ended with 24,501,665 units valued at $302,847,453 compared to 2,957,550 units valued at over $67,644,851 changing hands on Monday.
The day’s volume was led by, JMMB Group 7.50% preference dominated traded with 12,856,800 units and 52.47 percent of the day’s volume, followed by Sagicor Group with 3,109,728 shares accounting for 12.7 percent of main market volume and Wisynco Group with 2,530,222 units and just 10.3 percent of the day’s volume.
Trading resulted in an average of 844,885 units valued at over $10,443,016, in contrast to 101,984 shares valued at $2,332,581 on Monday. The average volume and value for the month to date amounts to 387,743 shares valued $4,414,023, compared to 360,577 shares valued $4,034,759 traded on the immediately preceding trading day. August closed, with an average of 224,564 shares valued at $4,310,285, for each security traded.
In the main market activity, Caribbean Cement climbed $1.50 to finish at $49.50, trading 10,500 shares, Grace Kennedy rose 83 and finished trading 412,044 shares at $58, Jamaica Broilers dropped $1.05 in trading 90,832 stock units, to close at $26, Jamaica Producers lost 50 cents and finished trading 1,102,131 units at $26.50, Kingston Wharves jumped $5 and finished at $74, with 3,626 stock units changing hands, Mayberry Investments lost 30 cents and settled at $8.50, exchanging 4,700 units, NCB Financial Group climbed $4.98 and ended trading of 132,380 shares at $120, PanJam Investment fell $3.46 and closed at $53.50, while exchanging 129,129 stock units, 
Sagicor Group gained 50 cent to settle at $39, in the exchange of 3,109,728 shares, Salada Foods ended trading 100 stock units and rose $1 to end at $19. Scotia Group lost $1 in trading 243,253 units at $62.01, Sterling Investments jumped $2.02 to end at a 52 weeks’ closing high at $16.52, with 28,864 shares changing hands,Sygnus Credit Investments traded 2,361,804 shares and jumped $1.67 to close at $13.72, Stanley Motta gained 46 cents to $5.31 trading 170,600 shares, Supreme Ventures added 50 cents and ended at $16.50 with an exchange of 25,610 shares and Victoria Mutual Investments lost 19 cents and concluded trading 168,538 stock units at $3.70 and Wisynco Group rose 25 cents and finished at $9.10, with 2,530,222 units.
Trading in the US dollar market closed with 110,523 units valued at $34,145 as JMMB Group 5.75% preference share declined by 1 cents completed trading of 10,845 at $2, JMMB Group 6% preference share lost 5 cents completed trading of 10,845 at $1.01, Proven Investments traded 66,878 shares at 22 US cents after falling by 1 cent and Sygnus Credit Investments USD Ordinary share traded 30,300 units losing 1 cent at 11 US cents. The JSE USD Equities Index advanced 4.42 points to close at 166.44.
Junior Market recovers 128 points in 2 days
The Junior Market Index having recovered 71.51 points of the 136.58 points lost on Friday, regained another 56.96 points on Tuesday to close at 3,428.20, as 17 securities rose to 6 that declined and 5 remained unchanged.
At the close of trading 28 securities changed hands, including 3 that closed at 52 weeks’ high, compared to 23 securities trading on Monday, leading to an exchanged 1,705,030 shares valued at $6,168,727, compared to 2,563,014 units valued at $10,430,621 on Monday.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading had 4 stocks ending with bids higher than their last selling prices, 3 closed with lower offers.
Trading closed with an average of 60,894 units for an average of $220,312 in contrast to 111,435 units for an average of $453,505 on Monday. Trading for the month to date averages 489,796 units for an average of $2,877,021 and on the prior trading day, an average of 518,389 units for an average of $3,054,135.
Trading in August, averaged 244,613 units at $1,348,298 for each security traded.
At the close of trading, Access Financial closed at $48, with 100 shares trading, AMG Packaging ended at $1.94, with an exchange of 50,000 stock units, Blue Power concluded trading with a loss of 49 cents at $6.50, with 28,132 units changing hands, CAC 2000 jumped $2.50 to an all-time high of $15, with 4,785 shares trading, Caribbean Cream ended trading of 15,300 shares at $7.90. Caribbean Flavours traded 5,359 stock units and rose $1.10 to $18, Caribbean Producers finished trading 25 cents higher at $6.35, with 27,102 units, Consolidated Bakeries closed with a loss of 1 cent at $2.45, with 14,200 shares changing hands, Derrimon Trading ended 10 cents higher at $2.90, with 334,164 shares. Elite Diagnostic rose 3 cents to $3.15, trading 169,251 stock units, Everything Fresh closed trading with 152,436 shares changing hands at $2.10, Express Catering ended trading of 29,398 shares and rose 21 cents at $8.21, 
FosRich Group traded 298,283 shares and gained 4 cents to $3.25, General Accident finished trading with a loss of 20 cents at $3.80, with 2,823 shares. GWest Corporation closed with a loss of 9 cents at $2.06, trading 10,433 stock units, Honey Bun ended 20 cents higher at $4.20, trading 100 units, Indies Pharma lost 40 cents and closed with 370,098 shares changing hands at $3.50, ISP Finance jumped $2 to close at a 52 weeks’ high of $22, trading 6,334 shares, Jamaican Teas settled 30 cents higher at $5.30, with 13,106 shares trading. Jetcon Corporation ended trading 2,400 stock units and rose 2 cents to $4, KLE Group finished trading 45 cents higher at a 52 weeks’ high of $3.75, with 31,795 shares, Knutsford Express closed 50 cents higher at $12.50, with 500 shares changing hands, Lasco Distributors ended with a loss of 5 cents at $4, in exchanging 3,200 shares. Lasco Financial concluded trading of 101,878 stock units and rose 10 cents to $5.50, Lasco Manufacturing finished 15 cents higher at $4, switching 1,100 units, Main Event gained 50 cents to $5.60, with 25,000 shares, Medical Disposables ended trading 5,000 shares and rose $1.35 higher to $7.95 and Stationery and Office finished trading at $9, with 2,753 shares changing hands.
Prices of securities trading for the day are those at which the last trade took place.
Modest price changes on TTSE – Tuesday
Trinidad & Tobago Stock Exchange Head Quarters
All three main indices of the Trinidad & Tobago Stock Exchange, closed higher on Tuesday, with the Composite Index fell 0.52 points to 1,218.30, the All T&T Index rose 0.89 points to 1,690.25, while the Cross Listed Index shed 0.27 points to close at 100.33.
At close, 16 securities changed hands, with the price of 3 rising, 3 declining and 10 remaining unchanged, against 11 trading on Friday.
The market ended trading of just 562,645 shares valued $7,567,683, compared to 116,235 shares valued $1,984,887 changing hands on Friday.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading closed with 2 stocks ending with higher bids than the last selling prices and 3 with lower offers.
Stocks closing with gains|Sagicor Financial advanced 5 cents and ended at $7.75, with 10,750 stock units changing hands, Trinidad Cement gained 6 cents and settled at $2.86, after exchanging 13,255 shares and West Indian Tobacco closed 10 cents higher at $88.55, with 1,946 units trading.
Stocks closing with losses| JMMB Group fell 5 cents and finished at $1.60, after exchanging 205,278 shares, One Caribbean Media fell 1 cent and closed at $12.10, after exchanging 1,980 shares and Trinidad & Tobago NGL lost 10 cents in completing trading of 1,500 shares to close at $29.15.
Stocks trading with no price change|Angostura Holdings concluded trading at $15.75, with 1,000 stock units changing hands, Ansa Mcal closed at $56 trading 25,385 units, Ansa Merchant completed trading at $38, after exchanging 3,774 shares, Clico Investments ended at $19.90, with 1,505 stock units changing hands, First Caribbean International Bank concluded trading 11,600 units at $8.50, First Citizens concluded trading at $32.60, after exchanging 1,365 shares, Grace Kennedy closed at $2.70, with 200,000 stock units changing hands, Massy Holdings closed at $47.20, after trading 30,521 shares, Prestige Holdings closed at $8 after trading 5,000 units and Scotiabank ended at $64.94, trading 47,786 units.
Prices of securities trading for the day are those at which the last trade took place.
JSE main market retreats on Monday
The Jamaica Stock Exchange main market closed, with the All Jamaica Composite Index losing 2,368.58 points to 384,215.16 and the JSE Index dipping 2,158.04 points to 350,063.47.
Market activities resulted in 32 securities trading, including 3 in the US dollar market compared to 31 securities trading on Friday. The prices of 10 stocks rose, 11 declined and 11 closed, unchanged.
IC bid-offer Indicator| At the end of trading, the Choice bid-offer indicator reading is very strong for continuation of the market’s rally and shows 8 stocks ended with bids higher than their last selling prices and only 1 closing with a lower offer.
The main market ended with 2,957,550 units valued at over $67,644,851 compared to 10,467,731 units valued at $82,276,433 changing hands on Friday.
The day’s volume was led by, Wisynco Group with 1,164,093 units and 39.4 percent of the day’s volume and Scotia Group with 243,253 units.
Trading resulted in an average of 101,984 units valued at over $2,332,581, in contrast to 348,924 shares valued at $2,742,548 on Friday. The average volume and value for the month to date amounts to 360,577 shares valued $4,034,759, compared to 376,915 shares valued $4,149,025 traded on the immediately preceding trading day. August closed, with an average of 224,564 shares valued at $4,310,285, for each security traded.
In the main market activity, Barita Investments lost $1.50 to close at $17 trading 23,551 shares, Grace Kennedy lost 83 and finished trading 94,795 shares at $57.17, Jamaica Broilers dived $5.44 in trading 68,512 stock units, to close at $27.05, Jamaica Producers gained $2.45 and finished trading 23,000 units at $27, Kingston Wharves declined $3.50 and finished at $69, with 7,519 stock units changing hands, Mayberry Investments gained 80 cents and settled at $8.80, exchanging 5,632 units, NCB Financial Group climbed $4.92 and ended trading of 157,027 shares at $115.02, Sagicor Group gained 50 cents to settle at $38.50, 
in the exchange of 162,322 shares, Salada Foods ended trading 100 stock units and rose $1 to end at $19. Scotia Group lost $1 in trading 243,253 units at $62.01, Sygnus Credit Investments traded just 2,350 shares but lost 95 cents to close at $12.05, Supreme Ventures fell 45 cents and ended at $16 with an exchange of 81,842 shares and Victoria Mutual Investments rose 25 cents and concluded trading 101,842 stock units at $3.89.
Trading in the US dollar market closed with 39,200 units valued at $14,546 as JMMB Group 6% preference share rose 1 cents completed trading of 10,000 at $1.06, Proven Investments traded 7,500 at 22 US cents after falling by 1 cent and Sygnus Credit Investments USD Ordinary share traded 21,700 units losing 1 cent at 11 US cents. The JSE USD Equities Index lost 4.92 points to close at 162.02.
Junior Market recovers 71 points on – Monday
The Junior Market Index recovered 71.51 of the 136.58 points lost on Friday, to close at 33,371.24, on Monday as 7 securities rose to a decline of 9.
At the close of trading 9 securities ended the prices closing unchanged from 23 securities changing hands, compared to 29 on Friday. Investors exchanged 2,563,014 units valued at $10,430,621, compared to 27,838,500 units valued at $164,750,850 on Friday.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading had 7 stocks ending with bids higher than their last selling prices, 5 closed with lower offers.
Trading closed with an average of 111,435 units for an average of $453,505 in contrast to 959,948 units for an average of $5,681,064 on Friday.
Trading for the month to date averages 518,389 units for an average of $3,054,135 and on the prior trading day, an average of 541,966 units for an average of $3,204,801. Trading in August, averaged 244,613 units at $1,348,298 for each security traded.
At the close of trading, AMG Packaging ended with a loss of 1 cent at $1.94, in exchanging 117,200 stock units, Blue Power climbed 59 cents to $6.99, with 70,243 units changing hands, Cargo Handlers settled at $15, trading 12,189 shares, Caribbean Flavours with a loss of $1.10 in trading 3,757 stock units at $16.90, Caribbean Producers finished trading 13,662 units and rose 10 cents to $6.10. Derrimon Trading ended at $2.80, with 75,428 shares, Dolphin Cove concluded trading with a loss of 50 cents at $16.50, with 500 shares, Elite Diagnostic finished with a loss of 4 cents at $3.12, with 66,264 stock units, Everything Fresh closed trading of 163,250 changing hands shares at $2.10, Express Catering lost 21 cents to close at $8, trading 65,806 shares. General Accident finished trading 10 cents higher at $4, with 1,989 shares changing hands, 
Honey Bun ended at $4, in exchanging 15,000 units, Indies Pharma lost 39 cents and closed with 1,269,841 shares changing hands to close at $3.50, Jamaican Teas settled trading of 25,350 shares at $5, Jetcon Corporation ended trading 94,876 stock units with a loss of 2 cents at $3.98. KLE Group finished trading 30 cents higher at $3.30, with 196,224 shares changing hands, Knutsford Express closed 50 cents higher at $12, with an exchange of 16,106 shares, Lasco Distributors rose 55 cents to $4.05, with 11,320 shares trading, Lasco Financial concluded trading 15 cents higher at $5.40, with 118,389 stock units. Lasco Manufacturing finished with a loss of 5 cents at $3.85, trading 7,000 units, Paramount Trading closed at $3, in exchanging 17,120 shares and Stationery and Office finished trading of 30,000 stock units with a loss of 25 cents at $9. In the Junior Market preference segment, Eppley 8.25% concluded trading at $6, with 171,500 units changing hands.
Prices of securities trading for the day are those at which the last trade took place.
Several stocks to watch this week
NCB Financial stock closed at $110 after hitting $125 on Friday.
The main stocks of interest this week are Stationery and Office Supplies, CAC 2000, NCB Financial, Caribbean Cream, Main Event and Wisynco, most of these have limited supplies.
Barita Investments that was highlighted as a stock with main stock to watch this past week, moved $12.95, to end at $18.50 after it traded as high as $19.50. The movement in the price resulted in Cornerstone more than doubling their investment in the company within a short time frame. While it is not listed as a lead stock to watch this week, the stock has much more room to grow over the coming months as demand increases and supplies decline as the potential for much increased profit unfolds.
Bulls pushed the Jamaican stock market, to new heights last week, with the main market having 12 straight days of record highs and the Junior Market moving to new highs as well.
The main moved within 1,600 points of the All Jamaica Composite Index 400,000 points last week but pulled back from what is a major resistance point. The supply of several of the main market stocks are extremely scarce and that is working in market favour to move much higher, before too long. There are several stocks priced well below the market’s average and that could encourage buying interest in them as well.
Investors should keep their eyes on a number of stocks as some may move and others may trade in a narrow band. NCB Financial closed on $110, could move higher but there is a big gap between the offer prices and the bids and this seems likely to maintain volatility in the price for a while.
Grace Kennedy may not be ready to break out of the $60 range as yet but it’s a stock to keep an eye on. Caribbean Cement keeps trading between $46 to $50, but there appears no real desire to move the price forward. Kingston Wharves has just 9,700 units on offer up to $75, with 200,000 on the bid at $68.51, so it could move back to the $75 price this week. Supply of JMMB Group have dried up and that could create the environment for the price to move higher.
An overall view of stocks indicates that the main market continues to be steered higher by an upward sloping support line as well the 45 and 125 day moving averages, lending support just below, but the 400,000 points resistance could likely stall the rally in the main market for a while. The Junior Market that traded recently at an all-time high, is being steered by an upward rising long-term support line and a golden cross. The golden cross is a very strong bullish long-term signal.
Everything Fresh down but not out
Everything Fresh is one of a hand full of initial public stock offers to be selling below the IPO price months after the issue. The stock that was over priced has only been partially helped by a big jump in 2018 half year profit.
The fall in the price was due to over pricing the initial offer and failure to provide more up to date information on the 2018 performance to the time of the IPO and to address developments with the margins. Even with improved results, the stock remains one of the higher priced units on the Junior Market, at a PE of 14 times this year’s pretax earnings and is in line with the market’s average.
Boosted by a big jump in profit margins, earnings after tax jumped 180 percent in the June quarter, to $26.5 million from $9.5 million in 2017. For the six months to June, profit climbed 99 percent to $38.6 million from $19.4 million in 2017. For the next five years, profit will be free of corporate taxes and in the second five years will pay taxes at half the regular rate.
Sales revenue rose 9.7 percent for the quarter, to $494 million from $451 million and increased 6 percent for the half year, to $969 million from $915 million in 2017.
Improvement in profit margin in the first half of the year that grew from 8 percent to 11 percent, increased further to 13 percent in the June quarter and was the major contributor for the sharp increase in profit. The Chairman, Gregory Pullen informed IC Insider.com, that the company took a deliberate decision in 2017 to go after certain clients with an introduction of low margins, with the expectation that they would be able to enjoy higher margins in 2018 onwards.
Everything Fresh two major owners and directors, Mr. & Mrs. Pullen.
The effect of the changes, operating profit rose 84 percent in the quarter, to $66 million from $36 million and increased 49 percent for the year to date, to $108 million from $72 million in 2017.
Sharp increase in administrative expenses by 38 percent to $28 million in the quarter and by 30 percent in the six months period to $54 million, kept the growth in the top line from filtering fully into profit. Marketing expenses associated the public of share issue added to cost in the period. Finance cost rose in the quarter, to $5 million from $4.3 million in 2017 and from $8.7 million to $9.3 million for the six months.
Earnings per share before tax came out at 5 cents for the quarter and 8 cents for the six months and should end the year at 15 cents for PE of 14 times 2018 earnings and 10 times 2019 projected earnings of 20 cents per share. The stock traded at $2.10 on the Junior Market of the Jamaica Stock Exchange on Friday.
Gross cash flow brought in $48 million but changes in working capital and inflows from the issue of shares, resulted in $213 million of cash funds as of June. A large portion of the share issue proceeds was received after the end of the quarter, the chairman’s report to shareholders stated.
At the end of June, shareholders’ equity climbed to $651 million from $225 million in 2017. Borrowings stood at just $107 million. Net current assets ended the period at $614 million inclusive of trade and other receivables of $503 million and cash and bank balances of $213 million. Current liabilities ended the period at $207 million.
The company is looking at three meat processing facility locally with a view to acquiring one and expects that discussions will conclude by the end of this year or early in 2019. The plan is to enable the manufacturing of products by them to sell directly to its clients at more competitive prices.
Sales jump sharply at Main Event
Main Event backed with IC BUY RATED status
Growth in revenues while not an exact proxy for increased profits, is often a very good indicator of greater gains ahead. That may be exactly what is happening at the Junior market listed Main Event.
The results for the nine months to July show strong sales growth but flat profits. Revenues for the July quarter surged nearly 26 percent to $364 million, but profit fell 7 percent to $24.5 million from $26.3 million in 2017. For the nine months to July, profit was up just 4 percent to $105.5 million that flowed from a 13 percent rise in revenues to $1.07 billion, compared to net income of $101 million in 2017.
The company incurred increased cost as it seeks to expand its service offerings. The results to date suggest that the full year earnings will not vary much from the 2017 full year results of 37 cents. But 2019 could be a blow out year for them, if revenue growth seen so far for this year, continues into 2019.
Profit margin in the first half of the year, was held to the same level as in 2017, at 48 percent and declined in the July quarter to 45 percent from 49 percent in the 2017, the impact, operating profit rose just 15 percent in the quarter to $164 million from $143 million but fell to 14 percent for the year to date, to $512 million from $447 million in 2017.
Administrative expenses rose 20 percent to $111 million in the quarter and increased 15 percent in the nine months period to $311 million. Marketing and sales expenses increased by 44 percent to $15 million for the nine months. Depreciation rose 49 percent to $24 million in the quarter and increased 29 percent in the nine months to $69 million, an indication of increased capital spend to accommodate expansion and increased income. Finance cost was flat in the quarter, at $5.2 million and rose just 5 percent to $13.6 million for the nine months.
Earnings per share came out at 9 cents for the quarter and 37 cents for the nine months and should end the fiscal year around 40 cents. For 2019 earnings should be in the order of a string increase to 75 cents.
“Performance has been negatively impacted by write downs on trade receivables to align to reporting standard, IFRS 9, continued start up expenditure for new service offerings and cost with higher head counts and incentive compensation,” the Chairman Ian Blair and Chief Executive Officer reported to shareholders in their commentary accompanying the quarterly.
Gross cash flow brought in $175 million but growth in receivables, inventories, addition to fixed assets of $160 million, offset by net loan inflows and increased payables resulted in net cash flow ended at a negative $63 million and leaving $29 million in cash at the end of July. Shareholders’ equity stood at $551 million with borrowings at just $185 million, including amounts due to related parties. Net current assets ended the period at $141 million, inclusive of trade and other receivables of $304 million, cash and bank balances of $29 million. Current liabilities amounted to $209 million inclusive of short term borrowings.
The stock traded at $5.50 on the Junior Market of the Jamaica Stock Exchange with a relatively low PE ratio of 7.3 times 2018 earnings and is elevated to BUY RATED status.