In Thursday’s trading on the Jamaica Stock Exchange the prices of 7 stocks rose and 9 declined as 28 securities changed hands, resulting in 2,930,479 shares trading valued at $16,326,411, ahead of the emancipation holiday on Friday.
Main Market| The JSE Market Index declined by 321.93 points to 71,308.03 and the JSE All Jamaican Composite index fell 359.97 points to close at 78,443.53.
Gains| Stocks with gains, volume and last traded prices, at the end of trading in the main market, are
Berger Paints with 7,338 shares to close with a gain of 4 cents at $1.66, Caribbean Cement with 2,500 units changing hands with a gain of 20 cents to end at $2.60, Carreras 14,184 shares with a gain of 49 cents to $34.20, Proven Investments 350 US dollar ordinary shares, gained 2 US cents to 18 US cents, Sagicor Group with 14,500 units, to close with a gain of 5 cents, at $9.20 and Sagicor Real Estate Fund with only 100 units, the price moved up 5 cents to $6.65.
Firm| The stocks with volume and last traded prices in the main market to close without a change in price, are Cable & Wireless with 1,927 shares at 30 cents, Grace Kennedy 1,745 shares at $56.50, Hardware & Lumber 4,550 shares at $9, Mayberry Investments 1,020 units at $1.55, Scotia Investments 7,000 units at $21 and Seprod 10,048 shares at $10.50.
Declines| The stocks with losses, volume and last traded prices, at the end of trading in the main market, are Ciboney with 40,000 shares, declining by 1 cent to 8 cents, Desnoes & Geddes 2,165 shares, down 53 cents to $4.02, Jamaica Broilers 38,680 units to close 6 cents lower at $4.57, Jamaica Money Market Brokers with 46,233 ordinary shares, declined by 9 cents to $6.96, Kingston Wharves 91,000 shares, the price declined by 25 cents to $5, National Commercial Bank with 503,434 shares, declined by 3 cents to $18.90, Pan Jamaican Investment 280 shares, with the price slipping a cent to $48.02 and Scotia Group with 8,906 shares, eased down by a cents to $19.
Preference| Jamaica Money Market Brokers 8.75% preference share, traded 251,125 units at $3, Jamaica Money Market Brokers 7.50% preference share with 1,109,863 units at $2 and Proven Investments 8% preference share with 9,700 units at $5.05.
Junior Market| The JSE Junior Market Index rose by 0.16 points to close at 610.04 as 5 stocks traded with one advancing and one declining.
Gains| Lasco Distributors is the only junior market stock gaining at the end of trading, as 500 shares traded to close 1 cents higher at $1.01
Firm Trades| Stocks in the junior market that traded to close at the same price as the day before are, Caribbean Producers 458,858 shares at $2.45, Honey Bun with 13,942 shares at $2.30 and Lasco Financial 3,340 units, to close at 90 cents.
Declines| General Accident with 287,191 shares, was the only stock declining in the junior market at the end of trading, as the price slipped by a cent to $1.36
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 13 stocks with bids higher than their last selling prices and 6 stocks with offers that were lower.
Main market slips to close week
11 stocks rose as Market index jumps
Broker house, Scotia Investments was the only buyer of the 875,724 Scotia Group shares that change hands in Friday’s trading, on the Jamaica Stock Exchange. The prices of the stock rose, to close at $20, but traded as high as $20.99.
In the overall market, the prices of 11 stocks rose and 8 declined, as 26 securities changed hands, resulting in 5,240,852 shares trading, valued at $35,553,505.
Main Market| The main indices closed sharply higher in Friday’s trading as heavily weighted Scotia Group jumped to close higher by the end of trading. The JSE Market Index jumped by 1,598.01 points to 71,711.80 and the JSE All Jamaican Composite index climbed 1,786.85 points to close at 78,895.01.
Gains| Stocks with gains, volume and last traded prices, at the end of trading in the main market, are Cable & Wireless with 210,772 shares up 4 cents to 30 cents, Carreras 317,256 units, gaining 15 cents to $34, Jamaica Broilers 308 units, up 4 cents to $4.61, Jamaica Money Market Brokers with 10,000 ordinary shares, up by 5 cents to $7, National Commercial Bank that released results after trading on Thursday, closed up by 6 cents at $18.06 while trading 51,599 shares. The stock closed with the bid of $18.11 to buy 116,978 units. Pan Jamaican Investment with 1,313 stock units, gained 8 cents to $48.10, Sagicor Real Estate Fund traded 10,000 units and gained 1 cent to $6.36 and Scotia Group gained $1.30 to $20.
Firm| The stocks with volume and last traded prices in the main market to close without a price change, are Caribbean Cement with 1,600 shares at $2.50, Desnoes & Geddes 646 shares at $4, Jamaica Producers with 5,367 shares at $17.51, Sagicor Group 121,247 units at $9, Seprod 1,276 shares at $10.50 and Supreme Ventures 12,020 units at $1.95.
Declines| The stocks with losses, volume and last traded prices at the end of trading in the main market, are Gleaner with 10,300 shares, down a cent at $1.11, Grace Kennedy with 5,000 shares, lost $1.05 to end at $55, Hardware & Lumber 800 units, down 15 cents at $9, Mayberry Investments 4,080 units at $1.55, for a 1 cent fall.
Preference| Jamaica Public Service 5% C preference share traded 42,102 units and was up by a cent to $3.
Junior Market| The JSE Junior Market Index declined by 21.99 points to close at 627.28 as 7 stocks traded with 2 advancing and 4 declining.
Gains| Stocks recording gains at the end of trading in the junior market, with the closing prices, are Blue Power 5,320 shares and the price was up by 5 cents to $9.10 and Lasco Manufacturing with 3,091,640 shares the price gained 10 cents to $1 but it traded at a 52 weeks low of 85 cents before recovering by the end of trading.
Firm Trades| The stock in the junior market that traded to close at the same price as the day before is General Accident with 99,982 shares at $1.46.
Declines| Stocks declining in the junior market at the end of trading with the closing prices are, Caribbean Producers with 430,000 shares with a 5 cents loss to $2.45, Honey Bun with only 100 shares to fall by 60 cents to $2.30. This stock was poised to fall sharply after it released disappointing third quarter results and the offer gradually melted away, as bids were at very low levels. Lasco Distributors with 25,000 shares lost 9 cents to end at a new 52 weeks low of $1.10 and Lasco Financial with 7,400 units was down 8 cent to 92 cents, after the company posted a 20 percent increase in its first quarter results to June.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 7 stocks with bids higher than their last selling prices and 5 stocks with offers that were lower.
Prices of 9 stocks rose & 4 declined
In Tuesday’s trading on the Jamaica Stock Exchange the prices of 9 stocks rose and 4 declined, 25 securities changed hands resulting in 3,183,862 shares trading, valued at $36,706,402.
Main Market| The JSE Market Index rose by 449.66 points to 70,196.56 and the JSE All Jamaican Composite index moved up by 02.81 points to close at 77200.71.
Gains| Stocks recording gains at the end of trading in the main market are, Desnoes & Geddes with 30,000 units to close 15 cents higher at $4.45 followed by Mayberry Investments with 1,980 units as the price gained 2 cents to end at $1.48, National Commercial Bank 830,055 shares at a 85 cents hike to $18.35, Proven Investments with 10,450 ordinary shares as the price inched up by 0.0001 US cents to 18 US cents, Sagicor Group with 1,148,990 shares gained 10 cents and closed at $8.90, Sagicor Real Estate Fund 84,313 shares with the price rising 10 cents to $5.95, Scotia Group with 250,930 units changing hands, gained 11 cents to close at $18.61 and Seprod with 55,472 shares changing hands and closed 10 cents higher at $10.80.
Firm| Stocks trading in the main market to close without a change in price are Cable & Wireless with 11,981 shares to close at 29 cents, Caribbean Cement 6,244 shares at $2.25, Carreras 2,192 shares at $35, Grace Kennedy 420 shares and closed at $56, Radio Jamaica with 1,790 shares closing at $1.28.
Preference| in the fixed income market, Eppley 9.5% preference share traded 16,800 units to close at $6.10, Jamaica Money Market Brokers 7.50% preference share, 10,000 units at $2, Jamaica Money Market Brokers 8.75% preference share with 176,600 units at $3.03 and Jamaica Teas debenture dote with 3,000 units to trade at $100 each.
Declines| The number of stocks that declined in the main market are Gleaner with 120,000 shares, to close 8 cents lower at $1.10 and Pan Jamaican Investment with 84,470 shares at 40 cents lower to end at $48.10.
Junior Market| The JSE Junior Market Index declined by 8.11 points to close at 706.69 as 7 stocks traded with 1 advancing and 3 declining.
Gains| The only stock that gained at the end of trading in the junior market is Caribbean Producers with 8,845 shares, to close with a gain of 18 cents at $2.83.
Firm Trades| Stocks in the junior market that traded to close at the same price as the day before are, AMG Packaging with 2,500 shares to close at $3.10, Lasco Distributors with 74,000 shares to close at $1.19 and Lasco Financial with 65,500 units to close at $1.
Declines| Stocks declining in the junior market at the end of trading are Honey Bun traded 500 shares but fell 12 cents to $2.90 for a 52 weeks low and Lasco Manufacturing 189,830 shares, as it closed lower by 12 cents at $1.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 2 stocks with higher bids than their last selling prices and 2 stocks with offers that were lower.
Honey Bun’s profit falters
Honey Bun’s last quarter profit got burnt with a $10.5 million loss compared to a small profit of $490,000 for the same period in 2012.
For the full year to August this year, profit fell from $41.5 million to $35.3 million with sales revenues climbing to $712 million from $611 million in 2012. For the quarter, sales rose from $154 million to $163 million hardly enough to cover increased cost. Rising cost and inability to price the products to recover increases in expenses is at the heart of Honey Bun’s 2013 problems that lead to lower profits. For while revenues climbed 14.8 percent for the year, direct cost climbed even faster at 18.8 percent. The increased cost meant $28 million of potential profit just evaporated as a result of not being able to pass on the full cost to customers. Compounding the problem, administrative and other cost rose much faster than revenues by 20 percent to $174 million and selling and distribution cost was contained to an increase of only 8 percent to $90 million. Finance cost at $2.9 million was almost flat.
Image courtesy of dplanet/FreeDigitalPhotos.net
The company may be able to recover some, if not all of the cost increase, during the coming year. Movement in the local currency which would have had a major impact on cost in the 2013 fiscal year should moderate going forward and with signs of stability in the economy and some green shoots of growth showing, the next twelve months should be better for them.
IC Insider is forecasting earnings of $39 million or 42 cents per share for 2014 and 65 cents per share in 2015.
Historical | Gross profit for 2013 increased by 9.7 percent and is the lowest since 2008 when it grew by 12 percent. The gross profit margin for the latest year is not the worst; it is only 2 percentage points below 2011 and well above 66 percent in 2010 and is in line with 2006 and 2007. Profit performance has been less than predictable. In 2007, pretax profit came out at $23 million and decreased to $18.7 million generated in 2008, climbed to $45 million in 2009 but fell to $26 million in 2010 with 2011 enjoying an increase to $37 million; then it was up to $42 million in 2012 only to fall back in 2013.
Finances | Notwithstanding the lowered profited out turn, the company’s finances improved during the year. Shareholders equity improved by $20 million to reach $291 million and borrowed funds was $26 million up from $20 million in 2012. Net working capital increased from $61 million to $98 with cash and bank balances reaching $78 million. Receivables climbed by 40 percent to $78 million and payables by 87 percent to $75 million.
IC Insider outlook | The stock is priced at $3 with a PE of 8 times earnings and is in line with a number of other junior market companies. At best, Honey Bun is currently a stock to watch. It will need increased sales volume to make it to our Buy Rated stock list when compared to others with a better potential for gains.
Related posts | Honey Bun growth slows to a crawl | Honey Bun not so sweet in Q1
Honey Bun growth slows to a crawl
The year 2013 is the year of the snake in the Chinese’ calendar and the crawling pace that the snake normally exhibits is pretty much what’s happening to Honey Bun, a Junior Market listed company. Increased sales and profit which in slowed down in the first quarter of this year, has slowed even further in the latest quarter to June. Revenues crawled along at just 5 percent over the 2012 quarter compared to 20 percent in the Easter-boosted March quarter. Even then, the March quarter growth was slower than the near 32 percent growth for the first 3 months of the financial year.
Revenues were $161 million in the June 2013 quarter up from $154 million in 2012 and profit was only $2.3 million down from $7.5 million in 2012. For the year to date, sales are $540 million, up 17.9 percent from $458 million in the prior year. Profit on the other hand is flat at $40.8 million versus $41 million in 2012.
Gross profit in the latest quarter actually fell by $2.5 million compared to 2012, but year-to-date gross profit is up 9 percent while administrative expenses are up even more by 16 percent to $125 million. The increase to June clouds what has been taking place earlier. There was one-third jump in administrative and other expenses to $41.6 million, up from $31.3 million a year ago.
The company generated $189.6 million in sales in the March quarter up from $160 million in 2012 and for the six months $381.5 million versus $305.8 in the prior year.
Management attributed the reduced margin to rising prices for flour and other inputs, which could not be passed on to consumers at the same pace as the cost hikes. For the March quarter, management stated that sales improvement was as a result of increased sales to new markets and exports, which increased by over 150 percent, year over year for the 3 months.
Healthy finances | The company continues in a healthy financial state with working capital at a ratio of 3 to 1 inclusive of cash and investments amounting to $75 million. This cash is up from $24 million at the end of September last year. Receivables grew at the end of the quarter to $61 million compared to $43 million in 2012.
Equity was $297 million and loan borrowing at a low of $24 million at the end of June. The stock last traded at $4 each but could well decline somewhat with these results. This year’s earnings at the end of June was 43 cents. The September quarter’s results are difficult to predict as it is the worse quarter of the year for the company. As such, the EPS at year end in September is likely to be lower than for the nine months based on past years’ numbers.
Related post | Honey Bun not so sweet in Q1
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.
Honey Bun not so sweet in Q1
Junior market listing Honey Bun reported revenue growth of 18 percent in the first quarter of this year but that is slower growth than the near 25 percent growth for the first six months of its financial year. The company generated 189.6 million in sales in the quarter, up from $160 million in 2012 and for the six months $381.5 million versus $305.8 in the prior year. Growth in revenues lagged the increased direct costs in the quarter. Management attributed the shrinking margin in the quarter to rising prices for flour and other inputs which could not be passed on to consumers at the same pace as the cost hikes.
Profit for the quarter was $23.2 million which was marginally lower than the $23.8 million garnered in 2012, and for the six months $38.4 million was generated versus $33.64 million to June 2012, or 14 percent.
A major part of the flat results in the quarter is a one third jump in administrative and other expenses to $41.6 million, up from $31.3 million a year ago. The increase is in line with the costs in this area for the December quarter.
Healthy finances | The company remains in a healthy financial state with working capital at a ratio of 3 to 1 inclusive of cash amounting to $70 million. This cash is up from $24 million at the end of September last year.
Receivables grew at the end of the quarter to $85 million compared to $57 million in 2012. However, with Easter coming towards the end of March, this would have resulted in most sales taking place towards month end, thus leading to a buildup in this item.
Management indicated that the receivables increase is due to the growth by over $10 million in monthly sales when compared to the prior year and also due to $16 million prepayments made on equipment and property. Payables also increased mainly as a result of the general increase in purchases to meet higher sales and the higher cost of goods year over year. Management went on the further state that sales improvement was as a result of increased sales to new markets and exports, which increased by over 150 percent, year over year for the 3 months.
Equity was $294 million and loan borrowing at a low of $14 million. The stock last traded at $4 each. This year’s earnings could end up at between 50-60 cents. The September’s quarter’s results are difficult to predict as that is the worse quarter of the year for them.
