JSE: Ban hitting investors harder than smokers

July 18, 2013 by

Thursday, 18th July 2013 | The smoking ban may well save some lives but it could cause some pensioners theirs. Since the Minister of Health announced the ban, Carreras’ stock, which was at $60, has declined to $53 and looks as if it could go lower as investors exit the stock in fear of profits dropping sharply as the ban takes a toll on demand for the product.

The move has taken $3.5 billion off the value of the shares so far. Shareholders include are pensioners, pension funds and other pooled funds that investors look to for income. The stock traded more than 182,000 units closing down by 75 cents to $53 in today’s trading. There are good bids at $52.50 that could lend support for a while depending on the strength of selling that may still come.

Trading activity was slow for most of the day except for the Lasco stocks, Caribbean Creams and Caribbean Producers and a few others. Activity picked up in the last leg with some upward prices and increased bids for some of the stocks that are in demand.

Stocks of 28 companies traded 6.99 million units valued at $27.2 million as 2 stocks reached an all-time high and one closed at a 52 weeks low and one at a 52 weeks high at the end of trading. The advance decline ratio turned decisively positive as 12 stocks advanced and 6 declined, as the indices with active trades all gained.

Trades of note Main Market | The all Jamaica Index gained 837.12 points to close at 88,586.88, the JSE market index was up by 475.50 to close at 87.178.11.

Grace Kennedy lost $1 to close at $57 in trading 22,451 shares, a continuation of recent weakness in the stock as the company’s stock buyback seems not to be active. Jamaica Money Market put on 30 cents to close at $8.80 with 151,000 units trading.  Sagicor Life traded 21,820 shares at $9, the stock closed up by 45 cents, National Commercial Bank (NCB) closed up 40 cents to $19.50 while trading just 7,000 shares, importantly there was 73,000 units on the bid of $19.50 at the end of trading. The NCB move could well be linked with the expectation that the company will be releasing results and disclosing dividends on Thursday next week. Sagicor Investments traded down $1 to $17 but only traded 2,298 shares, Scotia Investments traded up 69 cents on 1,900 units and closed at $26.70. Barita’s 100 shares traded and pulled the stock down to a 52 weeks low at $2.30. At the end, the bid was at $2.50 for a small quantity.

Junior market | Stocks of nine companies traded in the junior market as the index climbed by 12.87 points to 816.26. Caribbean Cream traded 1 million shares and closed down firm at $1.06. Caribbean Producers traded 520,000 shares and closed up 7 cents at $2.10. General Accident traded 142,500 shares and closed down at $2 up 5 cents and Jamaican Teas saw buying coming in, as stock traded 120,000 shares and closed 28 cents better, at $4.28. Lasco Distributors traded 2.79 million shares and closed up 5 cents to $1.50 with Mayberry being the broker buying the bulk of them, the main selling broker was Scotia Investments. Lasco Financial traded at an all-time high of $1.45 but gave up some, as it closed at $1.39 while trading 500,946 units. Lasco Manufacturing traded 319,103 shares and dropped 2 cents to $1.68. Blue Power traded 14,390 shares and dropping 26 cents and closed at $10.04. Dolphin Cove closed at all-time high of $8.70.

Proven Investment Preference shares traded 1.06 million units valued at $5.4 million while there was no trading in the ordinary shares which are quoted in US dollars. At the close there was no stock on offer.

IC bid-offer Indicator | The Investor’s Choice bid-offer market indicator, shows that bids for 7 stocks were higher with 1 stock having an offer lower than their last selling price.

JSEIndicesJul18

Filed Under: JSE Main Market, Stock Market Tagged With: , ,

JSE: Advancing stocks = declining ones

July 17, 2013 by

Wednesday, 17th July 2013 | In Wednesday’s trading on the Jamaican Stock Exchange, the advance decline ratio remained even as 8 stocks advanced and 8 declined as trading took place in the stocks of only 20 companies. The trading resulted in 9.129 million units valued at $21.2 million changing hands as 2 stocks reached an all-time high, one closed at a 52 weeks low and only one closed at an all-time high at the end of trading.

Main Market | The all Jamaica Index gained 212.18 points to close at 87.749.76. The JSE market index was up by 120.52 to close at 86,702.61.

Carreras’ stock declined to $53.75 off 75 cents as it traded 54,578 units. Grace Kennedy gained 79 cents to close at $58 in trading 23,118 shares. Sagicor Life traded 260,00 shares as high as $9, the stock closed at $8.55 up by 5 cents, National Commercial Bank (NCB) closed down 40 cents to $19.10 while trading just 49,500 shares. Jamaica Money Market put on 40 cents to close at $8.50 with only 200 units trading. Scotia Investments dropped 50 cents on 1,500 units and closed at $26.01.

Junior market | The junior market index fell by 11.07 points to 803.39. Caribbean Cream traded 434,800 shares and closed down firm at $1.06. Lasco Distributors traded 6.34 million shares and closed down 6 cents to $1.45. Lasco Financial closed at $1.39 while trading 324,288 units. Lasco Manufacturing traded 1.07 million shares to close up at $1.70. Blue Power traded 7,500 shares and gained 30 cents to close at $10.30.

IC bid-offer Indicator | The Investor’s Choice bid-offer market indicator, shows that bids for 5 stocks were higher with 2 stocks having an offer lower than their last selling price.

JSEIndicesJul17

Filed Under: JSE Main Market, Stock Market Tagged With: , ,

JSE: 121m Kremi shares trade

July 16, 2013 by

Tuesday, 16th July 2013 | Caribbean Cream was the dominant trade today as 121.14 million units were crossed by Stock & Securities for a client in two blocks of 60.5 m units each. All traded at $1.10 for a total consideration of $133.26 million. At the time of the prospectus, Scoops Unlimited was shown as owning 121,141,801 units and this would have been the block that was traded and put into two new hands. The other dominant trade was National Commercial Bank which traded 1 million units at a value of $20.15 million. The stock traded up 44 cents on the day to close at $19.50.

A total of 30 companies traded 124 million stocks with a value at $172.67 million for the day. The advance decline ratio was exactly even with 7 stocks advancing and 7 declining. The indices declined sharply as Scotia Group dropped sharply on the day.

Trades of note Main Market | The all Jamaica Index gave up what was gained yesterday and more, as the index shed 2,310.88 points to close at 87,537.58 points. The JSE market index lost 1,312.62 points to close at 86,582.09 as Carreras traded 13,280 shares between $53.90 and $54.50. The stock closed off 87 cents at $54.50. Scotia Group traded 597,000 units and lost 92 cents to close at $21.08. Jamaica Producers lost 50 cents to close at $19.50 on 56,000 units, Pan Jamaican put on 39 cents to close at $51.50 while trading 5,000 shares.

Junior market | 12 stocks in the junior market traded as most of the stocks recorded moderate increases and the junior market index moved up by 7.03 points to 814.46. Caribbean Cream, fresh from its first quarterly report to the stock exchange which showed improved profit in the last quarter to May, traded 121.145 million units and closed at $1.06. AMG Packaging traded 200,000 units but remained firm at $4. 25, Blue Power traded 38,172 units to close at $10. Lasco Distributors has struggled to hold the higher prices it recently traded at and fell back to $1.50 while exchanging 155,517 shares. Lasco Financial is doing a little better having traded at a new all-time high during the day at $1.41 but closed at $1.40, the same close as Monday’s, as 227,500 units changed hands. Lasco Manufacturing traded 190,288 shares and gained a mere cent up to $1.66.

Market intelligence | The Cable & Wireless stocks on offer are now down to under 29 million shares at 15 cents. Gleaner has over 1.24 million units on the bid at $1.16 but there are 6.4 million units on offer at $1.50. RJR still has a bid for 4.9 million units that was at $1.23 and has seen the bid moved to $1.30.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer market sentiment indicator shows that bids for 5 stocks were higher with 2 stocks having offers lower than their last selling price.

JSEIndicesJul16

Filed Under: JSE Main Market, Stock Market Tagged With: , ,

IPO: What or who is Eppley?

July 16, 2013 by

The English dictionary has no such word, much less the meaning for ‘Eppley’ and a Google search has it as a little-known surname. However, it’s a name that will be on investor’s minds over the next couple of weeks as the company seeks to raise $82.6 million as a prelude to listing on the junior market of the stock exchange. The shares are clearly not meant for the average investor due to the small number of shares on offer and the price of $377 per share, which is the same as the net asset value of the shares, represented primarily by liquid assets. The shares are also priced around 10 times earnings before tax.

Who are they? | Although the public knows nothing about Eppley, it was established in 1973 and has been operating for some time under the name, Orrett and Musson Investment Company Limited. The Company is also an affiliate of General Accident which provides the Company with the necessary infrastructure to monitor and manage its investments plus ancillary administrative services. In consideration for these services, General Accident receives an incentive based fee, which is calculated as 20% of the Company’s average return on equity that is greater than 12% per annum.

The Directors, who are associated with the Musson group as directors or executives, are Nigel A. L. Clarke, Melanie Subratie, Nicholas Scott, Sharon Donaldson, Jennifer Scott, Maxim Rochester, Keith Collister, Alexander Melville and Byron Thompson.

The offer opens on Monday, 22 July 2013 and is scheduled to close on Monday, 29 July 2013 with 218,999 shares offered to the public of which 145,999 are Reserved Shares. Applications from the general public is at a minimum of 20 shares and multiples of 10 thereafter.  If any of the Reserved Shares in any category are not subscribed by the persons entitled to them, they will be available for subscription by the other Reserved Share Applicants, and thereafter, by the general public.

The proceeds are expected to be used to expand the capacity of the Company to provide credit facilities and to pay the expenses of the Invitation, which the Directors believe will not exceed $7.5 million. There will be no liquidity for these shares as the float is far too small.

EppleyNigelClarke150x150Business profile | The Company manages a portfolio of loans, leases and other forms of commercial credit. In so doing, it provides a variety of credit products to corporate and professional customers, including insurance premium financing — the company’s main line of business, lease financing arrangements for equipment (mostly motor vehicles for commercial and professional clients), commercial loans, and other forms of credit.

Insurance premium financing involves the financing of insurance premiums for personal and commercial insurance contracts, generally for periods of less than a year. Leasing involves the provision finance leases and commercial lending involves a variety of loans products that in most instances differ in structure or collateral from loans the Directors consider to widely available in the marketplace.

The Directors anticipate that commercial lending and leases will comprise an increasing share of the Company’s business following the Invitation.

Eppley aims to provide more attractively priced credit to its clients with better service than what is currently available in the marketplace. It aims to do this by maintaining a lean and efficient organizational structure, making fast investment decisions based on common-sense credit standards, and exercising strict confidentially and privacy in its dealings.

The Company’s business strategy is to deliver high and consistent risk-adjusted returns to its shareholders. It believes that commercial credit offers more attractive risk adjusted returns than other available fixed income investment alternatives, including Government of Jamaica debt. The Company stated that the vast majority of its aftertax earnings will be distributed to shareholders as cash dividends subject its Dividend Policy. The policy may be revised by the Board from time-to-time with the distribution being not less than 50% of its after-tax earnings.

Eppley’s numbers | The Company’s average return on operating assets, which provides an indicator of the rates at which it is able to lend, has fallen from 28% in 2008 to 15% in 2012. This reduction occurred at a slower pace that the reduction of interest rates in Jamaica. At the same time, the Directors note that the average cost of the Company’s operating liabilities, an indicator of the rates at which it is able to borrow, had not declined as rapidly. As a consequence, the average net income spread has tightened from 15% in 2008 to 8% in 2012.

eppleytype150x150The Company has restructured its balance sheet moving way from greater reliance on debt financing to a greater use of equity funding. The restructuring involved repaying related party assets and borrowings subsequent to the last audited report at the end of 2012, as well as actual or planned conversion of some loans from related parties into equity.

The Company’s cash and deposits were $115.5 million higher on 30 April 2013 compared to 30 April 2012. In keeping with its business strategy, Eppley began its lease operations late in the first quarter of 2013 and recorded lease receivables of $18.7 million as at 30 April 2013.

Eppley’s net investment income declined to $14.9 million in the 4 months ended 30 April 2013 compared to $16.1 million in the 4 months ended 30 April 2012. This was a result of increased holdings of lower yielding cash and marketable securities in the period. The Company’s other operating income increased significantly, mainly as a result of foreign exchange gains on its holdings of hard currency. As a result, its profit after tax increased from $7.0 million in the 4 months ended 30 April 2012 to $12.1 million in the 4 months ended 30 April 2013.

Listing of the shares on the stock exchange will provide visibility for the Company and opens it up to borrow cheaper funds than if they were a non-listed company. Listing will also improve the return on equity as there will be no taxes for 5 years on profits.

IPO outlook  | This one looks like a medium term investment but due to the listed number of shares, investors may want to acquire some in the IPO to ensure that they have them well ahead of when profits start to grow.

Filed Under: Company News, General Business News, Initial Public Offers, JSE Main Market, Stock Market Tagged With: ,

Kremi up, hardly out of the blocks

July 16, 2013 by

Caribbean Cream’s 49 percent jump in revenues in the first quarter to May this year, melted down to just 24 percent in pre-tax profits as costs rose above the growth in inflows. The situation for the February quarter was even worse as a 48 percent increase in sales delivered just $1.5 million in profit, a collapse from $18.6 million in 2012. Profit after tax rose to $11.7 million, up from $5.4 million, thanks to a roughly $6 million turn around in taxation.

Costs rise faster |  In the May quarter, direct labour cost climbed 69 percent to $11.4 million, electricity moved up by 86 percent, water jumped 106 percent to $1.2 million, machinery depreciation was up 117 percent. There were savings in packaging cost, down 53 percent to $725,000, factory rental was down by 44 percent to $1 million. IC Insider understands that the company underwent some major changes in how some aspects of the operations are done. The company used to purchase certain items from Scoops Unlimited, but this operation is now taken over, hence costs are structured differently than in the prior year period. The acquisition of their own warehouse means reduction in rental but a rise in finance cost. There was also a price adjustment in March for the products to help cover the increased production cost.

KremiBanner600X250Admin cost | Administrative cost was fairly well contained having increased far less than sales. The increase most likely would have been partially impacted by added costs to facilitate the IPO which occurred in the quarter. As such legal and professional fees were up nearly $1 million and audit and accounting fees by $1 million. Utility cost were down as well as depreciation but these may be due to reallocation of charges to direct expense instead of administrative expenses as was shown in the prior period. Interest and finance cost also showed an increase of $1 million. There was also a loss of $937,000 on disposal of fixed asset. The growth in profits before tax would be 36 percent if the loss on fixed asset is excluded. With the increased level of revenue, far more would have been expected under normal circumstances. The next quarter will be the true test when one-off costs should not recur.

Caribbean Cream’s rapid sale growth is phenomenal and looks as it can continue for a while yet. This is the aspect that many investors should be looking at as the company expands its customer base and captures market share with good products at competitive prices. As sales continue to rise rapidly, cost is likely to grow at a much slower pace thus helping to boost profits at a rapid pace.

CaribbeanCreamgrowth

At the end of May, current assets stood at $131 million up from $102 million at the end of February. Increased cash which stood at $65 million and a $24 million reduction in inventories were the factors giving rise to current asset change. Current liabilities on the other hand stood at $75.66 million a decline from February’s $126 million as the amount for payables was cut from $100 million to $64 million. Borrowed funds stood at $81 million, just a bit lower than the amount due at February.

Capital spend | The company spent $100 million on capital prior to the IPO but more is to be spent as new cold room machinery is to be installed later this year. Management states that this will cut cost and increase efficiency in freezing the product.

Valuation | The stock is selling at roughly 30 percent of sales. This compares with AMG Packaging at 100 percent of sales, Blue Power 50 percent and Jamaican Teas is around 100 percent of sales. The PE on forward earnings for 2014 is only 2 and there is much room for the stock price to move upward.

Management | The report containing the results show signs of some management weakness that they need to correct. In the investment world, communication is key. The changes in the operations and the resulting changes in the line items of costs should have been addressed in the directors’ report to shareholders. Costs that were of a one-off nature should have been highlighted so that investors could get a clearer picture about ongoing costs and profits. Instead, investors have to dig into the numbers making assumptions that really should not be necessary.

Filed Under: Company News, Company Results Tagged With:

JSE: Scotia Group pushes index but…

July 15, 2013 by

Monday, 16th July 2013 |  The all Jamaica Index climbed 1,673 points to close at 89,848.46 points as Scotia Group traded as high as $23.84 — the major factor pushing the index. However, the stock closed trading at $22, the same closing price as Friday, which suggests there could be a major correction in the upward move on Tuesday.

The JSE composite index closed at 87,894.71, up 950.57. Scotia was not the only stock to affect the indices as trading was low at only 5.9 million shares valued at $22 million. Sagicor Investments put on $1 to close at $18 and only traded 1,500 units. Carib Cement put on 20 cents as 4 million shares traded at $1 each for a total sum of $4 million. Scotia Investments put on 50 cents to close at $26.51 and Seprod put on 49 cents to close at $15 both with very insignificant volumes. Scotia Group was mostly gobbled up by Scotia Investments who traded 533,000 shares for a value of $12.65 million.

The advance decline ratio was slightly in favour of advancers with 9 advancing and 8 advancing.

Junior market | Junior market activity has cooled for the time being as 7 stocks traded with moderate price moves except for a 69 cents drop in Access Financial Services as the stock closed at $8.36 with 10,000 shares trading. Lasco Financial traded and closed at an all-time high of $1.40 cents, the volume traded was 59.700 units. Lasco Manufacturing traded as high as $1.70 but could not hold as the 653,878 shares landed the last selling price at $1.65. The junior market slipped again to 807.43 down 8.61 points.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer market sentiment indicator shows a weakening in market momentum with bid for only 1 stock higher than the last selling price and one stock having an offer lower than the last selling price.

JSEIndicesJul15

Filed Under: JSE Main Market, Stock Market Tagged With: , ,

JSE: Market positioning for rally

July 12, 2013 by

Friday, 12 July 2013 | In Friday’s activity, stocks of 26 companies traded 8.5 million units valued at $53.32 million, quite a bit more than Thursday’s $30 million. The advance decline ratio remained even as the prices of 9 stocks each moved up and down. All the indices that had actively traded stocks posted moderate gains by the end of trading. There were no changes in US dollar cross listed indices and no trades taking place in these stocks. Proven Investments Preference shares was the most dominant traded with 4.91 million shares worth $25 million.

Trades of note Main Market | The all Jamaica Index put on 468.82 points to close at 88,174.96 and the JSE market index moved up by 266.31 to close at 86,944.14. Sagicor Life, which accounted for1.185 million shares valued at $10.14 million, was the other dominant trader with the stock trading between $8.50 and $8.60 before closing at $8.50. The bulk of the shares were crosses executed by Pan Caribbean Financial Services. Scotia Group traded 223,000 shares valued at $4.885 million as the stock closed the day at $22, up 90 cents. Pan Jamaican Investment Trust traded 53,705 shares valued at $2.77 million between $51.11 and $52 but closed unchanged at $51.11. Grace Kennedy traded down $2.29 at $57.21 as 81,350 units traded valued at $4.79 million.

Junior market | 7 stocks in the junior market traded as 3 advanced and 3 declined. Blue Power traded 216,016 units valued a $2.18 million as the stock traded between $10.10 and $10.15 before closing at $10.10. At the close there were 100,000 Blue Power shares on offer at $10.50. Lasco Distributors traded 476,710 shares between $1.55 and $1.60 but closed at $1.55 off 5 cents. Lasco Manufacturing traded 807,469 units between $1.60 and $1.70 and closed at $1.66 and Lasco Financial traded up 5 cents to close at $1.35 with 138,800 units. Paramount closed at $3.50 up 20 cents with only 5,000 shares trading. There was no stock on offer at the close. KLE Group closed at $2.60, an all-time low, as 30,000 shares traded off by 10 cents.

Market intelligence | Lasco Distributors has 1.14 million units on offer at $1.60 with a bid for 1,740 units at $1.55. Good support is at $1.40. Lasco Manufacturing and Lasco Financial seem to have limited supply. Cable & Wireless selling continues, but the sellers seem to be holding out for prices at 14 cents or more as the amounts offered at 15 cents remain at 29 million shares. There has been very little change since last week while the quantities for the few bids that are in have not increased much. Desnoes & Geddes has 1 million shares on offer at $5.18 along with 200,000 at $5 as reasonable demand is at $4.70. RJR still has a bid at $1.23 for 4.9 million units, there has not been much change to the supply. Good support exists for Sagicor Life at $8.40, while supply is limited below $9.30. Carreras support is pretty good at $53.50 and more bids have come in for the stock near to $54 as supply of the stock declines.

Grace Kennedy’s supply of 700,000 units at $61 still remains as a barrier for upward price movement for the time being as demand has declined sharply leading to the fall in the price today. The price could fall more unless Grace’s buy-back program kicks in as there is very few serious bids in for the stock close to the recent selling price. There are good bids in the market for JMMB’s stock between $7.85 and just over $8, decent supply is listed at $10.50 and above. Scotia Group supply is surely on the decline with some supply above $22. Scotia Investments sold today in Trinidad for the equivalent of $30.19 with the price there looking as if it will move up further as investors in that market look for income generating assets. At the present price, the stock would be yielding 6 percent in a market where long term yields are under two percent.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer market indicator shows that bids for 6 stocks were higher with 1 stock having an offer lower than the last selling price. This is the strongest this signal has been since the last week of June, an indication that the market could be resuming the upward momentum in the days or weeks ahead.

Insider Trades | A related party to Mayberry Investments Limited purchased a total of 995,602 of the company’s shares during the period July 4 – 9, 2013 and a person connected to a senior officer of Trinidad Cement Limited purchased 108,000 of the company’s shares on July 8, 2013. These could be two bullish indicators for the shares of these two companies.

JSEIndicesJul12

Filed Under: JSE Main Market, Stock Market Tagged With: , ,

JSE share allotment

July 12, 2013 by

The Jamaica Stock Exchange announced the formula for the allotment of shares in the recent issue of 38,250,000 ordinary shares which was oversubscribed by 60 percent. The IPO received 196 applications for the shares costing approximately J$160.663 million at the price of J$2.85 per each. The issue which was opened on Friday, July 5 2012 closed on Monday, 8 July 2012 after it was oversubscribed on the first day of issue.

All Reserved Share applicants will receive 100% of the amount of the Shares they applied for. Applicants for the general pool, who applied to receive shares of 500,000 units or less, will receive 100% allocation. This applies to 93 applicants, 6 applicants who applied for more than 500,000 shares will have the excess allocated on a pro-rated basis.

The shares are expected to start trading next week.

Read more about the Jamaica Stock Exchange IPO at JSE: 38m shares for IPO published 22 May 2013

Filed Under: Company News, General Business News, Initial Public Offers, JSE Main Market, Stock Market Tagged With: ,

AMG is investing for tomorrow

July 12, 2013 by

AMG Packaging invested $108 million since last August in fixed assets including land, building and equipment. The additions moved fixed assets to $230 million, a major increase for a relatively small company. The company took on debt to help fund the expansion as well as providing working capital financing, while both inventories and trade receivables rose and was partially offset by a rise in payables.

At the end of April, loans stood at $91 million up from $30 million in May 2012 as borrowing added $70 million to debt with repayment of principal over 7 years at 9.25 percent interest for 5 years and variable thereafter at 3.25 percent above Treasury bill rates. Capital spend is yet to end. Management in their report to investors indicated that a multi-functional machine on order will replace older manual ones and a rotary die cut machine that is being manufactured will be shipped shortly. They are expected to increase production and enhance the quality of products.

amg-packaging_logo150x1502013 profit | Profit for the quarter came in at $7.3 million down from $15.7 million in 2012. For the nine months period, the bottom line reflected an increase in profits to $37.7 million up from $32.56 million in 2012. Revenues climbed in the latest quarter over that of 2012 but only by 5.7 percent to reach $111.37 million, while revenues for the nine months was up by 18 percent hitting $315.77 million. Sales slowed down sharply in the latest quarter from 34 percent increase in the three months to February and 18 percent increase in the November quarter.

Interestingly, even as revenue growth slowed in the May quarter, the margin continues to show improvements as gross profit increased over that of the 2012 May quarter and production raw material cost marginally more to generate the increased sales. Direct expenses climbed 27 percent in the quarter. Rises in administrative cost, finance, interest and depreciation combined to squeeze profit for the quarter, although profit before these expenses grew by $2 million, net profit fell by $8.4 million. In the quarter, interest cost came in at $2.8 million. There was none reflected in results in the prior period. Financial cost rose by $1.3 million and administrative cost increased by $1 million over the February quarter. Some of the increased cost is not expected to recur in the subsequent quarter but indications from the rise in administrative cost in the previous quarter compared with 2012 figures suggest that the cost structure going forward is set at higher levels than before. The company has been focusing its energies on cost containment and the reduction of raw material waste. The improved margins indicates that they have succeeded in this latter area. But there others that they are working on that will bring results in the future. The results to date indicate that they need to get revenues up at a faster pace than the latest quarterly results indicates to more than cover the increased overhead cost.

2012 profit | Sales for the year ended August, 2011 increased by 15.71% to $357.46 million as a result of an increase of 27.19% in the number of units produced. This increase in sales resulted in a 27.23% increase in Gross Profit of $81.31 million (2011- $63.91 million).  For 2012, profit of $47.66 million was realised, up 52.45% over the 2011 prior year of $31.27 million.

amg-packagingboxes150x150Finances | Current assets of $199 million including cash of $49 million is more than adequate cover for current liabilities of $87 million. At the end of the February, cash was down to $7 million. Inventories climbed sharply and may well be attributable to the weakness of the exchange rate of the Jamaican dollar, in which case holding inventory at a lower exchange rate will act as insurance coverage for loss in value of the Jamaican dollar. The increase in inventories could well be that sales were taking place at a much slower pace than anticipated based on the hike in sales in the prior quarter.

Production improvement | AMG told its shareholders last year that the new 10,000 square feet warehouse facility was completed and will allow for additional space to stock raw material and finished products as well as expand the production capacity. The facility boasts two loading bays which will enable loading and unloading containers and minimise damage to the rolls. It will enable the company to store raw materials in a secure and proper environment. A paper clamp forklift was acquired and enables moving paper rolls in a more efficient manner.

A new two-colour printing and rotary die cut machine is installed and in production. This acquisition increased production as well as widens the product base. A partition machine was also acquired, expanding the product offering to service companies that package glass products.

Management decided to rearrange the shift system to accommodate a third shift in the near future. The new hours will be 6am to 2pm and 2pm to 10pm. This will eliminate the down time as well as minimize the overtime.

Filed Under: Company News, Company Results Tagged With: ,

JSE: Market gives back but not much

July 11, 2013 by

Thursday, 11th July 2013 | Sagicor Life was the dominant stock in Thursday’s trading as 1.59 million units with a value of $13. 49 million were traded by Sagicor Investments in crosses that saw the stock dip to $8.45. Next in volume was junior market listing, Lasco Financial, with 5.46 million units trading between $1.30 and $1.31 valued at $7.1 million. Over 5.3 million units were bought by Mayberry Investments on behalf of clients.

In the day’s activity, 26 stocks accounted for 10.5 million units at a value at $30.1 million. The advance decline ratio was 5 advancing to 4 declining but all the indices moved down moderately with the exception of the US dollar index and the cross listed that had no trades.

Main Market | The all Jamaica Index lost 528.73  points to close at 87,706.14 and the JSE market index fell by 300.90 closing at 86,677.83.  Jamaica Broilers traded 72,000 units to close at $5.10 down 10 cents, NCB traded 20,000 at $19.50 and D&G traded 41,600 at $5. Jamaica Producers gained 49 cents to close at $20 with small volume traded.

Junior market | 12 stocks in the junior market traded as the index closed down 9.93 points to 814.85 traded. Access Financial traded just 1,000 shares and gained 55 cents to close at an all-time high of $9.05. Cargo Handlers traded at a 52 weeks high of $13 but with just 500 units, the stock gained $2 in the process. Blue Power traded up by 15 cents to close at $10.15, just over 23,000 shares changed hands. Lasco Distributors closed down 10 cents as 543,000 shares traded at a value of $871,000 and Lasco Manufacturing fell 5 cents to $1.65 with 1.66 million shares trading at a value of $2.75 million. AMG Packaging with came out with third quarter results today showing a reduction in the latest quarter versus that of 2012, but higher nine months results than for the similar period last year, traded 187,6000 units and closed at $4.25 with no change in price. 75,000 shares that were on offer for weeks at $4.70 were sold today at $4.25 each at 11 am which seems to have been influenced by the results.

Proven Investment Preference shares traded 507,000 units valued at $2.58 million, there was no trades in the ordinary shares. There is still no stock on offer at the close as was the case yesterday. There is a bid for more than 200,000 units at US$.115 per share.

Market intelligence | Cable & Wireless selling continues, but the sellers seem to be holding out for prices at 14 cents or more as the amounts offered at 15 cents remain in excess of 29 million shares, while the few quantities for the few bids have not increased much. RJR still has a bid at $1.23 for 4.9 million units and there has not been much change to the supply. Good support exists for Sagicor Life at $8.40, Carreras support is pretty good at $53.50 and more bids have come in for the stock close to $54. Demand seems to have pulled back for Jamaica Broilers, even as the supply does not seem overwhelming. Grace Kennedy supply of 700,000 units at $61 still remains as a barrier for upward price movement for the time being. Mayberry’s sell order of Blue Power supply has fallen to 216,000 units at $10.50 as 7,400 units were traded today at that price. There are good bids in the market for JMMB’s stock between $7.85 and just over $8, decent supply is listed at $10.50 and above.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer market sentiment indicator shows that bids for 5 stocks were higher with 4 stocks having offers lower than their last selling price. This fluidity here is an indication of cautiousness currently in the market.

New issue IPO | Eppley limited a subsidiary of Musson Group, is the latest company to make an appeal to the public with an initial public offering contained in a prospectus just released today. The shares are clearly not for the average investors, with a price of $277 each when it opens on Monday 22 July 2013 and only 218,999 shares will be available for subscription to raise $82.6 million.  The broker is Proven Wealth Management. IC Insider will have a full assessment of this offering as well as the results for AMG Packaging.

JSEIndicesJul11

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