Sagicor Group reports solid results

November 7, 2017 by

Sagicor Group climbed 23% for the year to September.


Sagicor Group continues to deliver reasonable growth in profit albeit from a modest increase in assets that grew 4 percent over the twelve months to September to reach $363.26 billion.
But things were not a great in all aspects of the group as the overall bottom-line growth would suggests. While the Individual Lines segment, generated profits that more than doubled that of the 2016 period, rising by 105 percent, the Employee benefits segment, delivered just 21 percent better returns than in 2016 but investment and commercial bank suffered moderate decline in profit of 2 and 6 percent respectively, while other operations turned a profit of $289 million into a loss of $197 million.
Profit for the nine-month period climbed 23 percent to $9.08 billion, than the $7.39 billion recorded last year while it grew modestly by percent 9.3 percent to $3.43 billion. Revenues for the nine months rose 18 percent to $53.53 billion and for the quarter it jumped by a strong 42 percent to $23.18 billion 2016 from $16.3 billion in 2016. The earnings per stock unit are 88 cents for the quarter and $2.34 for the year to date compared to $1.89 for last year. For the 2016 the group earned $2.90 per share which should end up around $3.50 per share by year end and importantly, even higher in 2018.
The big rise in cost has been changes in insurance and annuity liabilities moving from $2.6 billion in the 2016 quarter to $8.3 billion and from $10.8 billion to $13.3 billion in the September quarter.
Sagicor traded on Tuesday on the Jamaica Stock Exchange and ended at $37.60.

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Chlorine to boost Paramount’s margin

November 7, 2017 by

Paramount Trading is expanding its operations by offering chlorine and bleach products for contract manufacturing and through a joint venture with Allegheny Petroleum into lubricants.
“The Company recently completed construction of the infrastructure required for a new chlorine and bleach plant at its 6 East Bell Road, Kingston, which will be outfitted with state of the art equipment and advanced technology. The Company plans to commence operation of the plant in February 2018,” the release from the company states.
The Company also advises that it entered into an Asset Sale Agreement to acquire the bleach plant equipment and other assets from Seprod, for its new chlorine and bleach operations. This acquisition is in line with the Company’s goals to continuously strengthen its presence as a manufacturer in the chemicals market, and will complement the Company’s existing offerings. Paramount, Chief executive Hugh Graham said is the largest importer of chlorine into the island and that is also exports the product to the Eastern Caribbean.
Currently chlorine is imported in 150 pound containers, with the new facility chlorine will be imported in 2 tons containers which will be used to fill smaller 150 pounds containers, the by-product flowing from the process is bleach, Hugh Graham advised IC Insider.com. The net effect will be improved margins and lower cost. The deal with Seprod will come into effect in February after Seprod exhausts their inventories. This will mean lower cost for Seprod as Paramount packages bleach for Seprod.
The new operation is expected to boost profit at Paramount Trading that enjoyed a 126 percent turn-around in profit for the first quarter to August this year to $34 million from a 31 percent increase in revenues to $331 million. “Yes Alpart was one of our customers in the past when the plant was operating and they have returned now that they have reopened and was a major part of the jump in sales” in the recently concluded quarter, Graham confirmed.
The construction of the blending plant and laboratory, in conjunction with Alllegheny Petroleum is will be completed within a few weeks and is expected to be up and running in early 2018 Graham advised.
Based on discussions we are having the US$5 million that Graham advised was likely two years ago is likely be higher he indicated.
The stock jumped on Monday to $3.59 on the Junior Market of the Jamaica Stock Exchange.

Filed Under: Company News, General Business News Tagged With: , , , ,

Main market drops 1,314 points – Monday

November 6, 2017 by

Trading on the Main Market of the Jamaica Stock Exchange on Monday closed with the market indices falling with the JSE All Jamaican Composite Index dropping 1,314.00 points to 318,833.12 and the JSE Index declining 1,197.20 points to close at 290,493.04.
Trading resulted in 24 securities changing hands, 7 advanced, 8 declined and 9 traded firm with 894,417 units valued at $17,805,863 compared to 4,118,253 units valued at $67,698,071 on Friday. There were no security trading in the US dollar market, resulting in with the index remaining at 180.67.
Trading ended with an average of 37,267 units for an average of $741,911 in contrast to 164,730 units for an average of $2,707,923 on Friday. The average volume and value for the month to date amounts to 159,395 units valued at $2,804,887 and previously, 200,104 units valued at $3,492,546. In contrast, October closed with average of 1,185,251 units at $16,528,582 for each security traded.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading for the main and US dollar market shows 8 stocks ended with bids higher than their last selling prices and 2 with lower offers.

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

Lasco Manufacturing results disappoint

November 6, 2017 by

There was bad news and good news for Lasco Manufacturing shareholders embodied in the September quarterly report that was just released on Friday, after trading.
The good news is that the September quarter’s revenues and profit were greater than that of the first quarter to June, but far worse than for the similar period in 2016. The other good news is that “the outlook for the full year remains positive as the evidence shows that we are heading in the right direction and measures are in place to deliver improved results,” the management reported to shareholders.
When revenues rise in most manufacturing operations there is usual increase efficiency as overhead cost tends to rise more slowly than revenues, thus resulting in an increase in gross profit margin, the reverse is also true. This can be seen from Lasco operations with gross profit margin falling form 34 percent in 2016 to 31 percent in2017. In the quarter, revenues fell 11 percent to $1.986 billion while cost of sales fell only 7 percent to $1.36 billion but Gross profit dropped 12 percent to $524 million by $131 million.

Bottle heating machine at Lasco Manufacturing.

Operating expenses grew $46 million or 15 percent to $361 million and profit after tax fell sharply to $103 million from $363 million in 2016, resulting in earnings per share of just 5 cents, down from 9 cents in 2016. For the six months period, revenues fell by 12 percent to $3.5 billion from $3.95 billion in 2016. Gross profit dropped 17 percent to $1.1 billion from $1.32 million.
Operating expenses grew $85 million or 14.5 percent to $670 million and profit after tax fell sharply to $337 million from $587 million in 2016, resulting in earnings per share of 8 cents. “The increase was primarily due to growth in marketing investments to support our brand in an increasingly competitive environment” management stated.
IC Insider.com projects profit for the year to March 2018 at 18 cents and 30 cents for 2018 of course the out turn is going to be dependent on a lot of what new products can deliver in sales.
At the end of September, Lasco has shareholders’ equity of $4.6 billion with borrowings of $1.58 billion with $265 million to be repaid within twelve months and overdraft of $353 million. Trade receivables stood at $1.76 billion with inventories of $719 million while trade payables is at $1 billion.
The stock traded on Friday at $4.60 at a PE of 25 times 2018 earnings and 16 times 2019.

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

JSE main market falls back – Friday

November 3, 2017 by

Trading on the Main Market of the Jamaica Stock Exchange ended on Friday with the JSE All Jamaican Composite Index declined by 1,443.17 points to close at 320,147.12 and the JSE Index declined by 1,314.89 points to close at 291,690.24.
At the close of market activity, 25 securities changed hands in the main market, 11 advanced, 10 declined and 4 traded firm with 4,118,253 units valued at $67,698,071 compared to 7,356,609 units valued at $123,516,599 on Thursday.
In US dollar market activity, the US dollar market index slipped 0.21 points to 180.67 as 3 securities traded with 2 declining and one remaining unchanged, leading to the 61,625 units trading with a value of US$54,145. Total trading in the two markets amounted to $74,574,532.
Trading ended with an average of 164,730 units for an average of $2,707,923 in contrast to 294,264 units for an average of $4,940,664 on Thursday. The average volume and value for the month to date amounts to 200,104 units valued at $3,492,546 and previously 218,920 units valued at $3,909,899. In contrast, October closed with average of 1,185,251 units valued at $16,528,582 for each security traded.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading for the main and US dollar market shows 7 stocks ended with bids higher than their last selling prices and 5 with lower offers.

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

Paramount adds chlorine & bleach

November 3, 2017 by

Paramount Trading expanding into Chlorine and bleach processing.

Paramount Trading is expanding its operations by offering chlorine and bleach products for contract manufacturing, the company reported.
“The Company recently completed construction of the infrastructure required for a new chlorine and bleach plant at its 6 East Bell Road, Kingston 11 location, which will be outfitted with state of the art equipment and advanced technology.
The Company plans to commence operation of the plant in February 2018,” the release from the company states.
The Company also advises that on 26 October 2017 it entered into an Asset Sale Agreement to acquire bleach plant equipment and other assets from Seprod, for its new chlorine and bleach operations. This acquisition is in line with the Company’s goals to continuously strengthen its presence as a manufacturer in the chemicals market, and will complement the Company’s existing offerings.
Paramount Trading, enjoyed a big turn-around in profit for the first quarter to August this year, with an increase of 126 percent, to $34 million from a 31 percent increase in revenues to $331 million.
The directors’ report that accompanied the August quarterly results stated that they have “an optimistic outlook for the rest of the year and is very excited by the opportunities that will be realized. The construction of the blending plant and laboratory, in conjunction with Alllegheny Petroleum is slated to be complete during the next quarter.”
The stock currently trades at a PE ratio of 15 with the price at $3 on the Junior Market is in against the line with the market. What is true, is the nimbleness of management to identify new income generated opportunities that makes staying close to the stock potentially profitable.

Filed Under: Breaking News, Company News, General Business News Tagged With: , , , , ,

Lasco Distributors drop to $7

November 3, 2017 by

Lasco Distributors shares dropped to $7 with 257,123 units trading after the courts handed partial judgement in its case for damages against Pfizer resulting from an injunction from selling the drug Salts of Las Amlodipine in 2005.
Lasco’s claimed US$300 million but the court is saying that the amount is too high based on the evidence presented.
In an interview with Lascelles Chin in 2014, he confirmed that the amount was sales estimated to be lost. In such cases the amount to be claimed would be loss of profits. From all indications, the loss is unlikely to be more than 50 percent of this amount. Based on the exchange rate of J$59.06 used to compute the inventory losses from disposal of the drug for Medimpex, the loss is likely to be priced using this rate with interest to be computed at the local interest rates.

Filed Under: Breaking News, JSE Junior Market, Stock Market Tagged With: , , , , ,

Juniors resume rally

November 2, 2017 by

Trading picked up on the Junior Market on Thursday with almost three times the levels on Wednesday as 18 securities changed hands, resulting in an exchange of 1,808,817 units valued at $8,566,954.
A total of 23 securities traded on Wednesday, accounting 696,098 units valued at $3,413,352. At the close of market activities, the prices of 5 securities advanced, 7 declined and 6 remained unchanged, leading to the Junior Market Index advancing 19.87 points, to close at 3,228.85.
Trading ended with an average of 100,490 units for an average of $475,942 in contrast to 30,265 units for an average of $148,407 on Wednesday. The average volume and value for the month to date amounts to 61,095 units valued at $292,202. In contrast, October closed with an average of 74,690 units valued at $362,548 for each security traded.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice| bid-offer indicator reading shows 2 stocks ended with bids higher than their last selling prices and 5 with lower offers.
At the close of the market, Blue Power concluded trading at $45, with 1,000 units, CAC 2000 settled 45 cents higher at $6.95, with 1,103 shares, Caribbean Flavours traded 10 cents higher at $12, with 3,205 shares, Caribbean Producers finished trading with a loss of 9 cents at $3.70, with 27,500 units, Express Catering traded 25 cents higher at $4.75, with 18,300 stock units. General Accident settled with a loss of 10 cents at $3.01, with 7,324 shares, Honey Bun finished with a loss of 30 cents at $4.60, with 500 shares, Jamaican Teas ended trading at $4.10, with 25,971 units, Jetcon Corporation ended with a loss of 4 cents at $4.80, with 159,841 shares. Knutsford Express ended trading at $14.80, with 4,226 shares, Caribbean Cream finished at $5.50, with 20,000 shares, Lasco Distributors settled 13 cents higher at $8.14, with 299,753 shares, Lasco Financial finished at $5, with 145,831 stock units. Lasco Manufacturing finished 1 cent higher at $4.40, with 150,582 units, Medical Disposables settled with a loss of 15 cents at $5.65, with 2,784 shares, Main Event finished at $5.60, with 82,039 shares, Paramount Trading finished trading with a loss of 1 cent to close at $2.99, with 684,249 units and Stationery and Office settled with a loss of 45 cents at $4.85, with 174,609 stock units.
Prices of securities trading for the day are those at which the last trade took place.

Filed Under: Feature Stories, JSE Junior Market, Stock Market Tagged With: , , , , , , , , , , , , , , , , , ,

All Jamaica in major recovery – Thursday

November 2, 2017 by

NCB closes at new record high of $109 on Thursday.

The JSE All Jamaican Composite Index advanced 2,455.94 points to close at 321,590.29 and the JSE Index advanced 2,237.64 points to close at 293,005.13 as NCB Financial jumped $2.99 to a record close of $109.
Trading ended on the Main Market of the Jamaica Stock Exchange on Thursday with 25 securities changing hands, 8 advanced, 8 declined and 9 traded firm with 7,356,609 units valued at $123,516,599.
There was trading in 2 securities In the US dollar market leading to the JSE US dollar Index falling 4.82 points to 180.88 as 5,802 shares with a value of US$1,474, bringing the total trades in the two markets to J$123,703,808. Wednesday’s trading in contrast to the increase trading on Thursday was 2,932,638 units valued at $60,248,652 on Wednesday.
Trading ended with an average of 294,264 units for an average of $4,940,664 in contrast to 133,302 units for an average of $2,738,575 on Wednesday. The average volume and value for the month to date amounts to 218,920 units valued at $3,909,899 previously. In contrast, October closed with average of 1,185,251 units valued at $16,528,582 for each security traded.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading for the main and US dollar market shows 7 stocks ended with bids higher than their last selling prices and 5 with lower offers.
In the main activity Berger Paints closed 30 cents higher at $16.30, with 16,296 shares, Cable & Wireless ended trading at $1.10, with 530,316 shares, Caribbean Cement climbed $3.44 higher at $34.95, with 2,500 stock units. Carreras settled at $11.50, with 712,762 units, Grace Kennedy ended trading with a loss of 1 cent at $41.99, with 97,977 shares, Jamaica Broilers traded at $18.60, with 354,001 stock units, Jamaica Producers concluded trading with a loss of 10 cents at $15.80 and with 4,035,262 units trading. Jamaica Stock Exchange settled 4 cents higher at $6.80, with 16,170 shares, JMMB Group ended with a loss of $1.19 at $28.51, with 84,297 shares, Kingston Properties concluded trading at $8, with 15,950 stock units, Kingston Wharves finished trading with a loss of 15 cents at $32.50, with 35,770 units. Mayberry Investments finished trading 5 cents higher at $4.35, with 306,697 shares, NCB Financial Group ended $2.99 higher at a record close of $109, with 60,063 shares, 138 Student Living closed with a loss of 10 cents at $5.40, with 22,900 shares, 1834 Investments finished with a loss of 20 cents at $1.15, with 109,594 stock units, PanJam Investment closed at $42, with 82,529 units, Pulse Investments concluded trading with a loss of 6 cents at $1.90, with 4,064 shares. Radio Jamaica settled at $1.15, with 161,673 stock units, Sagicor Group settled 95 cents higher at $39, with 407,273 units, Sagicor Real Estate Fund settled 30 cents higher at $14.50, with 75,122 shares, Salada Foods Jamaica settled with a loss of $1.30 at $8.50, with 10,000 shares. Scotia Group ended $1.28 higher at $51.79, with 131,230 stock units and Supreme Ventures settled at $11.80, with 42,177 shares. In the main market preference segment, JMMB Group ended with a loss of 1.19 cents at $28.51, with 84,297 stock units, and in the US dollar market Productivity Business Solutions traded 402 units at 58 US cents and Proven Investments traded 5,400 units at 23.99 US cents.
Prices of securities trading for the day are those at which the last trade took place.

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Wisynco Group IPO is imminent

November 2, 2017 by

NCB Capital Markets Manager, Origination and Structuring Stanley Thompson (left) exchanges laughs with Wisynco Group Chairman William Mahfood during a signing of the IPO agreement. Sharing in the moment, too, are Wisynco Chief Executive Officer Andrew Mahfood and PriceWaterhouseCoopers Director Fiona Hyman

Wisynco Group today announced its intention to offer shares in the company by way of an initial public offering (IPO), confirming IC Insider.com report yesterday.
Information gleaned is that the draft prospectus is being vetted by the Jamaica Stock Exchange, the Financial Securities Commission and the Company Office of Jamaica with the IPO expected to come to market before the end of this year and could happen in November.
Founded in 1965 by the Mahfood family, West Indies Synthetic Company (WISYNCO) began manufacturing ‘Iron Man’ water boots from a 6,000 square foot factory in Twickenham Park, St. Catherine. The company now ”owns and manufactures a portfolio of category-leading beverage brands such as WATA and its extension of cranberry flavoured-WATA, BOOM Energy Drink and BIGGA Soft Drink. In addition to its owned brands, Wisynco is the exclusive local bottler for the Coca-Cola Company, as well as third-party beverage brands such as SqueezZ and Hawaiian Punch also distributing for global giants such as Red Bull, Tru Juice, Freshhh, Kellogg’s, General Mills, Nestlé and others.
A rapidly-growing company, Wisynco has increased sales significantly in recent years moving from JMD 12.6 billion in 2013 to $21.2 billion in 2017. Over the last five years the company’s year-to-year sales growth has ranged between 9 – 21% with a compound annual growth Rate (CAGR) of 11.06% over the same period. The business has a strong gross profit margins, averaging approximately 36% since 2012.
Wisynco’s revenues are just under the $22.8 billion generated by Lasco Manufacturing and Distributor combined. With the above profit margin, gross profit would be $7.5 billion. The two Lasco companies have administrative, selling and distribution cost of $4 billion to March this year. IC Insider.com puts the cost for Wisynco at $4.5 billion per annum which would result in a pretax profit in the order of $3 million and after tax around $2.5 billion. If the company came to market around the mid-range of PE of 12, this would value it at $30 billion. An issue of 20 percent in the IPO, would target inflows be around $6 billion, but IC Insider.com gathers that a vastly smaller sum is being targeted to be raised by the company but some existing shareholders may seek to divest some of their shares.
According to William Mahfood, Chairman of the Wisynco Group, “the IPO will allow us to share the growth and

Wata produced by Wisynco

success of our business with a wide cross section of our customers and employees, especially following on the outpouring of wishes and support after the fire last year”
With over 350,000 square feet of warehouse, 110,000 square feet of factory space the company has over 700 sales-related full time employees.
We are a proud Jamaican company with a deeply rooted commitment to the country’s development.” Mahfood said. “Our stated mission is to improve the lives of our people which extends to all stakeholders –team members, customers, partners and now with the planned IPO to fellow Jamaicans alike,” Mahfood said.
NCB Capital Markets has been engaged as arranger and broker for the transaction with PricewaterhouseCoopers acting as financial advisors to the company.

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