Jamaica Broilers stock traded at $8 for a gain of 98 percent this year to date, partially spurred by 191 percent jump in after tax profit for the July quarter, to $331 million from $114 million in 2014.
Revenues for the quarter climbed 13 percent to $9 billion which, compared to the $7.8 billion in 2014. Earnings per stock amounts to 27.58 cents against 9.47 cents in the corresponding period last year.
Gross profit grew much faster than revenues at 32 percent to $2.28 billion over the corresponding quarter last year and gross profit margin rose to 25.54 percent from 21.88 percent in 2014. The fall in world market prices for energy and corn along with the closure of the ethanol operation would have contributed to some of the reduction in direct cost. Distribution and selling cost climbed to $248 million from $226 million and administration and other expenses rose by 17.5 percent to $1.5 billion.
Free cash flow from operations generated $851 million leading to cash and investments of $1.8 billion at the end of the quarter, down from $2.3 billion in 2014 as the company repaid just over $300 million in loans and $545 million in payables while receivables growth consumes $380 million, year over year.
Segment results show the Jamaican operations enjoying a marked improvement over 2014 with segment profit of $697 million in the 2015 July quarter, from $448 million reported last year. “We are recording increased sale volumes in poultry and feed products. In addition our focus on cost containment and improvements in the production processes for poultry and feed are bearing fruit,” the company said in its report to shareholders. The US segment show 31 percent sales growth to $2.07 billion from $1.58 billion in 2014 but slightly lower segment profit of $266 million versus $271 million while the Haitian operation performed below that of the prior year period.
The company stated that “Operations are now at an optimal level with respect to the sale of our main product –fertile eggs for the broiler industry. We expect steady growth in other product lines in this segment. In the Other Caribbean Operations, Haiti Broilers SA has increased production and sale of table eggs to 13 percent of the market, compared to 8 percent at the end of the first quarter last year. The positive effect of this volume growth has however been neutralized by significant increases in operating costs due to the depreciation of the Haitian Gourde against the US dollars during this quarter. Our move into sustained profitability in Haiti has therefore been delayed. This segment was also impacted by impairment and mark- to- market adjustments, amounting to $44 million, on certain financial assets in two of our St. Lucian subsidiaries”.
Jamaica Broilers should end up with earnings in the region of $1.30 for the 2016 fiscal year ending April compared with 86.4 cents for 2015. The PE for the stock is just over 6 at the current price of $8. The company declared the payment of an interim dividend of 10 cents per share, payable on November 13. In May this year a payment of 9 cents per share was paid.
191% profit surge for Jamaica Broilers
JSE gained 13% for week
The Jamaica Stock Exchange closed on Friday with an increase of 2,717.47 points, on the JSE All Jamaican Composite index to end at 133,725.27, to cap the week with a huge 13 percent increase. The sharp move is due to the price of Desnoes and Geddes (D&G) jumping with a gain of 130 percent to add several thousand points, to the main market indices. The All Jamaican Index is now just over 5,000 points away from the old record of 138,917.59, reached on 24th of January 2005.
A total of 16 stocks rose, with 3 declining as 23 securities, totaling 2,743,449 units valued at $51,084,948 changing hands, in all market segments. A total of 4 stocks ended at new 52 weeks’ closing highs. 
The JSE Market Index shot up by 2,431.62 points to 120,592.56, and the JSE combined index jumped 2,568.39 points to end at 125,132.75.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator had a reading of 15 stocks with bids higher than their last selling prices and 4 with offers that were lower.
In trading, Cable and Wireless closed with a loss of 1 cent as 81,600 shares changed hands to be at 51 cents, the stock ended with the bid at 57 cents to buy 204,500 shares. Caribbean Cement closed at $12 with 28,000 shares changing hands, Carreras traded 316,500 shares to close at $52.05 to gain 25 cents, D&G closed with 273,694 units changing hands to close at $30 with a gain of 33 cents. Gleaner traded 23,000 shares at $1.73 to gain 3 cents, Jamaica Broilers traded 31,243 shares to close at a new 52 weeks’ high of $8 with a gain of 85 cents,
Jamaica Stock Exchange had 36,200 shares trading at $8.60, for a rise of 65 cents as the company stands to see increased income, if trading continues to be bullish. JMMB Group traded 35,096 shares closing 50 cents higher at $9. National Commercial Bank closed with a loss of 50 cents with 24,100 shares trading to close at $31.99, Sagicor Group with 11,200 shares closed 50 cents higher at $14.50 for a 52 weeks’ closing high, Scotia Group ended with 114,012 shares trading at $25.20 after gaining 75 cents, Scotia Investments ended at $27.50 with 720,000 shares traded and Seprod traded 30,288 shares at $15 with a 5 cents gain.
Is this Honey worth buying?
Honey is a sweet product savoured by many, but is this Honey likely to attract many to buy into it? Junior Market listed Honey Bun is reporting first quarter results to December, which is not so sweet, but the results to come could get sweeter as the year unfolds based on many factors.
The company enjoyed increased sales of 11.6 percent, hitting $206 million and resulting in gross profit growing by 11.3 percent compared with the corresponding period last year. As gross profit margin fell slightly to 45.4 percent compared with 45.54 in 2013 and administrative and distribution costs rose by 17.4 percent, profit also declined, falling 17 percent for the quarter to $16.5 million or 17 cents per share. “This reduction was mainly due to increased distribution cost resulting from the takeover of a large contract distributor to maintain our customer service and the lease of vehicles due to accidents of two of our main distribution vehicles. Improvements in this area will be seen in the next quarter. Further, one time cost was incurred during this period as the building on the property acquired was demolished,” management reported, in a statement accompanying the financials.
In the last fiscal year to September, profit fell from $35 million in 2013 to only $23 million partly. The decline was due to added costs associated with the distribution of the products that rose by 20 percent when revenues grew by only 5.7 percent, gross profit margin slipped marginally in the last fiscal year, from 42 percent to 41 percent. But Honey Bun is set to benefit from a fall in the price of fuel used in the transport area and reduced energy cost based on a reduction in rates charged by Jamaica Public Service Company.
The bulk of profit is made in the first six months of the year, with the Easter period significant for sales. The September period is usually a period of losses. The company should be looking at earnings in the 50-55 cents region for the current year with reduced cost in some areas and continuation of growth in sales.
“Exports continue to rise and increased year over year corresponding period by over 150 percent. This was mainly due to the export of its Buccaneer Jamaica brand of fruitcakes to the UK market, where Honey Bun displayed their cakes in ASDA for the first time. We have also seen increased demand in the local market.” the company’s management reported.
At the end of the period, equity stood at $325 million in contrast to borrowed funds of only $64 million and cash funds of $33 million. The current asset ratio was 1.64 to 1.
The company’s stock last traded on the junior market of the Jamaica Stock Exchange at $1.91 and should enjoy some gains if the company hits the projected profit or comes close to it. The stock closed on Thursday with a bid to buy 20,994 units at $1.91, followed by a bid for 99,900 units at $1.80 but offers start at $2.90 to sell 11,000 units.
Honey Bun new low of $1.70
Activity Trading on the Junior Market closed with only securities traded and ended with 566,814 units valued at $860,032. The JSE Junior Market Index fell 7.75 points to close at 679.54, with the price of one stock advancing and five declining.
Honey Bun closed at a new high of $6.60 on Monday.
At the close of the market, there was one stock with a bid higher than the last selling prices and none with a lower offer. The junior market is lowly regaining strength but not there yet, with five securities closing with no bids to buy. Eight securities had no shares offered for sale, a positive indicator that prices could be rising shortly.
Paramount Trading ended with 19,429 shares trading with a gain of 6 cents to $2.62, AMG Packaging closed with 580 shares trading at $2.15, Lasco Manufacturing closed with 128,435 shares changing hands to close at $1.10, Access Financial closed with 11,000 units trading, the price slipped 4 cents, to $8.96. Dolphin Cove lost 40 cents to close at $8.10 and finished trading with 3,200 shares. Honey Bun ended trading with 7,000 shares changing hands to close 30 cents lower at $1.70, for a new 52 weeks’ low, Lasco Distributors traded 291,300 units with the price slipping 5 cents $1.45 and Lasco Financial traded 105,870 shares lower by 7 cents at 98 cents.
