The main market of the Jamaica Stock Exchange continued where it left off on Monday, hitting new highs just after opening at the start of trading on Tuesday.
With just limited trading, the All Jamaica Composite Indexrose 1,672.05 points to a record 404,772.34, beating yesterday’s high of 404,050.65 and the JSE Index gained 1,523.42 points to a record 368,793.40, bettering Monday’s high of 368,135.86. The Junior Market rose 8.90 points at the opening to 3,405.90.
With just 16 minutes of trading, both markets inched higher with the All Jamaica Composite Index rising to a record 404,958.30 and the JSE Index gained 1,523.42 points to a record 368,851.17 while the Junior Market moved up to 3406.05.
All Jamaica trades just 42 points shy of 405,000
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.
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
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.
All Jamaica just 1,700 points from 400K
The Jamaica Stock Exchange climbed sharply within just a minute of the opening of trading on Thursday, with the All Jamaican Composite Index surging to just under 5,800 points to a new record high and pushing the index within 1,700 points of the critical 400,000 points mark.
The All Jamaican Composite Index surging 5,783.43 points to a record 398,386.05 points and JSE Index surged 5,269.36 points to a record 362,974.75. The Junior Market is down 7.14 points to 3,406.44.
The rise in the main market is due to jump in the prices of Scotia Group trading at $64 and NCB Financial that traded at $123.01 and Kingston Wharves at $73.
All Jamaica less than 9000 points from 400K
The Jamaica Stock Exchange climbed more than 5,000 points after 25 minutes of opening with the All Jamaican Composite Index surging to just under 9,000 points from big resistance point of 400,000.
By just 4 minutes after 10 am, the All Jamaican Composite Index surging 5,502.66 points to a record 391,34026 points and JSE Index surged 5,013.54 points to a record 356,555.23. The Junior Market rose 2.53 points to a record 3,405.01.
The rise in the main market is due to large movement in Jamaica Broilers that traded at a new record of $33, NCB Financial that traded at $121, PanJam Investment trading at $57 and Scotia Group trading at $62.