Iron Rock experienced strong growth in the first quarter this year with gross written premium increasing 150 percent to $155 up from $62 million in 2017.
The company generated a loss for the period of $4.6 million well below the loss of $27.3 million recorded in the previous year’s March quarter. Net earned premium also rose sharply to $38.4 million from $9.7 million in the first quarter of 2017 for an increase of 296 percent. Other income consisted primarily of investment income for the period totalled $10.5 million 2017 of $6.2 million.
Claims Incurred for the quarter increased 36 percent to $17.3 million from $12.7 million in 2017. Operating Expenses 21 percent to $37.6 million from $31 million in 2017. The company incurred a reduced Underwriting Loss of $15 million versus a loss of $33.5 million in 2017.
The stock ended at $3 on Junior Market fell at the close of trading on Thursday.
Iron Rock post vast improved results
Good news push TOP 10 stocks
There were no new entrants this past week, to the TOP 10 list of stocks on the Jamaican Stock Exchange, but there was some good news with the acquisition by Stationery and Office Supplies of a book making business.
The acquisition is set to add to profit in year one, and investors responded by driving the stock to a new high. The stock that was facing some challenge to get bids around the $5.50 level, the stock traded at in the past few weeks, jumped to $6 on the same day the announcement was made. With annual sales estimated around $130 million that could rise with greater focus on the operations and more capital available to support it, IC Insder.com has up graded the earnings to 90 cents for this year. The company is one of a number of Junior Market listings expected to post positive gains in the 2018 first quart over that of 2017.
The other good news for the market was a further fall in Treasury bill rates and another month of slightly negative inflation for March with the first quarter inflation also being negative. While the main market hit two new record highs during the week. While the JSE main market is caught up in a wedge formation and waiting for a big break out which could happen any time, the Junior Market that was in a downward drift from late 2017 now seems to have support from the 200 day and 120 day moving averages with the short term moving average now above both longer term ones. The market is being steered by two support lines with one going back to 2010 and another going back to early 2014.
Investors pressured recently listed Elite Diagnostic during the week as they reacted negatively to the December quarter results with lower profit that the previous year’s results. Investors seemed to have responded the Berger Paints bullish reading in the annual report as they bought the stock in increasing volumes during the week, leaving the price at $19. The Managing Director had reported that “the outlook for 2018 and beyond is extremely positive. The Berger brand remains strong and continues to dominate the local market with strong brand equity and a reputation for quality. With GDP projected to grow by at least 1.5% in 2018, construction activity and the demand for coatings is expected to remain relatively strong for the next two to three years. Plans are already being implemented to expand the company’s local distribution and product range as well as to improve our level of customer service and responsiveness. In 2018, there will also be greater emphasis on building out exports by targeting new markets in Central America and the Greater CARICOM region.”
Palace Amusement continues to enjoy expanded interest from investors with the continued success of the movie Black Panther. After more than two months of showing it still has two showings per day in all three cinemas, but the attraction for the stock is much more than this movie.
Strong buying came in for Barita Investments at $9.50 during the week. JMMB Group gained more ground, as the block out period for insiders to trade in the stock closes and the stock moved up to $28.32, resistance is just over $31 an area investors should be on the lookout for in the short run.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 6 compared to an average PE for the overall main market of 10 based on 2018 estimated earnings. The main market PE remains at 7 for the top stocks, compared to a market average of 12.7.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 40 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be of 20 times earnings and main market stocks traded at a discount of 42 percent to the market.
JSE trading in record territory
Kingston Wharves jumped to a record $50 in trading 2,600 shares on Friday morning on the main market of the Jamaica Stock Exchange and helped to push the All Jamaica Index to an all-time record.
At 11.22 am, the JSE All Jamaican Composite Index climbed 3,135.84 points to a to be in intraday record high territory of 328,106.42 and the JSE Index was up 2,850.36 points to 298,942.03 another record level. Jamaica Producers traded 1.85 million units and rose to $16.
The Junior Market was more subdued and traded with a rise of just 3.52 points rise to 2,904.67.
SOS writing book manufacturing starts May
Stationery and Office Supplies (SOS) purchase of equipment used to manufacture various types of writing books as well as the brand name SEEK.
“This purchase will allow SOS to enter the manufacturing industry in Jamaica starting with books and a plan to continue to manufacture other stationery products in the future”, SOS states.
Machinery purchased includes the following: Ruling machines, Guillotines, Gluing Machines, Stapling Machines and Book Presses.
The total value of the purchase is $60 million and is being financed through a bond with Jamaica National amounting to $80 million at an interest rate of 8 percent, and a duration for repayment of 7 years. The company expects that the total investment including machinery, raw materials and renovations will exceed $80 million. The Company said with this expansion, SOS initially be employing an additional 25 persons with production expected to start during the first week of May 2018. Prior to the acquisition a compliment of 40 persons were employed with a mixture of full time and part timers. Revenues expected in the first twelve months is estimated at $130 million but could rise beyond this, as the business maintains most of the customers for books and SOS leverage their existing customers base and others for more business. According to Allan McDaniel, Deputy Managing Director & Director of Warehousing and Logistics, the previous owner operated for about six months per year, but SOS will be able to operate full time and at less cost. The operation will be housed in the adjoining building they acquired last year and effectively fills out the space with their expanded inventories occupying about half. Profit margin is attractive and will almost ensure that the company will profit from it, this year, with growth estimated by them to likely be in the 30 percent region coming from both local and export sales. The new operation could deliver around $40 million to profit in 2018 and around $70 million in 2019, IC Insider.com estimates. Speaking about SOS operations, McDaniel would only say they are happy with the first quarter, that was helped by an increased inventory, now around $170 million compared to $117 million in March last year, just ahead of the public share offer. McDaniel said that while some of the fellow businesspersons are talking about a weak first quarter, SOS expects to report continued growth.
The company’s stock ended at a record close of $6 on the Junior Market of the Jamaica Stock Exchange on Tuesday gaining 200 percent since it was listed in August last year.
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KLE profit rise from ongoing operation
Profit at KLE Group fell 95 percent for 2017 to $9 million from $162 million in 2016 but the 2016 result was boosted by a one off gain from sale of shares in a subsidiary, amounting to $164 million.
Without the one gain profit would have increased sharply from just under $2 million in 2016. Earnings per share ended at 6 cents. The company actually suffered a loss in the order of $12 million in the December quarter. Sale revenues that rose 10 percent for the year, to $215.4 million from $196 million in 2016.
Gross profit margin remained at 68 percent in both years while gross profit rose by 9 percent over 2016. Other income closed the year at $17 million, remaining constant with 2016 excluding one off gains.
Other operating and administrative expenses rose just 6 percent to $152.5 million while Finance cost declined to $2.4 million from $2.76 million in 2016.
Importantly, gross cash flow brought in $22 million but growth in receivables and reduction in payables reduced the net cash for the year and investments activities left cash at the $7 million level.
At the end of December, shareholders’ equity stood at $140 million with borrowings at just $14 million. Net current assets ended the period $64 million and current liabilities at $57 million.
The stock traded at $2.50 on the Junior Market of the Jamaica Stock Exchange with a PE ratio of 12.5 times 2018 IC Insider.com forecasted earnings of 20 cents.
tTech is back Carib Producers exits TOP 10
tTech is a new entrant to the Junior Market TOP 10 stocks and replaces Caribbean Producers that has been in the TOP 10 for several months.
Caribbean Producers closed at a 52 weeks high of $5 at the end of last week and fell out of the TOP 10. PanJam Investment price moved to $43 and just held on in the main market TOP 10. The price of Palace Amusement fell during the week to end at $1,000 and moved up on the top ten list as a result. Caribbean Cement price dropped sharply from $42 in the previous week to $35, but closed with the bid at $37.95 and moved into the number 5 spot as a result.
Cable & Wireless is unofficially the number one rated stock in the main market list based on IC Insider.com forecast, of profit for the current year, flowing from increased revenues and a sharp fall in interest cost. Uncertainty surrounding continued listing keeps it off the official list.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 6.5 compared to an average PE for the overall main market is 10 based on 2018 estimated earnings. The main market PE is 6.6 for the top stocks compared to a market average of 12.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 36 percent to the average for the Junior Market Top stocks but it’s a third of what the average PE for the year is likely to be, 20 times earnings and main market stocks traded at a discount of 46 percent to the market.
Purity can turn around 2017 loss this year
Profit melted away at Consolidated Bakeries for 2017 with a loss of $40 million down from a profit of $10 million in 2016 from sale revenues that slipped from $880 million to $863 million.
The company continued the loss right through to the year with a loss of $9 million before differed tax charge in the final quarter but the 2017 loss was lower than the loss of $20 million in the same period in 2016. Closer examination of the results show hope for the company going forward, into 2018
While revenues for the year fell 2 percent it rose 10 percent in the December quarter and helped to improve gross profit to 39 percent from just 31 percent in 2016 quarter. The 2017 final quarter was also much higher than the 35 percent for the full year.
Cost appeared mixed, with marketing and sales expenses rising 31 percent to $55 million and 17 percent to $158 million as this category of cost out stripped revenues by a big margin.
Administrative expenses fell 41 percent to $23 million in the quarter and fell 3 percent for the year to $158 million. Finance cost jumped in the quarter, to $16 million from $7 million, in 2016 and from $12 million to $19 million for the year.
Revaluation of the Jamaican dollar cost the company $4 in the final quarter and resulted in reduction in other income ending with a negative $2.5 million versus $5.5 in 2016 and just 875,000 for the full year versus $9 million, while the big jump in Finance cost in the December quarter seems to be one off, as such without these two items the company would have reported a profit for the quarter and augurs well for the 2018 results.
Gross cash flow was negative $7 million but growth in receivables, inventories, addition to fixed assets and drawn down on investments was offset by net loan inflows and increased payables and increased in bank overdraft ended at $74 million. At the end of December, shareholders’ equity stands at $716 million which was boosted by gain on revaluation of land and building by $206 million. Borrowings at just $135 million. Net current assets ended the period $92 million well over payables of $77 million.
Earnings per share was negative for the quarter and the fiscal year. The stock traded at $2 on the Junior Market of the Jamaica Stock Exchange with a PE ratio of 12 times 2018 estimated earnings of 17 cents. Earnings could be more if revenues were to increase above 10 percent for 2018.