Caribbean Cream, producers of the Kremi ice cream, has been spending big bucks for expansion and growth. That action has seen a major improvement in sales but little change in profits for the six months to August. While sales revenues climbed 20 percent in the two quarters this fiscal year, profit is down in the second quarter to August from $7.9 million to $1.35 million and for the six months, profit is flat at $17.8 million.
Gross profit climbed 29 percent to hit $58 million, but margin fell in the August quarter to 30 percent from 37.8 percent in the May quarter, putting the six months margin at 34 percent, from an increase in the gross profit of 44 percent, to $127 million from $88 million. Profit margin has improved in 2014 over the levels in the first and second quarters of 2013. Last year, gross profit margin was 26.5 percent for the August quarter and 27.3 percent for the half year. Management in their report to shareholders, indicated that the slippage in profit margin in the August quarter, is due to unexpected repairs and maintenance of equipment, as well as increased depreciation charge.
Forecast| Based on greater sales in the last half of the fiscal year, margins are expected to move into the 80 percent range, as direct overhead costs are fairly static. IC Insider is forecasting earnings of $77 million or 25 cents per share for the year ending April 2015, from projected revenues of $1.05 billion. The Kremi brand is now being introduced to the retail market to compete with other brands, mostly imported, on the shop shelves. Its better taste and pricing should ensure an increasing presence and sales in the future.
Financials| In the last 12 months the company acquired fixed assets amounting to $212 million, pushing total fixed assets net of depreciation, to $400 million, from $221 million at the end of August 2013. Inventories climbed to $115 million from $69 million a year ago, due to increased containers and raw materials, to facilitate expansion of the product line and increased sales. Receivables fell from $70 million to $33 million. Cash that was at $63 million has been used up leaving less than a million dollars at the end of August. Borrowings climbed to $163 million from $141 million, at the end of 2013 second quarter. Amounts due to creditors ballooned to $130 million from $61 million the year before.
Kremi invest for future growth
Only 3 junior market securities trade
The Junior Market closed trading, with a mere 27,140 units valued at $54,491. The JSE Junior Market Index fell 4.50 points to close at 659.36 as only 3 securities traded with all 3 declining.
At the close of the market, there were 5 stocks with bids higher than their last selling prices and 2 stocks with offers that were lower. The junior market continues to exhibit weakness with 11 stocks closing with no bids to buy. On the other hand there were 7 stocks that closed without offers to dell.
In market activity, Caribbean Producers with 20,000 units, closed 7 cents lower at $2.38, Consolidated Bakeries traded 6,640 units trading with a cent fall, to end at 80 cents and Lasco Financial with 500 shares, closed with a loss of 12 cents, at 85 cents.
Knutsford Express at new high
Trading picked up on the junior Market as 8 securities traded, the highest number for some time. At the close of the market, trading activity led to 2,405,521 units valued at $2,877,589 changing hands.
The JSE Junior Market Index increased 0.32 points to close at 663.86 as 3 stocks advanced and 3 declined with Knutsford Express closing at a new all time high.
At the end of trading, there were 3 stocks with their bids higher than their last selling prices and 2 stocks with offers that were lower. Although the number of securities trading picked up, the junior market still continues to show signs of weakness with 9 stocks closing with no bids to buy. On the other hand there were 7 securities that had no stocks being offered for sale.
At the close, Access Financial Services traded 2,295 shares to end with a decline of 2 cents at $10.48, Dolphin Cove with 3000 units trading closed at $8, Knutsford Express with 7,726 shares closed at $5.50 to gain 50 cents, the highest price since listing in January, Lasco Distributors put in 1,000,000 units at $1.15, Lasco Financial Services traded 919,500 at 97 cents, with a 3 cents decline, Lasco Manufacturing lost 6 cents while trading 220,647 units to close at 98 cents, Medical Disposables had 245,000 units changing hands at $2, up 10 cents and Paramount Trading gained 20 cents in trading 7,353 units at $2.70.
4 securities trade but bidding improves
The Junior Market closed trading with 767,730 units valued at $1,243,917 and Blue Power hitting a 52 weeks’ low. Tthe JSE Junior Market Index fell 2.86 points to close at 663.54 as only 4 securities traded with 1 advancing and 1 declining.
At the close of the market there was 6 stocks with the bid higher than the last selling price and 3 stocks with offers that were lower. The junior market continues to exhibit weakness with 9 stocks closing no bids to buy against 5 that had no stocks being offered for sale.
Medical Disposables with 51,500 units gained 2 cents to end at $1.90, Blue Power dropped $1.05 while there was dealing in 4,070 shares to end at $8, new 52 weeks’ low. Eppley 9.5% preference share closed with 75,130 units changing hands at $6.10 and Lasco Manufacturing ended at $1.04 while 637,030 units were active.
4 stocks trade on junior market
The Junior Market closed trading with only moderate interest and only 153,055 units valued at $196,918 changed hands. The JSE Junior Market Index increased 2.07 points to close at 666.40 as only 4 securities traded with 1 advancing and 1 declining.
At the close of the market there were 3 stocks with bids higher than the last selling price and 5 stocks with offers that were lower. The junior market continues to exhibit weakness with 9 stocks closing with no bids to buy, against 5 that had no stocks being offered for sale.
Lasco Manufacturing with 29,802 units, closed 2 cents higher at $1.04, Paramount Trading had 18,511 units trading, falling 2 cents to $2.50, Lasco Distributors traded 100,000 shares at $1.15 and Lasco Financial traded only 4,742 units at $1.
Low trading in junior market
The Junior Market had trading in only 404,855 units valued at $754,027. The JSE Junior Market Index fell 3.57 points to close at 664.33 as 6 stocks traded including one from the Preference section, with 2 advancing and 2 declining.
At the close of the market there were 4 stocks with the bids higher than the last selling price and 5 stocks with offers that were lower. The junior market continues to exhibit weakness with 10 stocks closing no bids to buy against 6 that had no stocks being offered for sale.
Lasco Financial traded 50,000 shares at $1 by gaining 5 cents followed by Lasco Manufacturing with 60,000 units to gain 2 cents to end at $1.02, Dolphin Cove traded 20,000 units at $8, Caribbean Producers traded 71,805 shares with the loss of 15 cents to end at $2.45 and General Accident traded 202,600 shares at $1.50, in losing 12 cents. Eppley 9.5% preference share traded 450 units at $6.10.
Purity’s 2014 profit & stock price falls
Periods of major economic adjustment negatively affecting consumers, can be tough for bakeries, as demand pressures tend to squeeze margins. That is exactly what happened to Consolidated Bakeries, better known as Purity, for the first six months of 2014.
For although sales’ revenues for the period to June 2014, grew 17.9 percent over the six months to June 2013, profit fell 19 percent to $14.7 million from $24.4 million in 2013. Profit, in the June quarter fell 28 percent to $7.3 million while sales’ revenues for the quarter rose 22 percent. During the six-months, Consolidated said, exports grew 25 percent in US dollars, over the same period last year.
According to management in their report to shareholders for the June results “revenue growth over the six month period in 2013, represent growth in all product categories. This growth is a result of our strategy to grow distribution and volume. During this period, price increases were low due to market competition and in a response to difficulties shoppers face.”
Gross profit| Gross profit margin that ended last fiscal year at 54 percent, fell to 44 percent in the March quarter, 47 percent for the June quarter and for the six months 46 percent. The decline was a major factor dragging profit down for 2014. For 2011, gross profit ended at 62 percent, leaving much room for improvement for management going forward.
Operating cost| comprising administrative, selling and distribution cost, rose sharply by 21 percent for the June quarter to $57 million and 15 percent for the six months, hitting $113 million, faster than the increase in gross profit.
The company has lots of work to do, to improve gross profit margin as well as the paltry return on equity of 6 percent for 2014.
Borrowed funds amount to $57 million at the end of June at a very comfortable level with equity at $518 million. Cash funds available amount to $111 million.
Property plant and equipment was increased by $17 million up to June 2014, additional machinery was ordered to build capacity.
Watch this one| The company has room to grow faster than the economy for a while, this can make it a good growth prospects for investors looking long term. IC Insider’s forecast for earnings per share is around 15 cents for 2014. It may not be until 2015 that the earnings could show improvement to help push the stock price upwards in a major way.
Lasco companies lift trading on junior market
Lasco water treatment machines, part of the new factory facility at the White Marl in St Catherine,
The executives of all three Lasco listed companies, hosted a briefing at which the companies performance for the financial year to March this year and results for the June 2014 quarter, were highlighted, along with explanations for some of the new developments, including the addition of more warehousing space, to meet projected increased demand and some of the prospects for growth going forward.
Fresh on the heels of the tour, the two main Lasco companies that will directly benefit from the expansion, traded the largest quantity for some time. Lasco Distributors traded 1.26 million shares and Lasco Manufacturing 1.78 million units.
The Junior Market had trading in 3,828,805 units valued at $4,547,128. The last time the junior market traded with such volume is September 9 when nearly 19 million units were traded. At the close of the market, the JSE Junior Market Index fell 3.01 points to close at 667.90. Only 4 securities traded, none advanced while 2 declined.
At the close of the market, there were 2 stocks with bids higher than their last selling prices and 6 stocks with offers that were lower. The likelihood of continuing weakness is reflected in the 9 stocks that had no bids to buy, against 6 that had no stocks being offered for sale.
In trading, General Accident with 613,089 shares lost 7 cents to end at $1.62, Medical Disposables closed at the lowest price since it was listed in December last year, by shedding 12 cents in ending at $1.88, while trading 172,587 shares. The stock price is close to the IPO price of $1.83. Lasco Distributors traded 1,264,872 units at $1.15 and Lasco Manufacturing traded 1,778,257 shares to close at $1.
No sign of Junior Market movement
Heating of raw material to make bottles for Lasco’s new drinks
At the close of the market there was 2 stocks with the bid higher than the last selling price and 6 stocks with offers that were lower. The likelihood of continuing weakness is reflected in the 10 stocks that had no bids to buy against 7 that had no stocks being offered for sale.
Lasco Distributors with 278,128 units, closed 1 cent lower at $1.15, Dolphin Cove traded 1,470 units at $8, Lasco Financial 4,657 shares at 95 cents and Lasco Manufacturing 278,832 units at $1.
Low junior market trading continues
There was trading in 5 junior market securities accounting for only 131,243 units, valued at $178,904, on Wednesday. The JSE Junior Market Index gained 2.73 points to close at 672.44 with 1 stock advancing and 1 declining.
At the close of the market there was 1 stock with the bid higher than the last selling price and 6 stocks with offers that were lower. The likelihood of continuing weakness in this markets segment, is reflected in the 10 stocks that had no bids to buy, against 6 that had no stocks being offered for sale.
In trading, General Accident with 5,000 units is the only stock to gain at the end of trading in the junior market with the price rising 7 cents to $1.69. Lasco Financial with 56,843 units, closed at 95 cents, Lasco Manufacturing put through 53,400 units at $1 and Sweet River Abattoir traded for the second time since listing in mid-September, accounting for 16,000 shares, the price slipped 4 cents back to its IPO price of $3.86.
Jamaican Teas 8% debenture traded 3,000 units with the price remaining at $100 each.
