Q3 profit jumps 43% for the Lab

Profit jumps 43 percent before tax at Limners and Bard trading as the Lab, with revenues up 41 percent for the third quarter. Aftertax, profit climbed 66 percent from $12.7 million to $21 million for the July quarter.
Nine months profit, rose 41 percent to $68.6 million, from $486 million, while profit rose 17 percent from $88.6 million before tax in 2019, to $107.8 million. In 2019, the Company incurred a tax charge of $19 million for the nine months. Profit for the nine months equals the 2019 full year pretax profit of $107.5 million.
The cost incurred in generating operating revenue grew faster than incomes with an increase of 46 percent for the nine months to $459 million and 48 percent for the quarter to $154 million.
Administration expenses and other costs rose 47 percent to $119 million for the nine months and by 31 percent for the quarter to $40 million. In a report accompanying the results, the chairman, Steven Gooden and Kimala Bennett, Chief Executive Officer, stated, “these included a systemization initiative and training to assist inefficiencies linked to our growth drivers and a pay-out of 50 percent of our 2019 employee profit share.

Kimala Bennett, Chief Executive Officer of The Lab.

The Company earned 2 cents per share in the quarter and 11 cents for the nine months. IC Insider.com projects the full-year earnings ta 16 cents per share, with expenses traditionally lower in the final quarter. The Company generated cash flows from operating of $116 million, up from $77 million in 2019.
Shareholders’ equity climbed to $45 million from $332 million at the end of July 2019. Current assets stand at $529 million including Cash and cash equivalents of $384 million, up from $213 million in July 2019. Current liabilities amounted to $134 million leaving strong net current assets at the end of the period. Borrowings stood at just $66 million.
The stock last traded at $2.80 on the Junior Market of the Jamaica Stock Exchange on Monday for a PE ratio of 17.5. With the current year ending a little over a month from now and IC Insider.com projecting 28 cents earnings per share for fiscal 2021, the stock can be considered appropriately priced.

Limners & Bards LAB Q2 profit jumps 54%

Profit rose 26 percent before tax in the second quarter for Limners and Bards (the LAB) 20 percent for the six months to year-over-year to April this year. With no corporation taxes payable since listing in 2019, profit after tax increased 52 percent for the six months to April and 54 percent for the second quarter.
Net profit soared from $25 million in 2019 to $38 million for the quarter and the six-month net profit was up 52 percent, at $87 million from $57 million. The Lab incurred Corporation taxes of $15 million for the half-year for 2019 and $5.4 million for the 2019 April quarter. Profit for the half-year was 81 percent of pretax profit for all of 2019 when the company reported $107 million in profit before taxation, while revenues are 75 percent of the 2019 outturn. The principal activities of the company are production, media and advertising services.
Growth in profit in 2020 to date is disappointing considering the blistering pace that revenue grew by, with an increase of 44 percent for the quarter, to hit $208 million from $145 million in 2019 and 41 percent for the six months, to $471 million from $334 million in 2019. Growth over the six months for revenues “was driven by growth in media by 72.5 percent increase and agency, up 78 percent,” Steven Gooden, Chairman and Kimala Bennett, CEO, reported to shareholders in their joint commentary accompanying the quarterly. The sharp rise in revenues follows a 31 percent increase in the 2019 fiscal year over 2018.
Direct costs increased at a faster pace than revenues at 51 percent for the quarter, to $133 million and 46 percent for the six-months with expenses of $306 million. The result is a slight decline in the gross profit margin down three percentage points at 36 percent for the quarter from 39 percent in 2019 and down two percentage points, at 35 percent for the six months.
Gross profit increased by 32 percent for the quarter and 33 percent for the month at $75 million and $166 million, respectively.
Administrative and selling costs increased 44 percent to $37 million for the quarter and 55 percent year-over-year for the six-months to $79 million.
Gross cash inflows pulled in $92 million for the half-year, but after payment of dividend, loans and working capital increase $61 million remained, when added to funds on hand before cash funds ended at $352 million. Net current assets ended the period at $490 million inclusive of receivables of $119 million, down from$133 million at the end of April 2019 but up from the year-end of $84 million and cash and bank balances of $352 million. Current liabilities stand at $111 million for a healthy current ratio of 4.4. At the end of April, shareholders’ equity stood at $424 million with long-term loans and lease payable amounted to $64 million.
Earnings per share came out at 4 cents for the quarter and 9 cents for the six months. IC Insider.com is forecasting 18 cents per share for PE of 14.5 times 2020 earnings and 25 cents for 2021.
The stock traded at $2.46 on the Junior Market of the Jamaica Stock Exchange with a PE ratio of 14 times 2020 earnings.

Limners & Bards revise EPS

Kimala Bennett, Chief Executive Officer of The Lab.

Following IC Insider.com’s report that the earnings per share (EPS) for Limners & Bards were incorrect, the audited accounts of the company are now revised to reflect the EPS the article suggested they should be.
The revised audited reports now state that the calculation of earnings per stock unit is based on the profit after taxation and the weighted average number of stock units in issue during the year. Net profit attributable to shareholders of $94,746,238 in 2019, $62,313,858 in 2018. The weighted average number of ordinary stock units is 803,836,715 in 2019 and 756,552,202 in 2018, resulting in Basic and diluted earnings per stock unit of12 cents in 2019 and 8 cents in 2018.
The original audited financial statements showed the basic and diluted earnings per stock unit at 10 cents for the 2019 fiscal year and 7 cents for 2018 based on the weighted average of ordinary stock units 945,690,252 in each year.
IC Insider’s report on Tuesday stated that “Limners and Bards released full-year results with profit after taxation of $95 million, up by an impressive 52 percent from the $62 million earned in 2018 from healthy gains in revenues, with earnings per share (EPS) works out at 12 cents for 2019 and 8 cents for 2018.”
The company’s operating revenues grew 31 percent to $632 million from $483 million in 2018, with the last quarter growing a stunning 58 percent to $146 million, generating income just below the $152 million generated in the July quarter and profit before tax of $18 million versus $16.5 million in the July quarter. While revenues for the year rose 31 percent, direct cost rose at a slower pace, resulting in the gross profit climbing 39.4 percent over 2018 as gross profit margin rose to 36 percent compared to 33.7 percent in 2018. Administrative cost rose well ahead of revenue growth with a 41 percent increase over 2018, but the full-year increase is below a 70 percent surge in the July quarter while the fourth quarter saw a rise of 39 percent over 2018, is in line with the full-year increase.
In a statement accompanying the nine months results, Chairman, Steven Gooden and Kimala Bennett, Chief Executive Officer stated, “Administration expenses increased by $23.737 million, or 42 percent, which represent 16.63 percent of revenue for the nine months compared to 14.60 percent to the corresponding period ended July 31, 2018. These increases are primarily attributable to staff costs (due to increase work volume), subcontractors (on retainer contracts), depreciation charges and security costs”.
The company reports on three segments comprising Production, Media and Agency. For 2019 Production generated earnings of $226 million and profit of $100 million while Media raked in $292 million but ended with just $40 million in profit and agency the most profitable brought in $114 million and delivered $85 million in net income.
The company ended the year with cash and equivalent of $292 million with shareholders’ equity of $356 million, up from $123 million in 2018. Borrowings stood at $50 million with payables of $83 million and current assets of $387 million.
IC Insider.com forecast earnings per share of 20 cents for 2020 that puts the PE ratio at 15 with the stock closing trading at $3 on Tuesday on the Junior Market of the Jamaica Stock Exchange and is a stock to be watched into 2020.

The Lab, coming to a broker near you

Add your HTML code here...

NCB Capital Markets is readying a number of new public share issues to come to market by the summer this year.
Numbered amongst them are, The Lab that styles itself as a fully integrated 100 percent Jamaican born and bred advertising agency with global reach and an island swagger. “We are a strategic, creative, passionate solutions oriented and no nonsense group with a heavy emphasis on getting stuff done.” Kimala Bennett is the company’s Managing Director. Clients include National Commercial Bank, JPS, Wendy’s, Dominos, Supreme Ventures, Wray and Nephew, Grace Kennedy, Caribbean Broiler and Digicel. Persons in the know say this is one of those IPOs to plan for, it unique and profitable. QWI Investments is another that NCB Capital Markets is readying to take to the Jamaica Stock Exchange main market by early summer.

Kimala Bennett, Managing Director of The Lab.

Another that will be coming to market is Sagicor Select Funds Limited an Exchange Traded Fund. According to a note in the Sagicor Group audited financial statements, “It is the intention of the company to apply to the Board of the Jamaica Stock Exchange for admission of the shares to trading on the main market if subscriptions of at least $5 billion are raised.”
The above will come on top of the current public offer of Wigton Windfarm that opens next week to raise $5.5 billion, earmarked to be paid over to the government after expenses associated with the offer.