At the close of trading, the Junior Market Index dropped 48.55 points to close at 3,126.33 as the prices of 6 securities advanced, 8 declined and 7 remained unchanged with 21 securities changing hands versus on Friday.
Trading activity on Monday with, resulted in an exchange of 1,181,368 units valued at $5,830,463 compared to 1,983,899 units valued at $10,827,572 on Friday.
Trading ended with an average of 56,256 units for an average of $277,641 in contrast to 132,260 units for an average of $721,838 on Friday. The average volume and value for the month to date amounts to $73,639 units valued at $371,926 and previously 80,157 units valued at $358,761. In contrast, October closed with average of 74,690 units valued at $362,548 for each security traded.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading shows 1 stocks ended with bids higher than their last selling prices and 4 with lower offers.
At the close of the market, CAC 2000 fell 5 cents to $6.90, with 1,000 shares trading, Caribbean Flavours traded 257 shares at $12, Cargo Handlers concluded trading 5 cents higher at $10.85, with 2,000 stock units, Caribbean Producers gained 4 cents to close at $3.79, with 562,000 units, Express Catering declined 6 cents to $4.60, with 13,000 stock units changing hands. Eppley finished with a loss of 10 cents at $11.50, with 203 units, Honey Bun closed at $4.60, with 1,700 shares, Jamaican Teas ended trading at $4.10, with 1,000 units, Jetcon Corporation finished traded 4,718 shares at $4.80. Knutsford Express ended with a loss of 5 cents at $14.75, in exchanging 1,355 shares, KLE Group traded at $2.50, with 100 units, Caribbean Cream finished 49 cents higher at $5.99, with 32,300 shares, Lasco Distributors dropped 73 cents to end at $6.27, with 300,051 shares, as investors continue to respond negatively to initial court ruling on the case against Pfizer. Lasco Financial concluded trading with a loss of 50 cents at $4.50, with 47,434 stock units, Lasco Manufacturing finished trading with a loss of 20 cents at $4.30, with 9,900 units, Medical Disposables concluded trading 17 cents higher at $5.82, with 75,801 shares, Main Event rose by 10 cents to end at $5.60, with 65,139 shares. Paramount Trading closed 59 cents higher at $3.59, with 37,649 units as investors responded to the news of its expansion into the processing of chlorine and bleach. Stationery and Office fell 15 cents to close at $4.85, with 22,436 stock units trading, Sweet River traded at $3.86, with 3,225 units and tTech finished at $7.09, with 100 shares.
Prices of securities trading for the day are those at which the last trade took place
Lasco Manufacturing results disappoint
There was bad news and good news for Lasco Manufacturing shareholders embodied in the September quarterly report that was just released on Friday, after trading.
The good news is that the September quarter’s revenues and profit were greater than that of the first quarter to June, but far worse than for the similar period in 2016. The other good news is that “the outlook for the full year remains positive as the evidence shows that we are heading in the right direction and measures are in place to deliver improved results,” the management reported to shareholders.
When revenues rise in most manufacturing operations there is usual increase efficiency as overhead cost tends to rise more slowly than revenues, thus resulting in an increase in gross profit margin, the reverse is also true. This can be seen from Lasco operations with gross profit margin falling form 34 percent in 2016 to 31 percent in2017. In the quarter, revenues fell 11 percent to $1.986 billion while cost of sales fell only 7 percent to $1.36 billion but Gross profit dropped 12 percent to $524 million by $131 million.
Operating expenses grew $46 million or 15 percent to $361 million and profit after tax fell sharply to $103 million from $363 million in 2016, resulting in earnings per share of just 5 cents, down from 9 cents in 2016. For the six months period, revenues fell by 12 percent to $3.5 billion from $3.95 billion in 2016. Gross profit dropped 17 percent to $1.1 billion from $1.32 million.
Operating expenses grew $85 million or 14.5 percent to $670 million and profit after tax fell sharply to $337 million from $587 million in 2016, resulting in earnings per share of 8 cents. “The increase was primarily due to growth in marketing investments to support our brand in an increasingly competitive environment” management stated.
IC Insider.com projects profit for the year to March 2018 at 18 cents and 30 cents for 2018 of course the out turn is going to be dependent on a lot of what new products can deliver in sales.
At the end of September, Lasco has shareholders’ equity of $4.6 billion with borrowings of $1.58 billion with $265 million to be repaid within twelve months and overdraft of $353 million. Trade receivables stood at $1.76 billion with inventories of $719 million while trade payables is at $1 billion.
The stock traded on Friday at $4.60 at a PE of 25 times 2018 earnings and 16 times 2019.
Wisynco Group IPO is imminent
Wisynco Group today announced its intention to offer shares in the company by way of an initial public offering (IPO), confirming IC Insider.com report yesterday.
Information gleaned is that the draft prospectus is being vetted by the Jamaica Stock Exchange, the Financial Securities Commission and the Company Office of Jamaica with the IPO expected to come to market before the end of this year and could happen in November.
Founded in 1965 by the Mahfood family, West Indies Synthetic Company (WISYNCO) began manufacturing ‘Iron Man’ water boots from a 6,000 square foot factory in Twickenham Park, St. Catherine. The company now ”owns and manufactures a portfolio of category-leading beverage brands such as WATA and its extension of cranberry flavoured-WATA, BOOM Energy Drink and BIGGA Soft Drink. In addition to its owned brands, Wisynco is the exclusive local bottler for the Coca-Cola Company, as well as third-party beverage brands such as SqueezZ and Hawaiian Punch also distributing for global giants such as Red Bull, Tru Juice, Freshhh, Kellogg’s, General Mills, Nestlé and others.
A rapidly-growing company, Wisynco has increased sales significantly in recent years moving from JMD 12.6 billion in 2013 to $21.2 billion in 2017. Over the last five years the company’s year-to-year sales growth has ranged between 9 – 21% with a compound annual growth Rate (CAGR) of 11.06% over the same period. The business has a strong gross profit margins, averaging approximately 36% since 2012.
Wisynco’s revenues are just under the $22.8 billion generated by Lasco Manufacturing and Distributor combined. With the above profit margin, gross profit would be $7.5 billion. The two Lasco companies have administrative, selling and distribution cost of $4 billion to March this year. IC Insider.com puts the cost for Wisynco at $4.5 billion per annum which would result in a pretax profit in the order of $3 million and after tax around $2.5 billion. If the company came to market around the mid-range of PE of 12, this would value it at $30 billion. An issue of 20 percent in the IPO, would target inflows be around $6 billion, but IC Insider.com gathers that a vastly smaller sum is being targeted to be raised by the company but some existing shareholders may seek to divest some of their shares.
According to William Mahfood, Chairman of the Wisynco Group, “the IPO will allow us to share the growth and
success of our business with a wide cross section of our customers and employees, especially following on the outpouring of wishes and support after the fire last year”
With over 350,000 square feet of warehouse, 110,000 square feet of factory space the company has over 700 sales-related full time employees.
We are a proud Jamaican company with a deeply rooted commitment to the country’s development.” Mahfood said. “Our stated mission is to improve the lives of our people which extends to all stakeholders –team members, customers, partners and now with the planned IPO to fellow Jamaicans alike,” Mahfood said.
NCB Capital Markets has been engaged as arranger and broker for the transaction with PricewaterhouseCoopers acting as financial advisors to the company.