Main Event Q1 profit climbs 41%

March 21, 2018 by

Main Event Q1 profit rise 41% to $33m.

The 2017 listed Main Event, enjoyed a bounce of 41 percent in profit for the January 2018 quarter, to $33 million from $23 million in 2017, from sale revenues that rose just 8.6 percent, to $361 million from $333 million in 2016.
Much of the success for the period arose from an improvement in profit margin that rose to 44 percent from 40 percent in the 2017, as input cost remained flat at $201 million. Operating profit rose 22 percent in the quarter to $161 million from $132 million.
Depreciation climbed 40 percent to $21 million, Marketing and sales expenses increased by 132 percent to just $7.8 million, Administrative expenses moved up by 13 percent to $97 million, from $86 million in 2017. Finance cost declined in the quarter, to $3.4 million from $4 million in 2017.
Earnings per share came out at 11 cents for the quarter up from 10 cents in January 2017.
While revenues and profit grew in the quarter, not all areas performed as well. According to the Directors’ report accompanying the quarterly, revenues “was driven by expansion in our core business of entertainment and promotions, with increased opportunities coming from our major clients and increased revenue opportunities from our growing rental and décor equipment base. Revenues from audio, multimedia and digital signage were average.”
Gross cash flow brought in $53 million but growth in receivables, inventories, addition to fixed assets offset by net loan inflows resulted in net outflows of $38 million leaving cash funds at $23 million for the quarter.
At the end of December, shareholders’ equity stands at $479 million with borrowings at just $147 million. Net current assets ended the period $115 million well over Payables of $93 million.
The stock traded at $5.81 on the Junior Market of the Jamaica Stock Exchange with a PE ratio of 10.6 times 2018 earnings with room for the price to grow.

Filed Under: Company News, Company Results Tagged With: , , , , ,

Barita is back VM Investments out – TOP 10

January 7, 2018 by

There is only one change to the TOP 10 lists, since we last reported on it, with Victoria Mutual Investments rising to more than $4 from the IPO price of $2.45, after listing in December and is replaced by Barita Investments.
Junior market stocks show some noted position change due to price movements. Key Insurance slipped in price to move atop that list, while Jamaican Teas gained and moved into the second half of the listing. CAC2000 posted results that were just 2 cents lower than IC Insider.com’s forecast of 80 cents, with the price climbing to $7.31 at close of the week and should really be going higher based on those numbers. Access Financial climbed back to $42, pushing it to the bottom of the list.
Former TOP 10 listing, Main Event reported a 79 percent jump in earnings for 2018, to 38 cents per share before taxation, the price may bounce about for a while around the $6, until it is clear that 2018 earnings should hit 55 cents per share.
With the Initial Public offerings (IPOS) out of the way, more life returned to the secondary market this past week with the main market enjoying buoyant volumes and the Junior Market recording some recovery with more buying interest.
At the close of Friday, the average PE ratio for Junior Market Top stocks ended at 8.6 and 8.4 for the main market TOP 10. The average PE for the overall main market is 15 and 13.6 for the Junior Market, based on 2017 estimated earnings.
IC Insider.com’s TOP 10 stocks now trade at an average discount of 37 percent to the average of the market for Junior Market Top stocks and 44 percent for the main market.
Market Watch| Investors should still keep a keen eye on Caribbean Cement for which supply seems to be declining and word that the company is close to an agreement in refinancing the leased assets that is expected to result in major savings in cost for 2018 onwards. FosRich and GWest Corporation, pulled back from their highs this past week with FosRich hitting $2.50 in trading on Friday, this one could see some rebounding but GWest Corporation could decline some more. Others to be watched are, CAC2000, General Accident, Cable & Wireless, NCB Financial, Berger Paints, JMMB Group, Main Event, Lasco Financial, Paramount Trading and Stationery and Office. Wisynco pulled back this past week to $10.80 and may well trade around this level for a while with a PE of 15 times 2018 earnings, as profit taking continues.

Filed Under: Buy Rated, Stock Market, Stocks to watch Tagged With: , , , , , , , , , , , , , , , , , , , , ,

Profit surge 79% at Main Event

January 4, 2018 by

Main Event was the 4th best performing Junior Market stock for 2017.

A 15.6 percent decline in revenues in Main Event’s October quarter, pulled a 10 percent increase in the year to July, down to just 3.9 percent for fiscal year, but that was enough to spark a big jump in profit for the year.
The improvement in the topline, was sufficient to deliver a strong 79 percent increase in profit for the year, to reach $101 million after tax, up from $56.5 million, as the company made profit in the last half compared to a loss in 2016. For the final quarter, in spite of the reduction in revenues to $234 million versus $277 million in 2016, a small profit of $7 million was achieved versus a break even position in 2016.
Cash flow from operation provided $188 million up from $118 million in 2016, but the company purchased fixed assets of $137 million and reduced net liabilities having received proceeds from the issue of shares amounting to $103 million.
Importantly, direct cost fell by $94 million for the year compared to 2016, but administrative and depreciation cost rose by the same amount. With the rise in revenues, gross profit margin improved leading to a strong increase profit for the year. Some of the improved gross profit seemed to have been achieved by cost ending in administrative and depreciation expenses.
The company’s working capital has improved over 2016 with current assets at $292 million compared to current liabilities of $184 million, in 2016 it was $186 million to $212 million. Equity capital is up to $446 million from $242 million in 2016 while borrowings are down to $170 million versus $204 million, with cash funds of $91 million.
Earnings per share adjusted for tax is 38 cents and IC Insider.com projects 55 cents for 2018.
The stock traded at $5.80 on the Junior Market of the Jamaica Stock Exchange at the close on Thursday for a PE ratio of 11.
The nature of the business exposes it to possible swings in revenues some of it being weather related and others based on the timing of major entertainment events. The effect of such movements suggest that investors may be best rewarded based on a longer term investment posture to benefit from positive surprises in increased business.

Filed Under: Company News, Company Results Tagged With: , , , ,

Public gets measly share of Main Event

January 29, 2017 by

Main Event Entertainment Group had a successful initial public offer, closing on the same day it opened but with a massive over subscription.
What is clearly a successful offer may become a major public relation nightmare as investors may be furious with the paltry amounts they end up getting and hardly being able to benefit from what will be a huge upside move in the stock price shortly after listing.
According to the broker for the issue, Mayberry Investments, stated that Mayberry West Indies Reserved Shares and Key Partner Reserved Applications were allocated in full. The first 3,000 shares of Mayberry Client Reserved Shares were allocated in full, with the balance allocated approximately 4.6095917%. Company Reserved Applications will get the first 3,000 shares with amounts over this level, to be allocated approximately 48.7418953% and general public will get the first 3,000 shares applied for plus approximately 1.1906517% of the rest.
Gary Peart of Mayberry Investments indicated than more than 1,000 applications were received for the 62 million shares that were offered.

Filed Under: Initial Public Offers Tagged With: , , , , ,

Huge interest in Main Event

January 26, 2017 by

The Jamaica Stock Exchange latest potential listing on junior market, Main Event, pulled in just over 1,000 applications worth $670 million dollars, being 458 percent over subscribed.
The offering which closed on the same day it opened Tuesday January 24, is one with the largest number of applicant and is in line with Caribbean Producers and General Accident both with more than 1,100 applications.
According to Gary Peart, Chief Executive officer of Mayberry Investments, the broker for the deal there were several small applications. The level of over subscription is far worse than meets the eye with 22 million shares available to the wider public, to be split up amongst approximately 900 applicants. That works out at around 25,000 shares for each applicant.
The interest in the shares and the low level of shares that will be allocated to each applicant is going to have an electric impact on the post listing pricing by the market.

Filed Under: Buy Rated, Initial Public Offers Tagged With: , , ,

Main Event a buy – by David Stephens

January 18, 2017 by

Staff members of Main Event

Main Event Entertainment IPO prospectus is now out, after cutting through the hype and clutter, an assessment of the company as an investment looks positive, with the stock being recommended as a buy.
The outlook for the media and entertainment industry is positive. The industry can be consider cyclical, which will benefit from overall economic growth. As companies expand operations and try to improve their client relationships, an effective media and events partner is valuable in maintaining overall brand reputation, consumer awareness and loyalty.
The industry is poised for growth as new marketing and entertainment trends emerge focusing on “experiential marketing” rather than traditional methods. In addition Jamaica is well poised to become the commercial capital of the Caribbean and this would lead to more corporate events, conferences, concerts and more, which is a direct benefit to the media and entertainment industry.
Products|The Company provides a diverse range of marketing, events and entertainment related services including equipment rental, graphic design, online marketing, project marketing and sound and video production.
The group is well established as a leader in their industry, with only 3 major competitors and a larger number of smaller players. They list their competitive advantage as being a full service company providing turnkey solutions. MEEG is involved in a number of signature events which occur annually. This provides a good source or repeat business from existing clients and a basis for new business for some of these clients.

Three directors of Main Event

MEEG has built up a good reputation in the industry, and brings a wealth of knowledge to clients. They appear well rounded and versatile in their offerings. They also own a fairly large stock of equipment which positions them to react quickly to customer demands. The company operates in a number of Caribbean territories which could present further growth opportunities regionally.
Risks/Concerns|Some risks to MEEG include:
1. Equipment becoming rapidly outdated with the emergence of new technology.
2. It is expected that this could be a very capital intensive business. Their decision to own equipment rather than lease could also be one that hurts them in the long run.
3. A lot of their revenues appear to be derived from a few major clients. This could prove detrimental should they lose one or more of these customers or their profits could be eroded due to increased competition.
4. Intercompany contracts surrounding sourcing of equipment etcetera, is of concern but this may have been done for greater tax efficiency purposes.
Financial Highlights|The company appears to be running short on cash with the proceeds of IPO helping to alleviate the pressure. Net earnings should increase once finance costs are reduced.
At current valuation, the company is trading at just over 2 times book value (inclusive of the cash raised from the IPO)
At the offer price, the company is trading at 10 times last year’s earnings, based on the new number of shares assuming no new income from the capital to be raised. The estimated 2016 earnings is put at $0.23 and estimated 2017 earnings at $0.33 (earnings could be closer to $0.40 per share if debt is reduced and gross profits improved.)
Based on these projections, the stock price using a market PE of 15 could reach a price of about $5 in the next 12 months.
David Stephens is an individual investor in local and international stocks.

Filed Under: Initial Public Offers, Stock Market Tagged With:

Main Event IPO within 2 weeks

December 16, 2016 by

Main Ev SignWith revenues posited to be in the range of $1 billion to $1.5 billion for 2015, Main Event Entertainment should be coming to the public within two weeks subject to Financial Securities Commission effectively signing off on the prospectus.
The company is expected to raise between $100 million to $200 million at a price between $1.50 and $3.50, stockbroker for the deal, Gary Peart of Mayberry Investments told investors at a briefing today. IC Insider gathers that the amount to be raised, is likely to be $150 million, putting the PE ratio in the 10-12 range.
According to Peart, the valuation for the company is in the range of $500 million – $700 million. Between 20 to 40 percent of the shares will be offered in the IPO. Proceeds of the issue will be used to expand services particularly to Montego Bay where Solomon Sharp, Chief Executive says has a big market for his products and services. Funds will also be put into new equipment to meet increasing demand. According to Sharp, demand is such that they have had to turn away business. The additional equipment will allow for more business to be undertaken simultaneously.
Main Event Entertainment Group, a unique company that is in the business of management of event as well as producing their own production. The company provides event management, production, audio, video, lighting, staging, roofing, power supply, digital signage and management, concept development, creative development, infrastructural build-outs.

Three of the company's directors

Three of the company’s directors

The company generates revenues from Digital boards spread across 22 countries in the Caribbean some a few Central American countries mostly for screens in Digicel stores with more than 100 screens for which they generate up US$225 for month for maintaining and updating them. They also supply and service menu boards for other entities with the latest to sign on being Wendy’s on board, the company provide outdoor signage in the form of advertising billboards.
The principals include Solomon Sharpe, CEO and formerly of Desnoes and Geddes, Richard Bair, Chief Operating Officer, formerly employed at Porter Brothers and Donna Waithe, Director HR and Administration with 23 years of experience in the aviation sector at Air Jamaica. The company was established 2004 and employs between 51 and 200 full time and part time employees.
The Board of directors include Hugh Graham, Solomon Sharpe, Donna Waithe, Richard Bair, Tania Waldron-Gooden, Harriat Maragh, chairman and Dr. Ian Blair.
The company have as its clients many blue chip Jamaican companies, including Scotia Group, National Commercial Bank, Flow, Desnoes and Geddes to name a few.

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Main Event Entertainment set for junior market

December 14, 2016 by

Main EvntIt now appears that the junior market is again open for business, well sort of. Attracted by the tax free status, junior listings received, the planned phasing out of the tax free element, resulted in the last listing taking place in March this year, just days before the tax break for new listings was to have ended.
The new government elected in February, promised full restoration of the tax status. The senate recently passed legislation allowing for special tax regime for junior market listed companies to continue, opening up the market place for unleashing a new wave of listings.
Come Friday, Mayberry Investments officially launches their latest IPO with an Investor briefing for Main Event Entertainment Group, a unique company that is in the business of management. The business is that of event management, production, promotions, and digital signage. More specifically they provide event management, production, audio, video, lighting, staging, roofing, power supply, digital signage and management, concept development, creative development, infrastructural build-outs.
The principals include Solomon Sharpe CEO and formerly of Desnoes and Geddes, Richard Bair, Chief Operating Officer, formerly employed at Porter Brothers and Donna Waithe, Director HR and Administration with 23 years of experience in the aviation sector at Air Jamaica. The company was established 2004 and employs between 51 to 200 full time and part time employees.

Filed Under: Breaking News, Initial Public Offers, Stock Market Tagged With: , , , ,