Profit after tax for the nine months to December last year fell 10.7 percent to $68 million at Medical Disposables, compared with $76 million in 2021. For the quarter, it rose from $37 million to $38. Profit after tax attributable to the company’s shareholders ended 2022 with $58 million, down 10.7 percent from $65 million in the previous year. For the quarter, it climbed 40 percent to $28 million after minority interest compared with $20 million in 2021.
Improved profit margins played a pivotal role in the company’s fortunes in the December quarter, with gross profit margin increasing from 26.8 percent in 2021 to 29 percent in 2022, helping to propel it to the most profitable quarter for the nine months of operations in 2022. Gross Profit margin for the nine months in 2022 increased to 27.26 percent from 25.85 percent in 2021.
Gross profit hit $273 million from sales of $941 million, up from $250 million from sales of $930 million in the second quarter to June. Gross profit for the December quarter improved by 16.6 percent or $39 million compared to the 2021 third quarter.
Sales for the third quarter grew by $66 million or 7.5 percent over the third quarter in 2021, moving from $875 million in the 2021 December quarter, driven by increased demand for pharmaceutical and consumer items, the report stated.
Sales increased by 10.8 percent or $270 million for the nine months to December 2022, to $2.76 billion from $2.49 billion in 2021 and delivered a 16.9 percent improvement in gross profit of $108 million to $753 million from $645 million in 2021.
Selling and administrative cost dipped in the December quarter, compared with the September quarter, to $78 million versus $83 million, while selling and distribution cost rose just $2 million to $114 million. Finance cost spoiled the party, jumping to $31 million from $28.5 million and “was due mainly to an overall upward adjustment in financing, particularly working capital. The increased usage of the working capital lines of credit was deemed necessary to hold greater levels of inventory in an effort to mitigate against any additional supply chain risks that could lead to further out-of-stock instances,” management stated in their report accompanying the Financials.

Medical Disposables traded at a new all-time high of $10.
“Out of stock issues continue to affect the Group’s profitability as suppliers are faced with global supply chain challenges within their operations. The availability of key speciality products such as vaccines and oncology medicines has become infrequent and inconsistent. Our internal estimates have tracked over $100 million in lost sales due to the shortages,” the company stated. That would translate to close to $30 million more in pretax profit.
The operations generated cash inflows of $109 million for the nine months, but working capital needs consumed it all as inventory rose sharply.
At the end of December, inventories increased by $360 million to $1.53 billion, up from $1.17 billion in December 2021. Receivables declined to $603 million at the end of December 2022 from $708 million at the end of 2021. Cash and bank balances rose to $128 from $72 million at the end of 2021. Loans due to lenders amount to $1.14 billion, up from $965 million at the end of 2021 and is just a bit less than shareholders’ equity, that stood at $1.17 billion compared with $1.07 billion at the end of 2021.
The profit for the nine months resulted in earnings per share of 11 cents for the quarter and 22 cents for the nine months.
The company’s focus is on organic growth and expansion from acquisitions where possible, in furtherance of this goal, management is placing a great deal of emphasis on staff retention and recruiting talented personnel to enhance its pool of above average talents. The initial impact will be increased staff costs that will be above the increased revenues, but that will pay good dividends in future years.
ICInsider.com projects earnings of 45 cents for the year and $1 for the fiscal year ending March 2024. At the last traded price of $4.85, the stock trades at 11 times this year’s earnings and five times that of 2024, suggesting much upside potential for the stock price, with the market average PE ratio now around 13 and with several priced above 15 times earnings.
Selection of stocks is not isolated from the environment in which the companies operate. Accordingly, investors need to take developments in the wider economy and in certain sectors that can impact profit.
growth in the wider economy. The company reported a big jump in profit for the first quarter to November, from an increase in revenues and improved profit margin. The earnings projected is that for the fiscal year that ends in June 2020, when they would have implemented price adjustments to recover the fall in profit margin. IC Insider.com sees management as a weak area of its operation. Hopefully, changes in the composition of the board will address this frontally. Since the start of the year the price has moved up to $2.70 in response to the strong gains in the first quarter profit.Caribbean Cream – PE 9. The company enjoyed increased sales for the nine months to November last year but with flat sales in the second quarter and pick up in the third quarter. Importantly, the raw material prices for a number of production items fell sharply on the world market and will lower cost for them. The latest is the fall in the price of crude oil that will result in cheaper electricity cost as well and as JPS switches to lower electricity production the savings should gather steam during the year. The combination of lower input cost and increased sales will make the stock a winner in the current year. An investment in the stock around the $5.50 level that it is trading at may not pay off until the second half on 2019 when higher profit is expected.
Caribbean Producers – PE 6. The company has more going for it that it has so far
make it a good investment for long term investors if bough in the $3 region. The company will be opening their newest branch in Kingston by the second half of 2019. That will result in increased revenues and profit for the 2020 fiscal year that ends in June. They also have plans for the opening of 3 more stores in the island, when completed they will result in above average growth in revenues and profit.

The average PE ratio of both markets are currently at an average of 12, based on this year’s estimated. At the close of the markets on Thursday, IC Insider.com’s TOP 10 Junior Market stocks continue to trade at an average discount of just under 40 percent to the Junior Market average, those in the main market are trading just below 50 percent discount, leaving several stocks with good room for growth for the rest of the year.
Caribbean Cement continues to trade with a heavy downside bias notwithstanding the rise in price for the week to $32, with last year’s first quarter results dated April 20, this year’s results could be out in the coming week and provide direction for the stock. 
Blue Power was eased out of the Top list for Juniors with Lasco Financial moving in to occupy the tenth spot, this past week. Access Finance that ended the previous week with the bid at $39, traded to end the past week at $34.25 to be back in the list.
In the Main market, Barita Investments has limited buying interest at the current price with just 100 units on the bid at $6.86 and just 9,200 units on the offer at $7.70, this represents quite some change form the week past when the offers were at $7, which were taken out by buyers.
After dropping out of the TOP 10 for the last week Lasco Distributors returned during the end of past week while Lasco Financial Services that entered the list for the start of the past week has been squeezed out with prices declining elsewhere and Access Finance ending the week with the bid of 1,500 shares at $39, to be out of the top listing and Blue Power closing the week at $35 is back in the list. Overall bid volumes for junior and main market stocks remain low with the only ones of the Top 10 with decent volumes on the bid for junior stocks being Caribbean Producers with 60,712 units on the bid at $3.75, General Accident with 53,426 units at $3 and Medical Disposables with 103,417 units with the bid price ending at $6. Offers that are well about the bid volumes include AMG Packaging with an offer to sell 99,723 units at $5.95, Jetcon Corporation with 435,207 units at $12.99 and Lasco Distributors with 973,036 units at $6.70.
In the Main market, Barita Investments has limited buying interest at the current price with just 447 units on the bid at $6.85 and 28,224 units on the offer at $7. Berger Paints ended with 237 units on the bid at $12 with 49,894 on offer at $12.01. Carreras currently, has 38,619 shares on offer at $74 and buying of 3,000 shares at $73.95. Caribbean Cement’s weak demand continues in the mid-thirty dollar range, with the stock closing with only 2,340 units on the bid to buy at $31.50 while offers are at $32 to sell 53,579 units. JMMB Group’s buying is at $16.30 for 50,000 units on the bid and only 100 units offered at $18.24, Pulse Investments has offers for 150,000 units at $8 and buying at $7 for 1,005 shares.
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