Regency, Lasco Financial &138SL Stocks to Watch

Regency Petroleum is added to the Stocks to Watch following the release of its prospectus On Thursday with an issue price of $1, with the possibility of the price hitting over $2 initially. Palace Amusement is dropped for the time being with the company reporting improved results in the September quarter but still ending with a loss, but investors should be on the lookout for good things from the stock in the future as it continues to make headway to recovery.
Barita Investments and Consolidated Bakeries are removed from the list at this time with recent results suggesting that they are unlikely to move higher in the short term.
ICInsider.com watch list comprises Access Financial, Caribbean Assurance Brokers, Dolphin Cove, Caribbean Producers, Elite Diagnostic, Everything Fresh, General Accident, Guardian Holdings, Jamaica Broilers, Key Insurance, Knutsford Express, Lasco Distributors, Lasco Financial, Lasco Manufacturing, Medical Disposables, NCB Financial, 138 Student Living, One on One, Paramount Trading, Regency Petroleum, Scotia Group, Stationery and Office Supplies and Wisynco.
Major factors to consider going forward. The rebound in tourist arrivals only came back to 2019 levels since June. Providing there are no reversals, then companies who are highly dependent on the sector will enjoy a big bounce for the next nine months compared to the lower business generated since last year to April this year. The same applies to the entertainment industry as the sector only opened up after March this year. Banks will make a fortune from increased interest rates.

Persons who compiled this report may have an interest in securities commented on.

Lasco Financial & 138SL now Stocks to Watch

Lasco Financial and 138 Student Living are added to the Stocks to Watch list following release results recently showing increasing profits over 2021, both stocks are on the ICInsider.com TOP10 list.
ICInsider.com watch list comprises Access Financial, Barita Investments, Caribbean Assurance Brokers, Consolidated Bakeries, Dolphin Cove, Caribbean Producers, Elite Diagnostic, Everything Fresh, General Accident, Guardian Holdings, Jamaica Broilers, Key Insurance, Knutsford Express, Lasco Distributors, Lasco Manufacturing, Medical Disposables, NCB Financial, One on One, Palace Amusement, Paramount Trading, Scotia Group, Stationery and Office Supplies and Wisynco Group
Major factors to consider going forward. The rebound in tourist arrivals only came to 2019 levels since June. Providing there are no reversals, then companies who are highly dependent on the sector will enjoy a big bounce for the next nine months compared to the lower business generated since last year to April this year. The same applies to the entertainment industry as the sector only opened up after March this year. Banks will make a fortune from increased interest rates.

Persons who compiled this report may have an interest in securities commented on.

Medical Disposables now a Stock to Watch

One on One Education climbed 11.4 percent during the past week to close at $1.66 following addition to the Stocks to Watch list while Knutsford Express climbed back to close at $9.10 from $8 at the end of the previous week and hit a new 52 weeks’ high of $9.75 on Thursday.

Medical Disposables

Medical Disposables dropped out of the ICTOP10 into the Stocks to Watch, but this publication gathers that the half year results due out by next week will continue to reflect increased cost outpacing the rise in sales. ICInsider.com forecast is for increased profits for the year to March 2023 at 75 cents per share which is likely to eventually push the stock price higher and trigger a stock split in 2023.
Buffetted by the closure of the entertainment business in 2020, Palace Amusement had another tough two years, with the 2022 fiscal year ending with a loss of $257 million, down from a loss of $383 in 2021. The improved result was mainly occasioned by a small profit of $12 million in the final quarter as revenues climbed to $275 million in the fourth quarter bettering the $106 million generated in all of the 2021 fiscal year. Revenues in the fourth quarter were well up on the third quarter with $142 million. The much improved June quarter revenue is still some distance from the $338 million generated in the June 2019 quarter, with a profit then of $36 million, but the 2022 results suggest that the company is not far from getting back to normal levels and if so could boost the stock price, currently in the $800 range and by far the highest priced ordinary share on the market currently.
ICInsider.com watch list comprises Access Financial, Barita Investments, Caribbean Assurance Brokers, Consolidated Bakers, Dolphin Cove, Caribbean Producers, Elite Diagnostic, Everything Fresh, General Accident, Guardian Holdings, Jamaica Broilers, Key Insurance, Knutsford Express, Lasco Distributors, Lasco Manufacturing, Medical Disposables, NCB Financial, One on One, Palace Amusement, Paramount Trading, Scotia Group and Stationery and Office Supplies.

Palace Portmore cinema

Based on recent releases of quarterly results Caribbean Assurance Brokers should be releasing nine months’ results this week that should reflect record earnings, which could move the stock price. The same goes for Lasco Distributors and Lasco Manufacturing and Stationery and Office Supplies should report nine months’ results around November 11.
Major factors to consider going forward. The rebound in tourist arrivals only came back to 2019 levels since June. Providing there are no reversals, then companies who are highly dependent on the sector will enjoy a big bounce for the next nine months compared to the lower business generated since last year to April this year. The same applies to the entertainment industry as the sector only opened up after March this year. Banks will make a fortune from increased interest rates.

Persons who compiled this report may have an interest in securities commented on.

Dolla & OneonOne added to Stocks to Watch

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Caribbean Producers gained 11 percent in the past week and slipped to the number 3 spot in ICInsider.com top 10 Buy Rated stocks list. Knutsford Express climbed to a 52 weeks’ high of $9.50 during the week but closed at $8 on Friday and Paramount Trading 10 percent to $2.04.

Caribbean Producers

Dolla Financial and One on One are added to the list this week. Although the nine months’ results for Dolla Financial show only 7 cents per share earnings, ICInsider.com expects the company to post a robust fourth quarter to push earnings to 20 cents per share. There are two points of note about the results. They were constrained by cash to increase loans much beyond what they did, but the $1.5 billion bond raise will alleviate this constraint, the troubling issue is that while Interest Income amounted to $453 million for the nine months, they only collected $367 million, a sharp variation from previous periods when the vast majority was contained within the period.
One on One full year results are due soon and it will be interesting to see if they beat the projections they gave at the time of the initial public offer. Regardless, the price is back at $1.50, in line with the lower end of the range ICInsider.com suggested at the time of the IPO. The company projected revenues to hit $334 million by the end of the financial year to August with pretax profits of $105 million, equating to pretax earnings per share of 7 cents. The earnings work out at a PE ratio of 21, just well above the market average of 12.6, but profits going forward for the new fiscal year could result in a fall in the Ratio.
ICInsider.com watch list comprises now Access Financial, Barita Investments, Caribbean Assurance Brokers, Consolidated Bakers, Dolphin Cove, Caribbean Producers, Elite Diagnostic, Everything Fresh, General Accident, Guardian Holdings, Jamaica Broilers, Key Insurance, Knutsford Express, Lasco Distributors, Lasco Manufacturing, NCB Financial, One on One, Paramount Trading, Scotia Group and Stationery and Office Supplies.
Street News has it that Stationery and Office Supplies continues to churn out record revenues and profits during the third quarter of the year. The company is now subject to taxation at 50 percent of the regular rate for the final five months of the year, having been listed for five years to August, accordingly, ICinsider.com revised the forecast for 2022 to $1.35 from $1.50. The company should report nine months’ results around November 11.
Significant factors to consider going forward. Based on recent releases Caribbean Assurance Brokers should be releasing nine months’ results this coming week to reflect record earnings, which could move the stock price. The same goes for Lasco Distributors and Lasco Manufacturing. The rebound in tourist arrivals only came back to 2019 levels since June. Providing there are no reversals, companies highly dependent on the sector will enjoy a big bounce for the next nine months compared to the lower business generated from last year to April this year. The same applies to the entertainment industry,y as the sector only opened up after March this year. Banks will make a fortune from increased interest rates.

Persons who compiled this report may have an interest in securities commented on.

Everything Fresh jumps 44% last week

Last week’s stock to watch, Everything Fresh, climbed 43.5 percent from $1.17 to close the week at $1.68 and should move higher and Future Energy Source, that reported fabulous results for the first quarter, was one to watch. The stock added to the $5.29 price it closed the previous week at and closed on Friday at $5.63, with a PE ratio of 22.5.

Everything Fresh traded at $1.68 on Friday to gain 43.5% for the week.

This week, Consolidated Bakeries is added to the list, following excellent half year results, with prospects of more gains ahead, but General Accident is out following a bump in claims in the second quarter that squeezed profit. Also added to the list is ONE on ONE Education Services, which should list this month and enjoy a significant price hike.
138 Student Living reported strong June results but hardly moved in a week that the markets suffered declines. Meanwhile, Stationery and Office Supplies pulled back a bit as demand weakened following good half year results.
This week’s other ICInsider.com watch listings are Caribbean Assurance Brokers, Caribbean Producers, Dolphin Cove, Express Catering, Guardian Holdings, Jamaica Broilers, Lasco Distributors, Lasco Manufacturing, NCB Financial and Paramount Trading.
Dolphin Cove, Caribbean Producers, Express Catering and Everything Fresh will be major beneficiaries of the strong rebound in tourist arrivals, now back to 2019 levels.
Refunds should start returning to investors from ONE on ONE Education Services this week now that allocations in the recent IPO are determined. That could make a big difference to the market as investors deploy those funds in the market.

100th listed company for Jamaica Stock Exchange

Jamaica Stock Exchange Junior Market will soon have its 46 listed company on its board soon, and the 100 listed company on the overall exchange, with the latest offering to the public set to open on August 12 and comes to market, solidifying and highlighting the change taking place in Jamaica’s economy where a young team of individuals with a bright idea can raise funds in the market with minimal fixed assets.
OneonOne Educational Services comes to market the prospectus states to sell 380 million shares to raise around $359 million net of cost. In reality, the issue is really for 271 million shares if the lenders convert their loans to shares. Only 121.25 million will be available to the bulk of applicants as the rest is earmarked for selected groups including 108.7 million due to investors currently holding convertible loans as such no new funds will be coming from this group of investors resulting in just $279 million in fresh capital being raised before expenses estimated $30 million. The offer will raise the number of issued capital from 1.52 billion shares to 1.9 billion.
The company has a lot in common with the recent listing of EduFocal both being in the education area using technology to deliver the service to customers thus keeping cost low and profit margins high, but it is more slanted currently in serving the corporate sector. The company that started operating in 2015 is highly profitable and benefitted from the lockdown of the economies in the Caribbean region in the aftermath of the discovery of covid-19 that resulted in schools and many businesses being closed or operating at a lower capacity.
The service is a fully remote educational technology which delivers personalized education primarily to enterprises, governments, and individuals across the Caribbean and Latin American region. The company appears to be a provider of technological infrastructure for itself and clients as opposed to be the primary supplier of learning information, as opposed to what the name suggests. In keeping with the change in service offering, the name seems set to be changed from that of educational services to one that is less restrictive in perception.
The founders have been able to win the support of some heavy hitters within the business community, with Michael G. Bernard, former CEO of Carreras holding the position of Chairman, Douglas Orane as the mentor.

Ricardo Allen CEO of One to One

The Company was founded by Ricardo Allen, Rory White, Stephen Barnes and Christopher Rochester, to deliver large-scale personalized education through the utilization of advances in learning technology which employs sophisticated statistical algorithms, the prospectus states. They were later joined by R. Danvers Williams, Michael Bernard, Douglas Orane, John Bailey, Ian Forbes and the C.B. Facey Foundation and Sagicor Group through the Sagicor Sigma Funds.
As the date of this Prospectus, it is the intention of the Company to use the proceeds to further capitalize on the demand for its services across the region and to deliver on key long-term strategic contracts by continuing to invest in software development to meet the demand for their services.
In the past, the company provided contracts that involved one-time income and recurring annual income that have an average contract length of three years – which continued to generate revenues in 2021 along with a new product “Class-room in a Box” to provide offline content to individuals and schools. As of August 2021, 63 percent of the Company’s revenue was gained through these Business to Business contracts, and 37 percent through the Company’s end user consumers business line.
For the financial year 2020, a net profit of $55.4 million was generated compared to a loss of $9.7 million in 2019. The increase in profits the company states was due to new contracts acquired in response to the COVID-19 pandemic by providing services to the education sectors in Jamaica and other Caribbean territories. For 2021 net profit increased 21.75 percent to $67.5 million over 2020. The Company says it was able to negotiate long-term contracts with clients which provide stability in revenues.
Revenues moved from $27.8 million in 2017 to $269 million in 2021 with the latter rising a significant $104 million over the $128.5 million in 2020. Revenues for 2019 ended at $36 million. For the nine months to May this year, revenues rose 24 percent to $194 million over the similar period in 2021, with a profit of $49 million pretax, up from $15 million in 2021.
The company projects revenues to hit $334 million by the end of the financial year to August with pretax profits of $105 million which would equate to earnings per share of 6.9 cents, with profits being free of taxation when listed on the Junior Market. The company states that the projected fourth quarter revenues of $140 million include existing contracts that are scheduled to produce $101 million in revenues over the 3-month period to August 2022 and an additional $39 million in revenues which are expected from the conversion of deals that are within the sales pipeline, from all indication the company seems on track to achieve this target with the fourth quarter appearing to reflect seasonality in revenues.
The earnings work out at a PE ratio of 14.5 just above the market average of 12.9 Based on where recent IPOs are valued investors can look for a price after listing around $1.50 but investors have priced many of them closer to 30 times 2022 earnings in which case a price of $2 is not out of the reckoning.
A highly welcomed feature of the prospectus is the projected income statement that shows figures for the 2025 fiscal year. Looking further ahead, the Company projects to retain $160 million in current contracts and recurring users, representing 37 percent of 2023 projected revenue, which suggests revenues of $433 million and a profit of $141 million for earnings per share of 7.5 cents with a PE of 14.2. For the fiscal year 2025, revenues are projected to reach $662 million, with a profit of $180 million, but the outcome may be vastly different than forecast. The forecast ICInsider.com gathers may be conservative, with Junior Market IPO candidates in the past enjoying a big jump in business flowing from the publicity associated with the IPO. ICInsider.com expects the IPO will provide a bounce to the company’s business.
Negatives, at the end of May, receivables amounted to $127 million 65 percent of revenues or close to eight months of revenues, which is not good and could lead to a high level of bad debts in the future, there are no comments in the prospectus to explain the high level of debt due, but the audit statements shows very little provision for expected credit loss, suggesting that management and the auditors consider the amounts to be collectable. Information gleaned by this publication suggests that there is an amount of around $60 million of the amount that the payment is differed based on certain conditions being met.
Another negative is amounts due from directors of $22.5 million, which is up from $14.5 million in August 2021 and $8 million in 2020, increased each year since 2017 when it was at $994,627. The audited financial statements state that the amount “is unsecured, interest free and have no fixed repayment terms.” The income tax law will treat these amounts as liable to taxes as they could be regarded as a distribution, there is no indication of arrangements that are in place to have the amount repaid mentioned in the prospectus.
ICInsider.com does not see the reason for the loans being converted to shares being a part of the IPO rather than for the shares being issued prior to the IPO and therefore reflects a more publicly acceptable picture of the wider public getting a higher percent of the issue than how it is currently presented. All of the above presents a picture to the discerning public, a view of a board with the majority being young and inexperienced and a sign of weakness going forward if not addressed early.
The directors of the company are Michael Bernard, chairman, Ricardo Allen, John Bailey holds a University of South Florida MBA degree in Business Administration, Karen Vaz has a BA degree and is vice president of HR and Information Technology at PanJam Group, Andrew Tyrone Wilson has BSC in Banking and Finance, Mischa McLeod-Hines has an MBA degree and is Vice President Capital Markets – Sagicor Investments and Andrew Dr Carol Granston, Instructional Designer and has served in the field of Education and Training for over thirty years.
The listing of the shares will be within a week from the closing of the issue. The broker for the offer is Sagicor Investments.