RJR/Gleaner

RJR profit explodes

July 19, 2021 by IC Insider.com

Revenues at Radio Jamaica fell for the year to March 2021, by 7 percent to $5.2 billion, from $5.6 billion, but there ends the bad news for the group that comprises television, radio and newsprint as their main products. On the revenue front, the good news starts emerging with the final quarter climbing 11.6 percent to $1.4 billion from $1.25 billion in 2020.

Media house, RJR traded most shares on friday

Full year profit surged 351 percent over 2020 to hit $171 million and just 7 cents per share, from $38 million in 2020. The March quarter, which is usually one of the worse for the group, with mostly ends losses, generated $44 million profit after tax.
The profit for the fourth quarter in 2021 compares exceptionally well with a loss of $156 million in the final quarter of 2019 and a loss of $96 million in 2020, March quarter. The sharp turnaround is directly attributed to the cost surgery the group underwent last year.
The year’s performance comes against the backdrop of $366 million in what can be considered one off costs in a year when revenues fell 7 percent, redundancy payment amounting to $183 million and provisions for bad debt $158 million. In addition, included in operating cost is $164 million for web development, an item that appears to be more of a capital nature than an expense, but it has been reported as an expense for some years. Importantly, redundancy costs will not repeat, at least for the same workers but critically, it will result in an annual staff cost savings of a similar amount in the future. For the past year, those workers who were made redundant would have been employed for approximately half the year, so the reduction in wages in 2021 onwards would be around $90 million. In line with the above, salaries and wages fell $365 million to $1.5 billion for the 2021 fiscal year. Some of the reductions relate to a period when staff members were on reduced pay. Inventories expensed to direct production expenses during the year amounted to $213 million, well down on the $393 million for the Group in 2020.
Segment results show television revenues growing 7 percent for the year to $2.36 billion, with the March quarter surging an attractive 23 percent to $626 million. The segment had the worse period in the fiscal year with a 2.7 percent decline in revenues for the June quarter. Operating profit from this segment blasted off from $132 million to $479 million.

RJR shareholders at the 2019 AGM at the Jamaica Pegasus

Radio suffered just a 4 percent reduction in revenues, with most of that coming in the June quarter, with a fall of 20 percent and the segment delivered an operating profit of $95 million for the year from a small loss of $4 million in 2020. For the final quarter, revenues for radio were up one percent over 2020 to $184 million.
The print division took the brunt of the hit to revenues last year, with a fall of 40 percent in the June quarter, 20 percent in the September quarter and 19 percent in the December quarter. Revenues fell 19 percent to $2.3 billion for the year but enjoyed a six percent bounce in the March quarter, putting it ahead of the 2019 revenues, but ended 2021 with an operating loss of $267 million from a small loss of $14 million in 2020. The bulk of the redundancy of 106 workers came from the print division, with a redundancy cost of $157 million. The March quarter results mark a major about turn for that division, with increased revenues, but the segment results show an increased loss in 2021 of $64 million versus $28 million in 2020; this could be due to bad debt provisions that may have been made in the final quarter.
Cash inflows for the quarter were $600 million versus $403 million in 2020, but after working capital changes, inflows slipped to $540 million, after paying $176 million on the acquisition of property and receiving loan proceeds of $132 million resulted in cash on hand growing by $426 million.
The group ended with cash and equivalent of $725 million at the end of March, up from $282 million, while borrowings stood at $528 million, up from $425 million at the end of the 2020 fiscal year. Receivables climbed to $1.2 billion from $1 billion at the end of March 2020, but allowance for impairment grew from $288 million to $395 million.
Current assets stood at $2.1 billion and current liabilities at $1 billion, resulting in net current assets of $1.1 billion. Shareholders’ equity grew to $2.5 billion from $2.3 billion as of March 2020.
ICInsider.com projects a profit of just over $970 million or 40 cents per share for the 2022 fiscal year and 55 cents per share for 2023. The stock last traded at $1.67 on the Main Market of the Jamaica Stock Exchange on Friday and trades at a PE ratio of 4, well below the average of 16 currently for the Main Market. The stock is ICInsider.com BUY RATED.

Filed Under: Company News, Company Results Tagged With: Emerging markets, Emerging Stock, ICBuyrated, Jamaica Stock Exchange, Jamaican stocks, Radio Jamaica, RJR, RJR/Gleaner

RJR Group chops staff

December 21, 2020 by IC Insider.com

“Companies in the RJRGLEANER Communications Group on Friday, December 11, completed a reorganisation exercise primarily driven by the negative impact of the Coronavirus 2019 Disease (COVID-19) and the need for continued changes as the global media and communications industry continues its transformation,” a release from the group states.
“The exercise which was done over several months saw some positions being made redundant, impacting 107 workers, five of them being managers, the release stated.” In May, the Group reported, “due to a significant downturn in revenues in some areas of its business, it had been forced to lay off almost 100 workers for 120 days. While there has been some improvement in the last few months, revenues have still not returned to pre-COVID levels.”
“During the period, the company also reorganised and reoriented several of its business units and approaches, to be more agile, more competitive and more efficient. They complimented changes which see the Radio and Television areas of the Group being managed as a broadcast division, with the print and online units now managed as an integrated print and online division.”
“The Group’s technology activities have also been brought together in a technology division focused on the full digitalization of the Group’s operations and the enabling of a higher level of digital output.”
“This focus has seen investments in new management, customer relationship and production systems that will improve customer tracking and servicing, provide data analytics to aid management decisions, as well as delivering data analytics to clients to assist in decision making.”
“There has also been investment in new data management and publication systems to improve the consumer experience with our electronic publications, whilst increasing revenue-generating opportunities.”
“Tighter planning and elements of publication rationalization along the lines driven by closer data analytics have improved aspects of print and online operations. A new digital marketing and sales unit is developed to accelerate business growth in the Gleaner’s print and online business.”
“The Overseas publications have been revamped with a discontinuation of the weekly printing of newspapers in the United States and Canada, in favor of electronic publications, with special printed and online publications being done around special diaspora events.”

RJR shareholders at the 2019 AGM at the Jamaica Pegasus

“In broadcast, the local programming content strategy which has served Television Jamaica well, prior to and through the pandemic will continue to be built upon as TVJ is poised and ready to take advantage of the imminent announcement of the change from analogue television broadcasting to digital terrestrial television broadcasting in Jamaica.” The switch to digital broadcasts will provide consumers with multiple high quality television services from TVJ and further reduce operating cost.
“The group continued its focus on the diversification pillar of its strategy which has seen a minority stake of 10% taken up in digital marketing player ePost Caribbean Limited at the end of November, and an increase in the group’s equity position in Jamaica Holdings LLC, operator of e-commerce business, Gustazos to 50%, to be effective this month.”
“The Group is confident that with this reorganization and other activities, it is poised for growth and strengthening in 2021 and beyond,” the release from the group concludes.
Bad news oftentimes results in big investment gains down the road. In fact, investors must be seeing this when they drove the stock up from $1.12 at the end of the prior week to $1.28 on Friday, as the week close with limited selling of the stock.
ICInsider.com estimates that the redundancy exercise will save the group between $100-250 million in a full year. In the meantime, revenue in the print division is down sharply from 2019, but the electronic segments are holding their own.
The group reported a profit of $2 million in the June quarter but a loss before tax of $96 million for the halfyear to September. Depreciation in the first quarter of $67 million surged to $210 million in the second quarter, with the charge in the print division jumping from $11 million to $104 million for an increase of $93 million, due no doubt to an acceleration in write off of fixed assets at the newsprint division.
The print division generated revenues of $437 million in the June quarter, down from $722 million in 2019 and incurred a loss of $55 million for the 2020 period. Revenues increased $123 million in the September quarter over the June quarter to reach $560 million, yet was still lower than the $722 million garnered in 2019 September quarter, resulting in a loss of $154 million in the 2020 quarter, due mainly to redundancy and the increase depreciation charges.
To September 2020, the Audio-Visual division saw profit almost doubling from $84 million to $160 million, with revenues up marginally from $1.041 billion to $1.046 billion, while the Audio segment experienced a drop in revenues from $362 million to $325 million resulting in a loss of $11 million in 2019 rising to a $12 million loss.
The group generated positive cash flows from operations even after receivables rose by $116 million and cash on hand ended at $398 million, up from $253 million at the end of September 2019.
While results to march 2021 may well show a loss resulting more from one-off charges than from continuing operating performance.

Filed Under: Buy Rated, Company News, Company Results Tagged With: Emerging markets, Gustazos, Jamaica Stock Exchange, Jamaican stocks, RJR/Gleaner

RJR/Gleaner charting new course

August 29, 2019 by IC Insider.com

RJR/Gleaner launched TVJ International with 24 hours service in the Cayman Islands in August and two other Caribbean Countries are in line with other countries also showing interest in the service.
The launch of a new TV service is just one of a number of changes to the group’s services that the directors updated more than 160 shareholders attending the annual general meeting held at the Jamaica Pegasus Hotel in Kingston today. The vast majority of RJR shareholders in attendance continue to be representative of the older loyal RJR AM listeners.
Some of the several changes that the group is undertaking including merging of certain operations will lead to greater efficiency, reduced rental and personnel cost. Work is being carried out to expand RJR 94 in areas that currently have room for improved coverage that is expected will lead to greater listenership and ultimately increased revenues. A number of transmission sites were merged with existing ones in the past financial year, reducing rental expenses, electricity, repairs and maintenance.
A raft of changes within the group that are underway if successful, will result in major changes to the group and generate increased revenues and profit as well as a number of new revenue-generating services. The effect, the future will look markedly different than the past, with digital technology playing an increasing role in providing services and driving revenues not only locally but globally.
Shareholders were told that the main reasons for the loss of $22 million made for the year to March 2019 were due to losses in staging the FIFA World Cup in 2018 amounting to approximately $40 million and adjustments occasioned by adopting new accounting standards that accounted for $60 million in added cost. The group nevertheless recorded growth in revenues across all segments of the business, with TV revenues climbing 16 percent, audio mainly radio up 4 percent and print 4 percent.

RJR shareholders at the 2019 AGM at the Jamaica Pegasus

All companies within the group will be on one accounting platform that will allow for the completion of financial statements within five days of the month-end. The move will also result in reduced costs in maintaining accounting records.
The group saw a major turnaround in fortunes in the first quarter to June for the 2020 fiscal year, with profit of $24 million up from a loss of $70 million in 2018 although revenues from sales rose modestly to $1.36 billion from $1.35 billion but gross profit jumped to $700 million from $597 million. The improved position in the quarter over 2018 is due primarily, to losses incurred in staging the World Cup matches in 2018 that has no recurred in 2019 and good growth in regular revenues in the 2019 quarter. IC Insider.com forecast is for earnings of 25 cents per share for the current fiscal year and 35 cents for the 2021 fiscal year. RJR’s stock price started the year at 85 cents has gained 129 percent so far and closed trading at $1.95 the Jamaica Stock Exchange on Wednesday with a PE of 8 times current year’s earnings.