It was difficult to understand the factors driving a pile of investors into Salada Foods shares after the stock split at prices as high as $10, even after the second quarter results were posted, showing strong increases for revenues and profits in that quarter.
Alert investors would have found that the big jump in the second quarter’s performance was due to the underperformance in the first quarter. Unfortunately, the company directors did not help investors to understand what was going on. Many investors will learn that when companies’ products are sold through distributors, sales can be jerky for the producers while the distributors can be showing a totally different picture. That seems to be what happened at Salada, where the second quarter sales fill the void left in the December quarter when sales were low.
The latest quarterly report has leveled the playing field and many investors are going to weep for not heeding the suggestion that the stock was highly overvalued.
Sales in the third quarter popped 17 percent to $311 million, from $257 million in 2020. For the nine months to June, sales rose just 9 percent to $890 million from $920 million in 2020.
Profit after tax climbed 53 percent to $51 million for the current year’s June quarter compared to $24 million in 2020 and for the nine months this year, it rose an impressive 225 percent to $115 million from a mere $36 million in 2020.
Gross profit margin rose in the June quarter to 32.97 percent, with the year to date ending at 30.4 percent as gross profit rose 29 percent in the quarter to $102 million from $79 million 17 percent for the year to date, to $271 million from $231 million in 2020.
Coffee plant
Administrative expenses varied marginally than in the prior year, ending at $31.2 million in the quarter from $30.3 million in 2020 and slipping in the nine months to $96.7 million from $897.5 million in 2020. Marketing and sales expenses were effectively flat at $13 5 million versus $13.4 million in the 2020 June quarter and down sharply in the nine months to $36 million from $46.7 million last year. Net finance income saw a positive contribution in the June 2021 quarter of $8.6 million compared to a loss of $3.6 million in 2020 and $15 million in the nine months to June of $15 million from a loss of $12.5 million in 2020. Taxation rose to $16 million in the June 2021 quarter from $6 million last year and $38.5 million in the nine months to June this year from $12.5 million in 2020.
Gross cash flow brought in $174 million, but increased investments and additions to fixed assets and the paying of $108 million in dividends resulted in net outflows of $4 million. At the end of June, Current assets amounted to $964 million, with inventories of $487 million, receivables of $159 million, cash and bank balances of $167 million and investments of $151 million.
Current liabilities ended the period at $256 million. Net current assets closed the period at $707 million while shareholders’ equity stood at $964 million with no long borrowed funds used to finance the operations. In addition to investments in current assets, is $105 million classified under non-current assets.
Earnings per share came out at 5 cents for the quarter and 11 cents for the year to date. IC Insider.com is forecasting 17 cents per share for the fiscal year with a PE of 46 times, current year’s earnings.
The stock traded at $7.79 on the Main Market of the Jamaica Stock Exchange. Net asset value is 93 cents, with the stock selling at 8.6 times book value.
The Jamaica stock market closed on Thursday with the market recovering some of Wednesday’s losses, with the movement not strong enough to wipe those losses even as the market moved well above Wednesday’s close in early morning trading, by the close, declining stocks clobbered advancing more than two to one, with the volume and value of shares traded falling 26 percent and 67 percent respectively compared to Wednesday, on the Jamaica Stock Exchange Main Market. 
Trading averaged 186,829 units at $859,293, compared to 264,717 shares at $2,753,192 on Wednesday. Trading month to date averages 167,373 units at $1,427,454, in contrast to 164,075 units at $1,523,753 on Wednesday. July ended with an average of 322,932 units at $15,201,099.
Mayberry Jamaican Equities gained 25 cents to close at $9.20 after exchanging 2,000 units, MPC Caribbean Clean Energy rose 80 cents to $137.80 in trading 4 stock units, Palace Amusement plunged $105.24 to $1,033.76, with a transfer of 10 shares. PanJam Investment shed 94 cents to end at $63.05 after 7,828 stocks crossed the market, Proven Investments fell 59 cents to $34.41 in exchanging 1,507 stock units, Radio Jamaica gained 15 cents to close at $2.15, with 1,690,453 share changing hands, Sagicor Group spiked $1.04 to $57.90 with 124,380 shares clearing the market and Scotia Group fell $1.40 to $39.80 in trading 2,942 stock units.
At the close, the All Jamaican Composite Index plunged 1,490.87 points to 455,894.84, the Main Index dived 1,960.9 points to 416,088.17 and the JSE Financial Index lost 0.68 points to settle at 101.74.
264,717 units at $2,753,192, up from 108,192 shares at $461,546 on Tuesday. Trading month to date averages 164,075 units at $1,523,753, compared to 144,517 units at $1,284,834 on Tuesday. July ended with an average of 322,932 units at $15,201,099.
Kingston Wharves shed 24 cents to close at $47.76 with an exchange of 6,338 shares, Mayberry Investments spiked $1.50 to end at $7 in exchanging 72,196 units. NCB Financial popped $2.90 to $135.50 with 32,146 stock units changing hands, Palace Amusement dropped $11 to $1,139 with a transfer of two shares. Sagicor Group rallied 81 cents to $56.86 in an exchange of 10,978 stocks, Seprod shed 90 cents to close at $69 with the trading of 8,692 stock units, Supreme Ventures slipped 95 cents to $19, with 81,840 shares clearing the market and Wisynco Group gained 29 cents to close at $15.95 after exchanging 949,997 stock units.
At the close, the All Jamaican Composite Index rose 200.20 points to 457,385.71, the JSE Main Index popped 148.16 points to end at 418,049.14, and the JSE Financial Index shed 0.03 points to 102.42.
Trading averaged 108,192 units at $461,546, compared to 199,394 shares at $1,473,633 on Monday. Trading month to date averages 144,517 units at $1,284,834, in contrast to 153,737 units at $1,493,790 on Monday. July ended with an average of 322,932 units at $15,201,099.
Palace Amusement spiked $116.24 to $1,150 in switching ownership of 2 stock units, Pan Jam Investment rose 95 cents to $64 with an exchange of 700 stocks, Pulse Investments slipped 20 cents to $3.76 in transferring 238,941 shares, Sagicor Group dropped $2.45 to $56.05 with the swapping of 8,209 stock units, Salada Foods fell 25 cents to $7.75 in trading 80,748 shares. Scotia Group advanced $1.90 $41.20 after clearing the market of 4,197 shares, Seprod rose 88 cents to $69.90 in trading 5,876 stock units and Victoria Mutual Investments lost 20 cents to close at $5.80 with 22,233 stocks crossing the market.
The All Jamaican Composite Index dropped 3,947.10 points to 457,185.51, the Main Index dived 3,831.32 points to 417,900.98 and the JSE Financial Index slipped 1.06 points to end at 102.45.
At the close, Berger Paints fell $1.04 to $12.70 after exchanging 200 shares, Eppley spiked 72 cents to $39 in an exchange of 1,254 units, First Rock Capital fell 32 cents to end at $14.05 in exchanging 292 stock units. GraceKennedy popped $6.25 to $104, with 228,414 shares crossing the market, Guardian Holdings shed $10 to $630 with the swapping of 10,588 stocks, Jamaica Producers declined $1 in closing at $22 trading 3,769 stock units. JMMB Group rallied 28 cents to close at $37.78, with 163,033 shares clearing the market, Kingston Wharves lost $1 to end at $48 while exchanging 2,388 units. Mayberry Jamaican Equities dropped 47 cents to $8.50 after trading 8,501 units, NCB Financial Group shed $6.29 to close at $131.21 after an exchange of 82,261 stock units. 138 Student Living rallied 65 cents to $5.10, with 64,807 shares changing hands, Palace Amusement dropped $28.24 to $1033.76, with an exchange of 8 stocks, Pulse Investments rose 21 cents in closing at $3.96 trading 214,612 stock units. Sagicor Group popped 55 cents to $58.50 in exchanging 7,219 shares, Salada Foods gained 20 cents ending at $8, with 5,912 stocks crossing the market. 
Scotia Group fell 20 cents to $39.30 in switching ownership of 202,916 stock units, Seprod dropped 98 cents to $69.02, with 1,945 units crossing the market, Stanley Motta spiked 69 cents to $5.99 after 4,878 stocks crossed the exchange and Sygnus Credit Investments rallied 72 cents to $15, with 73,359 shares changing hands.
Trading averaged 132,356 units at $1,500,551, compared to 137,862 shares at $2,230,311 on Wednesday. Trading month to date averages 138,207 units at $1,500,646, in contrast to 141,133units at $1,500,693 on Wednesday. July ended with an average of 322,932 units at $15,201,099.
NCB Financial shed $1 to $137.50 with an exchange of 34,163 units, Palace Amusement popped $22 to $1,062 after 7 stocks cleared the market, PanJam Investment dipped 95 cents to $63.05 with the swapping of 10,963 stock units. Proven Investments lost 34 cents to settle at $34.95 in switching ownership of 15,264 units, Pulse Investments dipped 26 cents to $3.75 in trading 261,984 stock units, Sagicor Group spiked 95 cents to end at $57.95 after exchanging 224,934 shares. Salada Foods lost 20 cents to close at $7.80 with 9,199 units clearing the market. Scotia Group declined $2.50 to $39.50 in trading 646,232 shares, Seprod fell $1 to $70 after an exchange of 3,401 stock units, Supreme Ventures shed 50 cents in closing at $20 with 76,037 stocks changing hands and Sygnus Credit Investments slipped 52 cents to $14.28 with 75,437 stock units crossing the market.
The All Jamaican Composite Index rose 170.16 points to 461,596.19, the JSE Main Index shed 189.24 points to end at 421,657.62 and the JSE Financial Index dipped 0.18 points to 103.56. 
Investor’s Choice bid-offer indicator reading has ten stocks ending with bids higher than their last selling prices and four with lower offers.
Sygnus Credit Investments popped 58 cents to $14.80 after exchanging 63,362 shares but after trading at a 52 weeks’ intraday low of $13.99 and Wisynco Group lost 22 cents to settle at $15.65 with 362,752 stocks crossing the market.
Investor’s Choice bid-offer indicator reading has ten stocks ending with bids higher than their last selling prices and three with lower offers.
PanJam Investment shed $1 to close at $64 in trading 3,648 stocks, Pulse Investments fell 20 cents to $3.80 with 20,645 shares clearing the market. Sagicor Group shed $2 to settle at $56 with 71,600 stocks changing hands, Scotia Group fell $1 to $41 after crossing the exchange with 9,844 units, Stanley Motta shed 45 cents at $5.30 with a transfer of 38,239 stocks, Supreme Ventures popped 20 cents to $20.20 in trading 27,025 units and Sygnus Credit Investments lost 28 cents to close at $14.22 in switching ownership of 30,162 stocks.
The All Jamaican Composite Index added just 48.11 points to end at 460,076.56, the JSE Main Index shed 405.69 points to finish at 420,886.99 and the JSE Financial Index slipped 0.23 points to 103.72. 
Investor’s Choice bid-offer indicator reading has nine stocks ending with bids higher than their last selling prices and two with lower offers.
Sagicor Group declined $1 to $55 with 57,606 stock units crossing the market, Scotia Group spiked 50 cents to $41.50 with 446 units clearing the market and Supreme Ventures shed 50 cents at $20 in switching ownership of 10,621 stocks.
June ended with an average of 249,610 units at $3,877,606.
NCB Financial Group rose 50 cents to $142 with 8,605 stocks clearing the market, Palace Amusement shed $1 to end at $1,020 in transferring 67 units, Scotia Group popped $2.01 to $41 after 325,790 stock units crossed the exchange and Supreme Ventures advanced $1.25 to $20.50, with 708,931 shares changing hands.