William Mahfood

Profit climbs 24% in Q2 at Wisynco

February 6, 2022 by IC Insider.com

Revenues at Wisynco Group jumped 19 percent for the quarter to December to $9.5 billion above the $8 billion for the similar quarter of the previous year while for the half year revenues were up 17 percent to $18.7 billion from $16 billion in 2020.

Wisynco traded at $20 on Friday after the posting of results.

“We have seen a continued recovery in our Revenues with all Channels increasing at vibrant levels. Exports as well for the quarter were up 103 percent over the same quarter of the prior year. Our increased efforts and focus have resulted in improved results in this area and we have noticed wider consumer acceptance for our products in these important export markets.” William Mahfood, Chairman and Andrew Mahfood, Chief Executive Officer stated in their joint report to shareholders. “Exports have moved from 3 percent of overall sales to 5 percent,” the chairman informed ICInsider.com.
Gross Profit climbed 24.3 percent for the quarter to $3.3 billion from $2.7 billion in the same quarter of the previous year while it grew 18.6 percent from $5.6 billion to $6.6 billion. Improvement in gross margin from 33.3 percent for the 2020 December quarter to 34.8 percent helped to swell the gross profit and helped to drive net profit for the quarter as well as a smaller rise in margins from 34.6 percent to 35.2 percent contributed to improved numbers for the half year and bodes well for the second half. Selling, Distribution expenses grew at a slower pace than sales revenues at 17.6 percent to $1.74 billion for the quarter and 11.4 percent for the six months to $3.39 billion from $3 billion in 2020. Administrative expenses for the quarter rose by 6 percent to $357 million from $337 million in 2020 and for the year to date, they rose 6.4 percent from $691 million to $735 million in the prior year.

Wata is one of Wisynco best-known brands

Profit before Taxation surged 84.6 percent for the quarter to $1.5 billion, over the $836 million in the comparative quarter for the prior year and includes an exchange gain of $280 million compared to an exchange loss of $26 million for the 2020 quarter. Profit before taxation for the half year jumped 51.6 percent to $2.8 billion compared to $1.9 billion in the prior year.
After provision for taxes, Wisynco recorded net profits attributable to stockholders of $1.2 billion, or 31c per share for the quarter, 74 percent greater than the $688 million earned for the prior year and the six months net profit rose from $1.54 billion to $2.13 billion, with 57 cents in earnings per share.
Cash inflows from operations were $2.9 billion, up from $2.45 billion in 2020.
Shareholders’ Equity stood at $17 billion, with borrowings at $1.9 billion. Current Assets ended the quarter at $16 billion up from $13 billion the previous year and Current Liabilities stood at $5.6 billion compared to $4.6 billion at the end of 2020. Cash funds and short term investments ended the period at $9.6 billion up from $6.9 billion in 2020, Mahfood points to this amount and suggests that it is not contributing much to profits. The conclusion is that the company will be on the watch for viable acquisitions to provide a better rate of return.

True Juice orange juice bottled and distributed by Wisynco.

The board declared an interim dividend of 20c per share, up from the 10 cents per share interim dividend declared in January 2021. The dividend will be paid on March 1, to shareholders on record on February 15. The stock trades ex-dividend February 14, 2022.
“We started to see a better turnaround in the operations from the middle of last year,” William Mahfood advised ICInsider.com. He felt that improved service to customers and increased attention paid to the cost were contributing factors as well. Mahfood indicated that January was a strong month for the group and hopes that it will carry through for the rest of the quarter. Although only around 10 percent of revenues go directly into the hotel sector, there is evidence of a strong rebound in tourism in the sector that is contributing to the resurgence in sales.
ICInsider.com projection is for earnings of $1.30 for the current year ending in June and $1.75 for the next fiscal year. The stock climbed from $17.75 before the release of the results after the market closed on Thursday to $20 at the close on Friday for a PE ratio of 15 and 11 times next year’s earnings.

Filed Under: General News Tagged With: Andrew Mahfood, Emerging markets, Jamaica Stock Exchange, Jamaican Stock, Trading Activity, William Mahfood, Wisynco Group

Strong rise in Wisynco profit

May 13, 2019 by IC Insider.com

Wisynco Group sent a strong message to investors, why the company’s stock is a must have by posting a strong 38 percent rise in profit for the 2019 March quarter, from revenues that grew 18.7 percent to $6.9 billion.
For the nine months to March, profits grew slower than for the quarter at 32 percent after tax, from revenues that are up 15 percent to $20.8 billion. The second quarter benefitted from the addition of rum and sugar distributions as well as improved efficiency flowing from the new bottling lines installed late in 2018 but suffered from foreign exchange losses of $69 million. Without the currency loss, profit in the quarter would be closer to an increase of 50 percent.
Asked how long the strong growth can continue, Managing director, William Mahfood informed IC Insider.com, “I think it will be for the next couple years, based on the economy as well as our improved efficiencies.”
Profit before Taxation for the quarter increased to $791 million or 35.4 percent compared to $585 million in 2018 for the same quarter. For the quarter ended March 31, 2019, Profits Attributable to shareholders of $694 million or 19 cents per share compared to $504.3 million or 14 cents per share, an improvement of 37.6 percent over the corresponding period of the prior year.

Worthy Park sugar distributed by Wisynco & also Worthy Park Rum.

Gross Profit increased to $2.6 billion or 24.9 percent over the $2.1 billion achieved in the same in 2018 resulting in Gross Margin of 37.8 percent, greater than the 35.9 percent for the corresponding quarter of the previous year. For the half year Gross Profit also increased to $8 billion or 19 percent over the $6.7 billion achieved in the same quarter of the previous year resulting in Gross profit margin of 38.5 percent.
Selling, Distribution & Administrative Expenses for the quarter totaled $1.7 billion or 14.2 percent, more than the $1.5 billion for the corresponding quarter of the prior year. For the half year, cost incurred increased 16 percent to $5.2 billion. The six months increase is just ahead of revenue growth. Finance expenses included a loss of $69 million due to the revaluation of the Jamaican Dollar and pushed the cost in the quarter by 183 percent and 70 percent for the half year to $302 million. The company should benefit from the decline in the value of the local dollar subsequent to the close of the quarter as well as the distribution of JP Snacks’ products.
The group is in a healthy financial position. Current assets stood at $9.2 billion of which cash equivalent stood at $3.3 billion while current liabilities amounts to just $3.9 billion with shareholders’ equity $10.39 billion and borrowings amount to $1.25 billion.
IC insider.com is forecasting earnings of $1 per share for the year ending June and $1.50 for the 2020 fiscal year that starts in July. The stock trades at $14.90 on Friday and is up 36 percent for the year to date and trades at 15 times 2019 earnings and just 10 times 2020.

Filed Under: Company News, Company Results Tagged With: Emerging markets, Jamaica Stock Exchange, William Mahfood, Wisynco Group, Worthy Park Estate

Wisynco expects better Q2

December 2, 2018 by IC Insider.com

Wisynco held its AGM on Tuesday, November 26, at the Sam Mahfood Distribution Centre, Lakes Pen Road, St Catherine. The well attended meeting was updated on the financials for the 2018 fiscal year ending June and the 2018 first quarter by the managing director, Andrew Mahfood.
Mahfood spoke to the major developments during the year and the quarter including the successful IPO last year. Shareholders were informed on the full resumption of the storage facilities at the headquarters, with cold storage being the latest to come on stream. He stated that not much savings was expected in the switch. There will be cost savings in rental and from a more efficient operation with just one location than two.
The company reported sales revenue of $25.54 billion up 14.8 percent from $21.38 billion in 2017 and generated net profit of $3.29 billion compared to $2.45 billion in 2017. Attendees were informed by the managing director that the 2017 net profit included the one off income from the insurance claim amounting to $636 million before tax which relates to the fire that occurred in May 2016.
The installation of two new bottling lines and one new filler Mahfood told shareholders and guests, should result in 40 percent more efficiency, the lines allows for less packaging material being used to produce bottles and will also result in lower transportation costs. The new lines have created capacity to meet increased demand and facilitate increased exports sales. For the first quarter sales revenue grew

Shareholders at Wisynco 2018 AGM.

just over 12 percent to $6.8 billion but should rise faster in the second quarter with new products for distribution and increased production to meet market demand. Profit grew 15.7 percent to $779 million in the September quarter, from $698 million in 2017, with earnings per share for the quarter ending at 21 cents and is projected by IC Insider.com to reach $1.10 for the full year. Gross Profit also increased to $2.6 billion or 10.4 percent over the $2.3 billion achieved in the same quarter of the previous year. Gross Margin of 37.8 percent was slightly lower than the 38.4 percent for the 2017 first quarter due to the commissioning of the new beverage lines and the devaluation of the Jamaican Dollar, management indicated.
Selling, Distribution & Administrative Expenses for the quarter totaled $1.73 billion or 11.4 percent more than the $1.55 billion in 2017.
Both Andrew and William Mahfood seem very optimistic that the second quarter will show improved sales growth over the first quarter. The settling down of the new lines are major factors as well as continued economic growth in the Jamaican economy.
But the operations were not without problems. The operation of the new equipment took time to settle and this resulted in dislocation in supplying the marketplace with adequate supplies, which held back sales in the first quarter. That problem seems to have been resolved as sales have improved, the two Mahfood brothers told IC Insider and this will show up in increased sales in the second quarter and beyond. Distribution of the Rum Bar brand of spirits produced by Worthy Park Estates commenced in November. Sales from this is expected to reach $500 to $600 million per year, while the distribution of sugar will commence in 2019.

Filed Under: Company News, Company Results Tagged With: Andrew Mahfood, Emerging markets, Jamaica Stock Exchange, Jamaican Stock, William Mahfood, Wisynco Group

Wisynco adds $2.5B in sugar & rum sales

September 22, 2018 by IC Insider.com

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Wisynco brand Wata to benefit from 3 new production that is now in operation.

Wisynco Group, is set to lose revenues and profit with the ban on single use plastic straws and Styrofoam but the contract to distribute sugar and rum manufactured by Worthy Park should add $2.5 billion to revenues.
The sugar and rum revenues will more than make up for the cut in revenues of approximately $1 billion per year and profits by an insignificant $70 million information released by the company to Jamaica Stock Exchange suggests.
Investors in the company’s stock could not get enough after it listed in December last year, driving it to a high of $13.81 for a then rich PE of more than 20. With the PE below 10 times the current year’s earnings and set to go to 20 by 2019, investors are dumping the stock at a PE of 8. But now they should be holding and buying more, as the stock has few that are likely to deliver better returns in the next twelve months.
According to the company, plastic straws represent less than 0.1 percent of the Company’s revenue and Styrofoam represents 4 percent of the company’s revenue and approximately 3 percent of the company’s net income. Investors seem to be concerned about the impact of the ban on the company’s operations and profit. With earnings of 62 cents for the 2018 fiscal year and 15 cents in the June quarter, investors may not be seeing a boost in profit to come to warrant holding the stock.

Wisynco Group

IC Insider.com spoke with the company’s CEO William Mahfood, advises of a number of positive developments that bode well for the future fortunes of the group. The company on Friday released information on a new distribution agreement with Worthy Park Estate (WPEL) for the distribution of WPEL’s spirits and sugar. Wisynco advised that the distribution of WPEL’s spirits will commence on November 1 and will include the ‘Rum-Bar’ and Worthy Park Estate brands of spirits. The distribution of WPEL’s sugar will commence on January 1, 2019, the start of the new sugar crop.

The new products could add around $750 million to gross profit. According to Mahfood the company has just added three new production lines to alleviate production capacity constraint and is expected to help increase sales around 20 percent. The expanded capacity will facilitate expanded production of Wata, carbonated products and juices. “New process has cut the production cost of plastics by more than 50 percent and this will result in significant cost savings,” Mahfood said. Importantly, Mahfood expects revenues from existing product lines to be up 20 percent for the fiscal year. Add to that, revenues from the new contract resulting in revenues probably increasing 30 percent in the period ahead.
IC Insider.com projects profit of approximately $4 billion or earnings per share of $1.10 and that should push the stock to $20 in 2019. IC Insider.com is placing the BUY RATED stamp on the stock.

Filed Under: Buy Rated, Company News, General Business News Tagged With: Jamaica Stock Exchange, Wata, William Mahfood, Worthy Park Estate

Wisynco Group IPO is imminent

November 2, 2017 by IC Insider.com

NCB Capital Markets Manager, Origination and Structuring Stanley Thompson (left) exchanges laughs with Wisynco Group Chairman William Mahfood during a signing of the IPO agreement. Sharing in the moment, too, are Wisynco Chief Executive Officer Andrew Mahfood and PriceWaterhouseCoopers Director Fiona Hyman

Wisynco Group today announced its intention to offer shares in the company by way of an initial public offering (IPO), confirming IC Insider.com report yesterday.
Information gleaned is that the draft prospectus is being vetted by the Jamaica Stock Exchange, the Financial Securities Commission and the Company Office of Jamaica with the IPO expected to come to market before the end of this year and could happen in November.
Founded in 1965 by the Mahfood family, West Indies Synthetic Company (WISYNCO) began manufacturing ‘Iron Man’ water boots from a 6,000 square foot factory in Twickenham Park, St. Catherine. The company now ”owns and manufactures a portfolio of category-leading beverage brands such as WATA and its extension of cranberry flavoured-WATA, BOOM Energy Drink and BIGGA Soft Drink. In addition to its owned brands, Wisynco is the exclusive local bottler for the Coca-Cola Company, as well as third-party beverage brands such as SqueezZ and Hawaiian Punch also distributing for global giants such as Red Bull, Tru Juice, Freshhh, Kellogg’s, General Mills, Nestlé and others.
A rapidly-growing company, Wisynco has increased sales significantly in recent years moving from JMD 12.6 billion in 2013 to $21.2 billion in 2017. Over the last five years the company’s year-to-year sales growth has ranged between 9 – 21% with a compound annual growth Rate (CAGR) of 11.06% over the same period. The business has a strong gross profit margins, averaging approximately 36% since 2012.
Wisynco’s revenues are just under the $22.8 billion generated by Lasco Manufacturing and Distributor combined. With the above profit margin, gross profit would be $7.5 billion. The two Lasco companies have administrative, selling and distribution cost of $4 billion to March this year. IC Insider.com puts the cost for Wisynco at $4.5 billion per annum which would result in a pretax profit in the order of $3 million and after tax around $2.5 billion. If the company came to market around the mid-range of PE of 12, this would value it at $30 billion. An issue of 20 percent in the IPO, would target inflows be around $6 billion, but IC Insider.com gathers that a vastly smaller sum is being targeted to be raised by the company but some existing shareholders may seek to divest some of their shares.
According to William Mahfood, Chairman of the Wisynco Group, “the IPO will allow us to share the growth and

Wata produced by Wisynco

success of our business with a wide cross section of our customers and employees, especially following on the outpouring of wishes and support after the fire last year”
With over 350,000 square feet of warehouse, 110,000 square feet of factory space the company has over 700 sales-related full time employees.
We are a proud Jamaican company with a deeply rooted commitment to the country’s development.” Mahfood said. “Our stated mission is to improve the lives of our people which extends to all stakeholders –team members, customers, partners and now with the planned IPO to fellow Jamaicans alike,” Mahfood said.
NCB Capital Markets has been engaged as arranger and broker for the transaction with PricewaterhouseCoopers acting as financial advisors to the company.