4 TTSE stocks rise on Monday
The Composite Index advanced 1.43 points to close at 1,149.45, the All T&T Index gained 2.82 points to close at 1,814.25 and the Cross Listed Index is unchanged at 64.49.
IC bid-offer Indicator| The Investor’s Choice bid-offer indicator ended with 9 stocks with bids higher than their last selling prices and 5 with offers that were lower.
Gains| First Citizens gained 50 cents in trading 3,050 units, to end at a 52 week’s high of $35.50, Guardian Holdings closed with 1,585 shares changing hands and gained 2 cents to end at $15.54. National Flour ended with 1,148 shares changing hands with a rise of 1 cent to close at $2.31 and Trinidad Cement gained 5 cents to end at $3.05 with 2,709 shares changing hands.
Losses| Massy Holdings closed with 275 shares changing hands with the loss of 1 cent at $55.99, Prestige Holdings traded 1,091 shares and fell 10 cents to close at $10.80 and L.J. Williams B share traded 33,700 units but lost 10 cents to end at a 52 weeks’ low of 84 cents.
Firm Trades| Ansa McAl traded 66,323 units valued at value of $4,112,021 to close at $62, Clico Investment Fund advanced by 10 cents to end at $22.65 with 4,000 shares trading, Trinidad and Tobago NGL closed with 9,986 shares changing hands at $23.75.
Another big quarter for Jetcon
The company accounted $4.7 million in tax, in the first quarter but none in the second quarter, with the shares listing on the junior market in March, this year. Earnings per share ended at 12 cents versus 8 cents for the June quarter and 21 cents for the six months to June compared with 12 cents for 2015.
Having been listed on the junior market our profit will be tax free for 5 years. With just half the year completed, profit is 9 percent off from the after-tax profit of $40.3 million reported for the full 2015 financial year and the company seems poised to surpass the 2015 earnings in the September quarter, if recent trend for 2016 to date continues.
Revenues climbed 39 percent for the quarter to $194.9 million and 45 percent for the six months to $342.9 million. Gross profit margin declined to 18.54 percent from 19.24 percent in the quarter and 19 percent for the six months versus 18.38 percent in 2015. Sales are usually greater in the second half of the year than in the first half.
In a release by directors accompanying the financials, the company stated that “Administrative and other costs rose by approximately $5.2 million due to listing on the market which accounted for $2.5 million while salaries adjustments accounted for $2.7 million of the increase. Part of the increase in salaries is directly tied to the increased sales that took place.”
“Sales in June were the highest for the half year with sales for July is ahead of June in volume and sales revenues. Bookings which have been ahead of 2015 for each month this year continues to be positive.”
Inventories stood at $236 million at the end of June, compared to $125 million in June 2015 and $84 million at the end of December last year. Supplies peaked in June and is slated to start to decline by the end July onwards to the end of the year as deliveries to customers exceed new inflows of cars. Payables increased as a result of increased purchase of motor vehicles.
Olympics affects trading on JSE – Monday
Trading levels declined sharply and may well be attributable to the Olympic activities with the volume of each stock traded being unusually low with none trading over 13,000 units up to 10:45 am. Trading picked up subsequently with more securities changing hands with increased volumes. Elsewhere, Access Financial Services Unsecured Variable Rate Note Due 2020 was listed on the Exchange on Monday.
Berger Paints climbed 36 cents to $5.16, Blue Power rose by 50 cents to a new high of $17, Carib Cement fell 45 cents to $27.54, Grace Kennedy fell $1.50 to $45 and Scotia Group jumped $2.10 to $29.20. Lasco Distributors fell 25 cents to $6.75 and Lasco Manufacturing lost 44 cents to $4.51.
The market indices all fell in the main and junior markets, with 11 stocks gaining versus 9 that fell.
At 11:05 am 33 securities traded, resulting in a volume of 1,426,600 shares changing hands. The average number of shares traded amounts to 43,230 units compared to 167,184 units on Friday.
The all Jamaica Composite Index gained 794.76 points to 178,660.46 the Jamaica Stock Exchange Market Index rose 710.66 points to 160,795.99 the Jamaica Stock Exchange combined index fell 73.07 points to close at 171,364.30 points and the junior market index lost 71.36 points to 2,165.11.
Junior market legislation draft ready
Legislation is ready to come to parliament to make the junior market tax incentive retroactive to April 1, this year to restore the incentive to its original benefits of 100 percent tax-free status for 5 years and 50 percent of the regular tax for the second 5 years, Minister of Finance, Audley Shaw recently.
Shaw made the announcement when he delivered the keynote address at the official ground breaking of the Allegheny Petroleum and Paramount Trading joint venture lubricant factory in July to be built at 39 Waltham Park Road in Kingston.
Benefits far out weight the loss in revenues given up by the government, Shaw said. He stated that while corporate taxes were foregone, government saw increased intake from other taxes as a result of the expansion of junior market companies. He indicated that GCT intake grew by 337 percent by junior market companies, with NIS, NHT rising by 100 percent.
“Shaw went on to state that the time for fooling around is long past” we must chart a course to a better future urgently and commended the thrust Prime Minister Holness was pursuing to focussing on growth in an aggressive way. He said that “with 13,000 new hotel rooms to come on stream over the next 5 years that an avenue is being provided for additional goods for the sector to be provided by local goods producers for the sector.”
Shaw commended the joint venture partners and stated that is what he expects to see with a more economically friendly environment that should encourage local production for exports or import substitution.
Expansion for Paramount
Allegheny Petroleum and junior market listed company, Paramount Trading joined forces to establish their jointly owned lubricant plant to be housed at 39 Waltham Park Road the same site as Paramount other operating facility.
The plant for which ground was broken in July, is expected to replace imports amounting to approximately US$4 million now being supplied directly by Allegheny Petroleum, according to Hugh Graham, Managing director of Paramount.
Establishing operations in Jamaica, adds more value and will allow for a greater customer reach and create greater margins than that which applies to imports. The initial investment is US$4 million and includes the warehouse, equipment, software and lab testing equipment. The venture will have the capability to test lubricants in use for customers in Jamaica rather having to send samples overseas for testing. There are plans to expand product range in the future and provide products for exports. The plant is expected to start production in January next, Graham confirmed with IC Insider.
According to Graham in 2012, when they listed on the junior market, Paramount had 36 workers and now has 76 employees and the number will increase to 100 employees, with the latest expansion.
The ground breaking ceremony was addressed by Minister of Finance, Audley Shaw, who indicated that this venture vindicated the decision of the government to provide the tax incentive for the junior market as well as the economic policies being pursued that is geared to encourage more production of goods in Jamaica as opposed to relying on direct imports.
Robin Levy, assistant general manager of the Jamaica Stock Exchange indicated that the company has done well since it has listed and said “since listing in 2012 the company has gone on record higher revenues and tripled profit with the stock price rising from $2.45 to just under $11.” Since the ground breaking, the stock traded at $11.50 and now has a bid at $12.
In the year to May, the company posted an 18.5 percent increase in profit, to reach $173 million, from sales revenues of $1.02 billion with other income accounting for $39 million for the year, up from $869 million versus $16 million in 2015, respectively. Administrative, selling & distribution cost rose sharply by 34 percent to $181 million as the wage bill and rental expenses grew appreciably.
While profit grew in the year, segment results show mix out turn for each division. For 2016, Chemicals grew revenues by 12 percent and gross profit by 19 percent over 2015, for Construction and Adhesives, for the same periods, revenues grew by 59 percent and gross profit by just 6 percent. Manufacturing sales fell by 16 percent with profits remaining unchanged, while Transport enjoyed a 16 percent growth in sales leading to a 61 percent rise in profit and Lubricants sales climbed 403 percent with profits jumping 127 percent. Graham indicated to IC Insider that the fall in manufacturing sales is due to a customer reorganising their business. The data suggests that the new lubricant plant is likely to be the area of growth for Paramount.
In 2015, Graham indicated that a rights issue was likely, asked about that source of funding for the expansion, Graham stated “I can’t talk about that now,” he however, stated that “some other revenue announcement should be made soon.”
Sagicor Group flat Q2 profit
Total Comprehensive Income jumped sharply in the quarter to $5.7 billion from $1.9 billion at June 2015 and for the six months it stood at an impressive $8 billion versus $3 billion in 2015.
Expenses climbed 13 percent to $12.28 billion including administrative cost that rose 16.4 percent to $3.88 billion. Segment results show mixed fortunes, with Individual Lines slipping 9 percent to $800 million, down from $875 million, Employee Benefits jumped sharply by 49 percent to $1.87 billion, while Investment Banking grew by 6 percent, to $850 million. Commercial Banking fell 28 percent or $228 million to $585 million as write down of tax recoverable, took $250 million out of profits, in 2015 the group indicated that results for this segment was boosted by higher than expected recoveries on delinquent loans. Other segment jumped $220 million or 148 percent to $368 million while the company share of Sagicor Real Estate Fund contributed $153 million in the quarter and $329 million for the six months against no earnings in 2015.
Sagicor’s main focus is on the sale of personal insurance related products and banking, its success will be its ability to manage funds it receives and use in investment.
The group reported earnings of $2.51 for 2015 and with the performance this year to June, full year earnings should end up around $2.90, suggesting the stock should rise in the months ahead with the PE ratio at 7 times 2016 earnings versus an average of 9 for the main market. The stock last traded on Friday on the Jamaica Stock Exchange at $21.45.
At the end of June, equity attributable to stockholders climbed to $51.69 billion up from $46.57 billion, while total assets climbed 7.3 percent to $322.4 billion from $300.4 billion at the end of December 2015.
Outlook – “Our Group continued to produce good results in all areas. We are seeing the benefits of our business growth, digital and service-oriented strategies. We expect the second half year to be even better than the first,” Chairman, Danny Williams and CEO, Richard Byles, told shareholders, in the report of directors accompanying the financials.
Sagicor paid an interim dividend of $2.58 billion to stockholders or 66 cents per share, in April this year which is 69 percent higher than the $1.52 billion or 39 cents per share for the similar period in 2015. A second dividend is expected before the end of 2016. An interim dividend of 34 cents per share was paid to shareholders in November 2015.
TTSE trading stays low on Friday
Trading on the Trinidad and Tobago stock market continue to remain low keyed and when it closed on Friday, only 7 securities changed hands resulting in a mere 92,719 shares valued at $2,730,555 being traded as recent buying interest have subsided. At the close, 2 stocks rose, 3 declined and 3 remained unchanged, leading marginal changes in all the market indices. Two stocks closed at 52 weeks’ lows.
The Composite Index lost 2.78 points to close at 1,148.02, the All T&T Index gained 0.01 points to close at 1,811.43 and the Cross Listed Index eased 0.76 at 64.49.
IC bid-offer Indicator| The Investor’s Choice bid-offer indicator ended with 10 stocks with bids higher than their last selling prices and 7 with offers that were lower.
Gains| Clico Investment Fund advanced by 10 cents to end at $22.65 with 28,123 shares valued at $636,986 trading and Guardian Holdings closed with 1,365 shares changing hands and gained 1 cent to end at $15.52.
Losses| National Commercial Bank fell 10 cents in trading 25,000 shares to close at $2.65 and Unilever Caribbean traded 3,705 shares and fell 7 cents to close at a 52 weeks’ low of $64.40.
Firm Trades| First Citizens traded 506 units to end at $35, Trinidad and Tobago NGL closed with 24,810 shares with a value of $589,238 changing hands at $23.75 and West Indian Tobacco traded 9,210 shares carrying a value of $1,163,315 to close $126.31.