Profit slips at Honey Bun but watch 2023

A four year run of increased profits ended for the Junior Market listed baking company, Honey Bun, for the 2022 fiscal year to September, as cost pressure negated an impressive 38 percent surge in sales. Still, the revenue growth pales in comparison to a 59 percent jump in raw material cost for the year, amongst other items reflecting major cost movements.
Gross profit margin fell from 48 percent over the last three years to 40 percent, but a combination of price adjustments and reduction in raw material cost should result in an improvement in the 2023 fiscal year. Raw materials accounted for 29 percent of sales in 2021 but surged to 37 percent in the latest year. Administrative expenses jumped 32 percent to $531 million from $402 million in 2021. Staff costs rose 33 percent to $662 million, which increased employment accounted for a portion as the number of employed persons climbed 7 percent from 219 to 235. Selling and distribution costs rose just 17 percent to $408 million from $348 million in the prior year. Depreciation jumped 25 percent to $91 million from $73 million, but finance cost was negligible at just over $3 million.
For the year, revenues rose to $2.95 billion from $2.15 billion in 2021 and delivered a profit of $203 million, down from $219 million after taxation of $51 million and $72 million, respectively and generated earnings per share of 43 cents versus 46 cents in 2021. ICInsider.com forecast is for earnings of $1 per share for the 2023 fiscal year and $1.85 for 2024.
Interest income and reversal of impairment credit losses contributed to $20 million to profits versus $14 million in 2021, while other operating income contributed $2.5 million, down from $4.8 million in 2021.
Cash flows from operations amount to $185 million, down from $304 million in 2021. For the latest fiscal year, $166 million was used to acquire fixed assets and $73 million was used to pay dividends, resulting in $57 million of funds brought forward from 2021 being used to fund the 2022 activities.
The company finances remain healthy, with shareholders’ equity at $1.16 billion while borrowings amount to just $72 million. Current assets ended at $699 million, with cash and equivalent at $347 million and current liabilities at $256 million.
The stock traded on the Junior Market of the Jamaica Stock Exchange at $7.78 at a PE of 7.8 based on the projected 2023 earnings and 18 times 2022 earnings compared with the market average of 12 currently.

Kingston Wharves left for dead

Peculiarities of the local stock market can be seen in many areas with the performance of Kingston Wharves since 2019 highlighting the exuberance of many investors. They pushed the stock up to a high of $78 in 2019 with earnings per share of $1.82 from profits of $2.6 billion, up from a profit of $1.97 million in 2018, with earnings per share of $1.36, but the stock was selling at an enormous price earnings ratio in excess of 43 times 2019 earnings.

Kingston Wharves’ profit rose 8% in Q3.

Investors could not care less about a stock that was excessively overvalued, with the valuation well ahead of the market average at the time, around 22 times at the end of 2019. The company reported a profit of $3.25 billion in 2021 versus $2.28 billion in 2020 for earnings per share of $2.24 up from $1.57 in the previous year. Investors who were paying nearly $80 per share in 2019 are now scared to buy the stock around the $32 level even with improved earnings since 2019.
Admittedly, interest rates on Government of Jamaica Treasury bills at 1.6 percent in December 2019 were very attractive but it was at an unsustainable level and is now just over eight percent. This would result in a reduction in share valuation. But it does not explain why a stock that was priced at twice the rest of the market is no longer having a premium over the market.
For the current year to September, Kingston Wharves reported flat earnings of $2.1 billion compared to the previous year, but the third quarter reflects a 7.7 percent improvement in profits to $837 million in 2022 from $778 million in 2021.
Other operating revenues came in at $135.5 million in the September 2022 quarter, up from $53 million in 2021 and for the year to date, $155.8 billion down from $316 billion in 2021.
Cost of sales in the September quarter amounted to $1.267 billion versus $1.06 billion in 2021 and for the nine months $3.6 billion versus $3.1 billion, resulting in a gross profit of $1.18 billion for the September 2022 quarter, a slight improvement over the $1.16 billion in the previous year and for the nine months, $3.39 billion versus $3.1 billion. The gross profit margin slipped from 52 percent in the September 2021 quarter to 48 percent in 2022 with the year to date dipping from 50 percent in 2021 to 48 percent this year.
Administrative expenses amounted to $335 million in the September 2022 quarter, up 16 percent from $290 million in 2021 and for the nine months, rose 23 percent to $1.1 billion from $899 million in the previous year. Finance costs accounted for $25 million in the September 2022 quarter, up from $20.55 million last year and for the nine months, $32 million, down from $90 million in the previous year’s nine months. Taxation accounted for $117 million versus $127 million in the 2021 September quarter and $304 million for the nine months to September 2022, from $342 million in the previous year.
Shareholders’ equity ended the period at $36.66 billion. Total borrowed funds amounted to just $1.7 billion while it holds cash funds and investments of $9.5 billion. Current assets amount to $11 billion and current liabilities of $1.96 billion. Cash flows from operation generated inflows of $3.3 billion, after spending $1.5 billion on the purchase of property and $873 million on paying dividends and loan repayment of $500 million, the company used up all the inflows for the nine months.
Net book value per share amounts to $25.64, with the stock priced at $31.85 for a 24 percent premium. ICInsider.com projects earnings for the current year at $2.25 and $3 for 2023. These earnings suggest a stock price in 2023 in the $40 to $50 region at a PE of around 16 and it could be higher as interest rates should start to moderate by the middle of 2023 if not before. Going forward growth in the local economy is expected to continue for some time, accordingly, the wharf should be enjoying increased through put and result in increased revenues and profits.

Guardian finishing strongly in 2022

Guardian Holdings generated a 131 percent surge in profit attributable to shareholders of $1.06 billion for the nine months to September 2022, up from $457 million in the 2021 period, profit jumped 210 percent in the third quarter to $620 million from $201 million in 2021.

Earnings per share amounted to $2.67 for the September quarter and $4.55 for the nine months to September, that should end the year around $7 per share, with a PE of 3.5 times current year’s earnings and a stock price at J$530.
The vastly improved 2022 results follow a 5.3 percent increase in net premium income to $3.57 billion in the nine months to September, from $3.39 billion in the previous year and a 5.5 percent rise for the quarter to $1.2 billion versus $1.14 billion in 2021. Net income from all activities ended at $2.4 billion in 2022 for the nine months, up 26 percent from $1.89 billion in 2021 and for the September quarter $1.06 billion with a 67 percent increase over $634 million in 2021.
Net income from investment activity slipped 18 percent from $1.15 billion in the nine months to September 2021 to $942 million for the 2022 period. However, the quarterly figures reflect a marginal decline from $383 million in 2021 to 372 million this year.
Operating expenses of $1.15 billion for the nine months of September 2022 rose 6.9 percent from $1.07 billion and increased 33 percent for the quarter to $405 million from $305 million in 2021. Finance charges of $155 million for the nine months to September 2022 popped marginally from $150 million in 2021 and for the quarter $51 million versus $47 million in 2021.
Provision for taxation was $113 million for the year to September 2022, a reduction from the $136 million for the same period in the previous year and $68 million for the quarter in 2022 versus $59 million in 2021.
According to chairman, Patrick Hilton, “the group has been on a transformation journey centred on technology, people and processes. We have invested heavily in technology to bring world class customer service to our markets, leverage of scale of our group and reduce our operating costs. While in recent years, we have reaped some of the benefits, we are now at a resultant juncture where the payback on this investment is rapidly accelerating. In 2022 the group implemented many of these initiatives for our life, health and pension segment, with the alignment of our Trinidad and Jamaican operations bringing to reality operational synergies, cost savings and centres of excellence. These activities result in long-term cost savings which have the effect of creating favourable reserve movements contributing to the exceptional performance recorded in the year to date.”

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The group has two primary areas of operation. The life health and pension business generated underwriting revenues of $2.97 billion in 2022 and delivered net income from operations of $1.2 billion compared to underrating revenues of $2.77 billion in 2021, with an operating profit of $621 million. The other major segment of property and casualty business generated underwriting revenues of $999 million with an operating profit of $162 million in 2022 versus revenues of $961 million in 2021 with an operating profit of $121 million.
The group has total assets of $34.46 billion as of September compared to three $34.43 billion at the end of September 2021 with shareholders’ equity of $5.4 billion up from $4.87 billion at the end of 2021. The main assets include investment securities at $21 billion, loans and receivables at $2.4 billion, cash and cash equivalent at $3.8 billion dollars and investment property amounting to $1.67 billion. The main liability comprises insurance contracts of $19 billion and financial liability of three-point infant investment contract liabilities and third party mutual funds of $4.1 billion.
Cash flow brought in $1.44 billion to September. After investment activities, the group ended with $375 million before funds were used in financing and other activities and ended with negative flows of $103 million.

Surge in profit at Wisynco

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The Jamaica stock exchange listed drinks company Wisynco chalked up record revenues for the September quarter, with a solid increase of 29.8 percent to $11.9 billion above the $9.2 billion reported in September 2021, that led to a substantial gain in profit.

Wisynco headquarters.

The healthy revenue performance delivered a 34.7 percent rise in profit of $1.7 billion before taxation, compared to $1.3 billion in 2021. After provision for taxes of $431 million in the quarter compared with $316 million in 2021, profit attributable to Stockholders climbed to $1.3 billion, up 34.1 percent from $967 million earned in the prior year. The strong performance resulted in earnings of 35 cents per share for the 2022 quarter versus 26 cents in 2021.
“We are encouraged by the increased demand for our products in all channels, including exports which were up 10 percent over the same quarter of the prior year. The supply chain challenges continued into this quarter however we are seeing improvements,” the Mahfood brothers stated in the report to shareholders.
Gross Profit for the quarter of $4.3 billion was 31.8 percent more than the $3.3 billion achieved in the same quarter of the previous year. The Gross Margin ended up at 36.2 percent, slightly higher than the 35.6 percent for the corresponding quarter in the prior year. The results include an exchange loss of $126 million and a $59 million loss for the last year’s comparative quarter.
Selling and Distribution expenses rose 29 percent to $2.1 billion from $1.65 billion in the 2021 quarter, while Administrative expenses climbed 20 percent to $455 million from $379 million in 2021. Finance cost jumped to $150 million from $86 million in 2021.
According to the Mahfood brothers, “inflationary increases and variable expenses, which increase with Revenues, are the primary reasons for the expenditure growth however these increases are at a slower rate when compared to the rate of growth in Revenues.”
“Our Balance Sheet remains strong with a current ratio of 2.8 (same as last year’s quarter). Inventories remain higher than the prior year, although slightly lower than at June 30, as we continue to maintain higher amounts of key materials due to supply chain challenges. “
“We expect some normalization of inventories going into Q2 and Q3 as we utilize the inventories on-hand and we are seeing less congestion at global ports and freight rates improving,” the report further stated.

Wata one of Wisynco best known brands

Cash Flow generated inflows of $1.9 billion, after working capital needs and payment of taxation and capital and investment activities plus paying $751 in dividends, there was a net outflow of $1.4 billion. Importantly, $349 million was expended on the purchase of property plant and equipment with longer term investment absorbing $1.4 billion.
Shareholders’ equity of $19 billion up from $17.8 billion at the end of June 2022. Long term borrowing is down to just $920 million. Current portion of loan to be repaid over the next twelve months at $920 million, bringing the total amount of borrowed funds to $1.84 billion. Current liabilities amount to $6 billion and current assets at $17.2 billion resulting in net current assets of $11 billion that includes cash and equivalent of $7.6 billion. The group also has investment securities amounting to $1.7 billion. ICInsider.com projects $2 for the full year giving it a PE of 9 at a stock price of $18 it traded on Tuesday on the Main Market of the Jamaica Stock Exchange with earnings of $2.85 per share for the fiscal year 2024, making it a solid buy for long term gains.

Profit climbs at Lasco Manufacturing

Profit rose 23 percent at Lasco Manufacturing for the three months to September to $469 million from $380 million in 2021 and 13 percent from $782 million in the six months to September 2021 to $883 million in 2022.
Gross profit margin fell in the first quarter to just 34 percent but rebounded to 37 percent in the second quarter to September this year, similar to what obtained in 2021 and brought the year to date margin to 36 percent compared to 37 percent the previous year, suggesting the company has now restored the margins to 2020 levels.
Revenues rose 22.6 percent in the quarter to $2.87 billion from $2.33 billion in 2021 and up 17.5 percent for the six months to $5.47 billion from $4.66 billion. Gross profit rose 18.4 percent to $1.07 billion in the quarter, from $870 million in 2021 and climbed 15.3 percent to $1.97 billion for the six months compared to $1.71 billion in 2021.
Operating expenses rose 18.5 percent to $378 million in the 2022 September quarter versus $319 million in the comparable quarter in 2021. They increased 10.75 percent to $690 million for the six months to September 2022 versus $623 million last year.
Finance cost fell to $7 million in the September quarter versus $13 million in the three months in 2021 and $15 million to the half year to September versus $29 million in the prior year, with taxation jumping to $210 million in the quarter versus $173 million in 2021 and to $361 million in the half year to September 2022 versus $327 million last year.

Some of Lasco’s products

Cash Flow generated inflows of $1.38 billion to September. Dividend absorbed $413 million and loan repayment $109 million while working capital took up $720 and $436 million went into short term investments and purchase of fixed assets, resulting in net outflows of $312 million.
Shareholders’ equity of $9.9 billion, up from $8.4 billion at the end of 2021. Long term borrowing is down to just $48 million, with the current portion due to be repaid over the next twelve months being $207 million, other current liabilities amount to $1.5 billion, leading to net existing assets of $5.8 billion after taking into account current assets of $7.5 billion that includes cash and equivalent of $2.9 billion.
Earnings per share was 11 cents for the quarter and 21 cents for the half year, with ICInsider.com projecting 60 cents for the entire year, giving it a PE of 6.5 at the stock price of $3.85 it closed at on Friday on the Junior Market of the Jamaica Stock Exchange and earnings of 80 cents per shares for the fiscal year 2024 that could see the stock hitting $15 by then.
According to executive chairman Lascelles Chin, the outlook is that they “remain cautiously optimistic for continued growth in the forthcoming quarters as we have seen an easing of supply chain bottlenecks and material cost inflation seems to have stabilized. With the ongoing geopolitical conflict in Europe, headwinds are, however, possible. Whatever may arise, we will remain focused and proactive in executing our business plan to deliver growth and margin progression.”

Q2 profit climbs 26% at Lasco Financial

Profit climbed a respectable 26 percent for the September 2022 quarter to $74 million from $59 million in 2021, for Lasco Financial Services, with the six months’ profits climbing 17 percent to $157 million over the $134 million garnered in 2021. 
The improvement in profit arose from a 12.5 percent rise in income to $623 million for its second quarter to September against income of $554 million in the 2021 second quarter. Importantly, the performance of the September quarter exceeds that for the June quarter, when revenues came in at $564 million with profits of $56 million, suggesting that growth of revenues and profitability could be accelerating quarter over quarter and not only year over year.
For the half year, revenues rose just 3.7 percent to $1.188 billion from $1.145 billion for the six months in 2021.
For the 2022 September, quarter expenses excluding finance costs rose 11 percent to $469 million from $424 million in 2021 as administrative and other expenses climbed 18 percent to $324 million from $275 million in the 2021 September quarter and selling and promotional expenses declined from $150 million in the September 2021 quarter to $145 million in 2022. For the six months, total expenses increased by just 5 percent, from $857 million to $900 million. Administrative expenses increased 7 percent to $592 million from $555 million in 2021, Management reported that the increase is “in line with the expansion of services and growth in staff.” Selling and Promotional expenses rose marginally to $307 million from $302 million for the same period.
Finance costs fell from $46 million to $28 million in the September 2022 quarter and from $93 million for the September 2021 half year to $55 million in 2022. Taxation more than doubled from $25 million to $52 million in the September quarter and increased from $61 million in the six months to September 2021 to $76 million in 2022.
Earnings per share came in at 5.8 cents for the September 2022 quarter and 12.3 cents for the half year. With the December quarter usually generating the largest income and profit, ICInsider.com projects earnings of 50 cents for the year ending March 2023 and 90 cents per share for 2024. The outcome could be even better if the loan portfolio that was nearly $2 billion in 2019 grows back fast enough from the $812 million net of loan losses it fell to in March this year. Based on the earnings per share, the company’s stock trades at a PE of just 5.4 compared to an average of 12.6 for the Junior Market and just three times 2023 earnings, based on the closing price of $2.72 on Friday making the stock a strong buy.

Lasco Financial profit dropped 39% in 2018 Q2.

The company moved to expand its loan portfolio. Management points to a reduction in cash resulting from an “increase in loan disbursements as we make a push to expand our portfolio and market share”, management states in the commentary to shareholders.
Shareholders equity stood at $2.1 billion at the end of September this year, up from $1.84 billion at the end of September 2021, while borrowed funds amount to $1.5 billion, down from $1.64 billion at the end of September last year. Loans and receivables rose to $1.5 billion from $1.4 billion in September last year and cash and cash at bank and short term deposit amount to $1.64 billion versus $1.7 billion in 2021.
During the six months, $278 million in cash was provided from operating activities compared to $376 million in 2021, after $523 million was used in investing and financing activities cash and bank balance fell $244 million and reduced cash and cash equivalent to $722 million from $897 million in 2021.

Carib Cement post record profits

Profits at Caribbean Cement Company for the nine months to September came in at a record $4.25 billion up 35.7 percent compared to $3.1 billion in 2021 and almost matches the $4.34 billion of profits for the 2021 fiscal year.
Profit of $1.2 billion after tax was realized for the quarter to September compared to just $44 million in the similar period in 2021, resulting in earnings per share of $1.42 in the 2022 quarter and $5 for the nine months, compared to $3.68 for the nine months in 2021.
Third quarter revenues were lower than that of the June quarter of $6.7 billion, with profit coming lower as well by $240 million. Profit for the full year could end up at $6.50 per share or close to that.
The record profit performance emanates from revenues that rose 12 percent the $6.2 billion in the 2022 September quarter compared to $5.5 billion in the similar quarter of 2021 and $19.7 billion for the nine months this year versus $17.8 billion dollars in 2021. The company had no major repairs and maintenance expenditures during the period to date, unlike in 2021.
Cost of sales for the September quarter this year came out at $3.4 billion compared to $4.4 billion in 2021 but was flat for the year to date compared to 2021 at $10.8 billion.
Yago Castro, the managing director in his report to shareholders in reference to the improved profit performance, stated “that it is primarily due to reduction of cost of sales as a percentage of net sales to 56 percent from 80 percent in the same period last year. This cost reduction was attributed to the company’s decision not to undertake its planned major maintenance through the third quarter of the year compared to 2021 which was executed in July to August, this postponement of the planned maintenance is attributed to the excellent output of some of the cement kiln this year as well as delay in the arrival of key spare parts needed to conduct the general overall works.”
Administrative and other operating expenses increased to $700 million from $592 million for the quarter and rose to $2 billion from 1.85 billion for the nine months. Finance costs rose from $112 million in the 2021 third quarter to $154 million in September 2022 quarter while the nine months cost rose from $412 million to just $430 million in 2022.

Carib Cement plant

Taxation absorb $517 million for the September 2022 two quarter versus $291 million in 2021 and $1.5 billion for the nine months to September 2022 versus $1.1 million in 2021.
Cash flow generated from operating activities amounted to $2.2 billion dollars in the quarter and $3.8 billion for the nine months after paying $1.17 billion in dividends, the company’s cash position improved by $300 million to $1.1 billion in the quarter.
At the end of the quarter shareholders’ equity stood at $18.75 billion, up from $14.8 billion in 2021. Borrowed funds amount to $1.8 billion. Current assets amounted to $7.5 billion while current liabilities ended the quarter at $8.2 billion.
The company announced plans earlier this year to expand the plant capacity by 30 percent which is slated to cost $40 million and is to be completed by the second half of 2024, the chairman of the company Paris-Lyew Ayee reported.
The stock last traded at $57.50 on Friday on the Main Market of the Jamaica Stock Exchange with a PE of 8.8 times this year’s earnings, which is well below the market average of 13.6.

Profit jumps at CPJ but watch 2023

Two Fridays ago, investors snapped up 1,258,697 shares, 12 times the average Caribbean Producers shares traded since mid-September, but the price pulled back to $12.50 at the close of the first Friday’s trading in response to the company reporting record earnings of US$7.5 million after corporation tax of $1.744 million in delivering J$1.05 per share for the year to June, more than 50 percent over the US$5.24 million made in 2018, with no tax then payable, the previous best year.

Caribbean Producers traded 52 weeks’ high during the week following a near US$2 quarterly profit.

The company reported a loss of US$2.3 million in 2021, resulting in lower revenues as the hotel sector they sell to primarily operated at low levels after closure in 2020 due to Covid-19.
Sale revenues climbed 209 percent for the year, to $120 million from just $57 billion in 2021. The 2022 final quarter produced revenues that were 58 percent higher than in 2021, coming out at US$33.5 million and delivering a pretax profit of US$1.5 million, with the gross margin down to just 22 percent in the quarter. Inventory written down accounted for US$1.1 million in the June quarter, down from US$1.37 million in 2021, with the company posting revenues of US$21 million and profit of US$1.3 million.
The 2022 results were delivered, with tourism traffic at just 78 percent of 2019 for the 12 months to June this year, with the final quarter benefiting from tourist traffic just 3 percent less than in 2019.
Profit margins increased from a low of 24 percent in 2019 to 30 percent in 2022 and are up from 25 percent in 2021 and 27 percent in 2020, leading to gross profit rising to $34.8 million in 2022 from $14.74 million in 2021 and $20.7 in 2020.
Segment results show the Jamaican operation enjoying a 96 percent increase in revenues to third parties of $97.5 million, up from $46.9 million in 2021 and contributed segment results of $7.4 million, up from a loss of $2 million in the previous year, while profit for the St Lucian operations increased to $436,000 million from a loss of $522,000 in 2021, with revenues rising 103 percent to $23.45 million, from $11.56 million in the prior year.
Selling and administrative expenses rose 50 percent to $18.2 million for the year from $12.1 million in 2021, but depreciation remained nearly flat at $4.2 million from $4.19 million in 2021. Finance cost jumped 34 percent to $2.95 million from $2.2 million in 2021.
Gross cash flow brought in $13.5 million, but growth in receivables, inventories and addition to fixed assets offset by increased payables more than wiped out the inflows leaving a deficit of $3 million that was funded by net borrowings of $3.5 million.
At the end of June, shareholders’ equity stood at $23 million, Long term borrowings ended at $15.7 million and short term at $26.7 million. Current assets accounted for $62.6 million, including trade and other receivables of $8.4 million, inventories at $40 million, almost twice the level in 2021 and cash and bank balances of $4 million. Current liabilities amounted to $46.8 million. Net current assets ended the period at $16 million.
At the end of July this year, the company issued $13 million of Unsecured Fixed Rate US$ notes, with a tenor of five (5) years and during the continuance of an Event of Default bear interest at 10% per annum and at all other times 7% per annum. The monies received were used to repay existing related party loans at varying interest rates.
ICInsider.com forecasts J$2.75 per share for the fiscal year ending June 2023, with a PE of 5 times the current year’s earnings based on the price of $13.93 the stock traded at on the Jamaica Stock Exchange Main Market, with a price target of more than $40 in 2023.

Not mentioned in comments from the company is the outcome of discussions they were to have regarding an acquisition in the Easter Caribbean and the raising of fresh equity capital to help fund the acquisition and reduce the heavy debt load.

Jamaica Broilers flees Haiti

After several years of operating in a challenging and economically hostile environment, Jamaica Broilers decided to pull the plug on their loss making Haitian operation that once showed promise of long term viability.

The Board of Directors on Wednesday “accepted the recommendation of management to discontinue its operations in Haiti as conducting business in that jurisdiction has become unviable.”
For the fiscal year to April 2022, the Haitian market suffered a big blow, with sales nose-diving 44 percent to $1.3 billion from $2.4 billion in 2021 as that country continues to suffer from economic and social instability.
That segment results showed a worsening outturn with a loss of $365 million, from a loss of just $7 million in 2021. Up to the January quarter, the results showed a loss of just $11 million from revenues of $1.1 billion, but the company made an impairment provision of $141 million for this operation which is charged to cost of sales and administration and other expenses. Overall the group wrote down the value of their investment in Haiti by $904 million to just $308 million. The Haitian operation reported a loss of $83 million in the quarter to July, up from a loss of$48 million in 2021, with revenues of $86 million down from $426 million in 2021.
Revenue for the group in the July quarter this year amounted to $22.98 billion, up 30.5 percent from $17.6 million in 2021, with profit surging 288 percent to $1.1 billion from just $275 million in 2021.
In early trading on the Jamaica Stock Exchange, on Friday, Jamaica Broilers opened at $29.

Knutsford Express looking good

Jamaica cross-country luxury bus operator, Knutsford Express is all smiles again having turned a loss of $96 million in 2021 into a profit of $78 million before other comprehensive income in the year to May 2022, but the position is even better when the loss of $33 million in the discontinued Florida business is considered.
Revenues for the year ending May 2022, jumped 77 percent to $1.11 billion from a covid19 battered 2021, with $629 million. Other income brought in $21.5 million for the year, with just about all, generated in the last quarter and appears to be from real estate rental. The audited statement says nothing about its source, but there was virtually no other income in the prior year.
The fourth quarter generated revenues of $339 million up 96 percent from $173 million in the May 2021 quarter, with profit surging to $82 million for the quarter, from a minuscule $10 million in 2021 before losses from the discontinued business.
Unfortunately, the company fails to compute direct operating costs, as such gross profit is not reported in their full year or quarterly reports. A clear backward step in an expanding financial space. Based on the audited financial statements, ICInsider.com computes gross profit before staff cost at 60 percent for 2022, up from 52 percent in 2021, with fuel accounting for the largest part, coming in at $150 million in 2022 from $73 million in the previous year. Parts and supplies accounted for $59 million, up from $29 million. Insurance costs rose to $37 million from $28 million last year, while Toll fees consumed $35 million against $20 million m 2021.
Operating expenses rose 40 percent to $979 million, from $698 million in 2021, with Salaries, wages and related expenses accounting for $306 million, up from $219 million in 2021, with the number of staff increasing from 178 to 221. Finance costs more than doubled from $15 million to $36.6 million.
Earnings per share for the year amounts to 16 cents, including losses from the discontinued business and 22 cents excluding it, while the fourth quarter delivered earnings of approximately 15 cents per share or 60 cents annualized. ICInsider.com projects full year 2023 earnings at 90 cents per share, with the PE ratio at 8.3 times 2023 earnings compared to a market average of just under 13, an indication that the stock is undervalued.
The company generated $267 million in gross cash inflows and expended $223 million on the purchase of fixed assets and was left with $54 million that helped in pushing total funds to $106 million at the end of the year, in addition, investments amounted to $92 million.
Borrowings moved from $487 million to $512 million, while payables rose from $98 million to $151 million. Shareholders’ equity rose from $666 million at the end of May last year to $751 million.
Knutsford Express is a buy, with the price more than doubling by the end of 2023.