RJR profit explodes

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.

Profit doubles at Caribbean Cream for Q1

Caribbean Cream released first quarter results with revenues up a solid 28 percent to $549 million and profit doubled to $54 million after taxation of nearly $8 from $27 million after tax of $4 million with earnings of 14 cents per share.

Caribbean Cream’s Kremi product

Cost of sales rose 17 percent to $341 million from $292 million in 2020. Selling and distribution costs rose 21 percent to $15 million while administrative costs rose 41 percent to $126 million, finance costs came in at $5 million. Taxation rose to $7.7 million from $4 million in 2020.
Commenting on the results for the year in a joint statement Christopher Clarke, Chairman and Carol Clarke Webster director, operating expenses rose 35 percent or 38 million due to a number of factors, higher transport cost for an increased number of deliveries of product. “Internal reclassification of electricity from production to distribution to more fairly reflect energy usage by business segments’ salary increases and other staff related costs and the full annualized cost for the Ocho Rios depot. The directors stated that they are currently carrying out capital works at the properties for operations that will lead to reduced cost of utilities.
Cash inflows for the quarter were $98 million versus $64 million in 2020, but after working capital changes, inflows rose to $117 million, $62 million was expended on the acquisition of property and resulted in cash on hand of $264 million. Current assets stood at $453 million and current liabilities at $210 million, resulting in net current assets of $243 million. Shareholders’ equity grew to $888 million from $771 million as of May 2020 and loans amounted to  $324 million, of which $29 million is due to be repaid in the next twelve months.
IC Insider.com projects a profit of $320 million or 85 cents per share for the 2022 fiscal year and $1.50 per share for 2023. The stocks last traded at $6.90, after releasing the results, on the Junior Market of the Jamaica Stock Exchange, a 52 weeks’ high and the highest since October 2018. At Friday’s last traded price, the stock ended the week at a PE ratio of 8.3, well below the average of 13 currently for the Junior Market.

Where are the overdue RJR financials?

The fallacy in the JSE granting extension to companies to file annual reports a month and a half after they are, without requiring them to file the interim in the meantime, is one more exposed.

RJR shareholders deserve better.

In a notice to the Jamaica Stock Exchange on June 29, Radio Jamaica advised that they were making use of the general extension being allowed for companies with the financial year ending March 31, 2021, to report their annual audited results by July 14, 2021. This extension assists the management and auditors in managing the ongoing challenges on regular business activities posed by the COVID-19 pandemic, the advice stated.  At near midnight on July 15, the report is nowhere to be found on the exchanges’ website and there I no notice indicating the reason for the lateness.
Had good sense prevailed at either RJR of the JSE, investors in a major listed company would have had interim figures to digest. The JSE needs some major surgery and fast.

Lumber Depot profit bolted higher

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Lumber Depot profit surges

Profits at Lumber Depot bolted 555 percent from $22 million for the nine months in 2020 to $145 million for the year ended April 2021, as it grew revenues 14.7 percent to $1.43 billion from $921 million in 2020 nine months period.
The company operates a hardware store in Papine, St Andrew, for more than two decades and generated revenues that rose 7 percent in the April quarter over the January 2021 quarter to $377 million from $353 million and 21 percent over the April 2020 quarter of $311 million. Gross profit margin for the full year was 21 percent, an improvement on the 18 percent for the 2020 nine months period. Administrative costs rose 42 percent to $154 million from $108 million in the nine months to March 2020, but it would be up by 7 percent if the comparative periods were the same number of months.
Cash inflows for the year pulled in $157 million, but after working capital adjustments the amount climbed to $186 million and ended the year with a net gain of $114 million after dividend payment of $14 million and loan repaymentof $33 million. The company has cash funds of $143 million and investments of $117 million at the end of April, with the latter shown as a noncurrent asset.
Current assets stood at $317 million and current liabilities at $139 million, resulting in net current assets of $178 million. Shareholders’ equity grew 68 percent to $523 million and pushed cash and investments to $360 million from $129 million in 2020.
The company reports earnings per share of 21 cents, up from just 3 cents in 2020.
The stock traded 580,827 units up to $3.65 in early trading on the Junior Market of the Jamaica Stock Exchange, but the price dropped back to close at $3.50  at a PE of 16.7 times 2021 earnings and 13 times ICInsider.com’s projection of 27 cents for 2022.

Staffing chopped 30% at CPJ

Successful investors usually have keen eyes that spot good opportunities from afar before the crowd usually finds out that seems to be the case at the Montego Bay based Caribbean Producers (CPJ).

Caribbean Producers back in TOP 10

We have cut staffing from 450 to 315 and we did a lot of cost containment and some amount of restructuring of the operations, which Mark Hart, chairman of the company, puts at US$600,000 per annum. According to Hart, they believe that the manning levels will be adequate for the immediate future.
CPJ chalked up losses following the closure of the hotels last year and while the company lost money up to the March quarter this year, the stock price has more than doubled since the end of June last year, moving from $2.06 to $4.74 on Thursday. Most investors missed the train on this one.
The first thing investors ought to have observed was the reopening of the tourist sector with increasing visitor arrivals since travel restrictions were lifted in June last year. The second was a reduction in cost at the company and the strong cash flow since the closure in March last year.
One of the best signals, pointing to improvement, was trading in the stock by insiders and connected parties since the latter part of 2020. Last month, the company advised the Jamaica Stock Exchange that a connected party purchased 470,707 units of the company’s shares on June 29.
On December 23, last year, a connected party purchased 464,765 shares that followed a connected party purchase of 2,930,211 shares at around $2.63 on December 8. On November 25, last year, another connected party purchase took place for 185,002 shares. The only negative message was to the sale by a connected party of 5,500,500 shares on April 20, this year, at approximately $3.74. A deeper review by ICInsider.com indicates that the sale was a specially arranged deal to someone close to the seller. On February 19, the stocks closed, trading at $2.67 with just 12,000 shares traded but on the next day, 752,023 shares traded with the last traded price of $3.20, and then on the next day, 8,622,338 shares traded at $3.50. The above trades are a big vote of confidence that things were on the mend for the company.
Following the above, it should not be surprising to hear two directors speaking glowingly about developments at the company over the past year and plans for expansion for the future. “We have seen quick recovery for our core business,” said Thomas Tyler.
Hart stated that he thinks that the forecast made by Don Theoc of Mayberry Investments of $6 for the company’s shares in the next twelve months is conservative.
“We have expanded our grocery stores in St Lucia from 3,000 to 8,000 square feet in May and we are building out 9,000 square feet grocery store in the centre of Castries and working on breaking ground and should be ready in six to nine months.  In the north of St Lucia, we are looking at a 19,000 square foot retail store and in Montego Bay, we are expanding a 1,200 square feet retail store to 6,000 square feet.” “We have identified acquisition candidate in Jamaica and we are exploring,” Thomas Tyler stated; he went on to further state that the plan is “for revenues in St Lucia to move from US$15 million per annum now to $50 million in 3 years.”
The company suffered a loss of US$903,258 for the March quarter, up from US$553780 in the similar period last year and for the nine months to March, the loss ballooned to US$3.6 million from a loss of just US$29,609 in the prior year.
Sale revenues dropped 52 percent for the quarter, to US$12.7 million from US$26.5 million but fell 57 percent for the year to date, to US$37 million from US$86 million in 2020.
The company enjoyed an improved profit margin in the March quarter, with gross profit falling at a slower pace of 56.4 compared to the steeper decline in revenues, but gross profit for the nine months period, slipped by 54 percent.
Selling and administrative expenses fell 37 percent to $3.2 million in the quarter and 42 percent in the nine months period to US$9.4 million from US$16.4 million.
Finance cost declined in the quarter, to $442,000 from $581 million in 2020 and $1.83 million to $1.34 million for the nine months period, while depreciation was fall at US$1 million for the quarter and US$3.2 million for the year to date period.
The rationalization resulted in Inventories falling from US$28 million in March 2020 to US$18.7 million receivables fell from US$18 million down to US$10.5 million, while payables fell from US$15.3 million to US$6.33 million. Some of the declines are due to a lower level of business activity. Amounts borrowed to fund the operations remained at a high US$34 million, with shareholders’ equity of just $14 million.

Q2 profit jumps 22% at Scotia Group

Profit for the April quarter rose a decent 22 percent to $2.73 billion from $2.23 billion for the same period last year for Scotia Group, helped by lower staff cost and steeply reduced credit loss provision, with net interest income sagging sharply.

Scotia Group Kingston Branch

Net profit of $4.5 billion for the six months to April 2021 is up by $463 million or 11.5 percent compared to the corresponding period last year.
Net interest income dropped 13 percent from $6.3 billion to $5.5 billion in the quarter and for the half year, it slipped 9.5 percent to $11 billion from $12.48 billion. After providing expected credit losses, net interest income for the six-month period was slightly up to $9.9 billion from $9.8 billion in 2020, as expected credit losses were cut by $1.3 billion from $2.67 billion down to $1.4 billion. Other income increased $1 billion or 11 percent for the half year to $10.2 billion from $9.2 billion and increased by 11 percent from $4.29 billion for the April quarter to $4.78 billion. Foreign exchange gains contributed most to the rise in other income, with the April quarter enjoying a 39 percent bounce to $2.56 billion from $1.84 billion and for the half year an increase of 28 percent from $3.55 billion to $4.55 billion.
Segment results show a mixed picture for the half year, with Banking Treasury showing less income of $1.98 billion compared to $2.22 billion in 2020, with segment results of $833 million versus $1.08 billion. Retail banking saw a major about turn with a profit of $537 million from revenues of $9.5 billion against a loss of $139 million from revenues of $9.7 billion in 2020. Corporate and Commercial banking kicked in with revenues of $5.7 billion and profit of $2.18 billion from $5.45 billion and profit of $2.2 billion in 2020. Investment Management Services saw income and profit rising appreciably after generating $1.73 billion and contributed a profit of $1.3 billion to April this year versus $1.23 billion in revenues and profit of $627 million last year. Insurance revenues decreased by $700 million or 30.3 percent to $2.05 billion from $2.75 billion in 2020, while profit fell from $2 billion to $1.35 billion. The directors state that the fall is “due to the reduction in premium income stemming from the pandemic as well as lower actuarial reserve releases.”
Salaries and staff costs fell from $2.7 billion in the 2020 quarter to $2.49 billion and six months from $5.45 billion to $5.05 billion. Total operating expenses ended down at $5.59 billion from $5.88 billion and for the half year, cost rose from $13 billion to $13.36 billion.
The improved results are of import and the higher increase in the April quarter, encouraging. Still, the fall in net interest income suggests that major recovery in the Group’s core business may be some distance off, especially with contraction in the loan portfolio from $221 million at the end of October to $217 in January. Now $215 billion in April, the trend, however, suggests a slowing in the rate of decline. With, strong recovery in the tourism sector, the last major leg of the economy to recover, the bank may find new opportunities for increased lending and possible recovery of loan losses.
Before the impact of Covid-19 on the group’s operations, loans net of provision for credit losses was growing at a decent clip with an increase of 7 percent in 2020 to $216 billion, for 2019 loans grew 13 percent to $202 billion, in 2018 growth was 10 percent to $179 billion there was no growth in 2017 with $162 billion after an increase of 8 percent in 2016 and 7 percent in 2015.
Stockholders’ Equity rose to $118.4 billion from $112.4 billion at the end of April 2020. Deposits by the public grew to $361 billion from $334 billion at the close of April 2020 and Investment Securities remained at $145 billion as of April, similar to the same time last year, while cash resources jumped from $92 billion at the end of April 2020 to $136 billion at the end of the latest quarter, but down from $141 billion at the end of October last year.
What seems clear is that customers are using the Branches less to transact business and this is set to lead to reductions in costs in the future and help improve profitability and the bank’s image.
The group approved an interim dividend of 35 cents per share, payable on July 21, to stockholders on record on June 29. The stock traded at $41 on Monday at PE between 10 and 12 times 2021 estimated earnings.

Profit bounces at Stationery & Office Supplies

Many investors miss out on highly profitable investments in the stock market by focusing on the wrong things. Take the case of Stationery and Office Supplies that suffered a major reversal in profits in 2020 with just $33 million versus $135 million in 2019, with earnings per share of a mere 13 cents versus 54 cents in the prior year.

Operating profit at Stationery & Office Supplies grew 33% in 2021 Q1 over 2020.

Some investors see the historical PE Ratio for Junior Market for 2020 to be around 24 cents per share, as such, the company would be worth around $3 per share. Others would prefer to use the trailing four quarters earnings. Based on that, the company’s trailing earnings to March would be just 22 cents and the value would be even less than the full year’s numbers suggest. On the above two bases, at $7.52, the last price the stock traded at would be highly overvalued. The stock price jumped from $6 in trading before the results to trade mostly over $8 suggesting others investors are looking beyond the historical earnings and focusing on the future.
For the March quarter, revenues fell 7 percent to $313 million from $337 million in 2020. Importantly the average monthly sales rose 29 percent over the average for all 2020 to $104,522 but fell 7 percent against the 2020 first quarter. Despite the fall in revenues, profit rose 33 percent before gains on sale of fixed assets and loss of fair value of financial investments. A loss of $22 million was incurred in the June quarter last year, with negative 9 cents per share and profit in the September quarter last year was a mere $6.8 million from a 19 percent fall in revenues to just $240 million or $79,855 per month.
The company enjoys a ten-year tax profit break and will be subject to zero taxation until mid-2022 and 50 percent thereafter for five years.
Gross profit margin rose to 54 percent for the quarter, from 49 percent in 2020, as gross profit rose just four percent to $170 million. Administrative and other costs fell six percent to $81 million from $86 million in 2020.  Selling and promotion expenses fell 10 percent from $23 million in 2020 to $21 million. Finance costs dipped from $3.3 million to $2.5 million as the company continues to use limited debt financing to grow its business.
The principal activities of the company are the sale and distribution of stationery and office furniture.
Shareholder’s equity stood at $665 million at the end of March 2021 and loans amounts to $163 million, with $36 million earmarked to be repaid to March 2022. Current assets totaled $522 million and current liabilities $140 million. Inventories rose to $245 million from $226 million in 2020 and receivables dropped from $172 million to $124 million representing around a month of sales.
Cash funds and investments amount to $121 million after the company generated cash funds of $69 million before working capital and capital financing needs. ICInsider.com projects earnings of $1 for the financial year to December 2021 and $1.60 for 2022.
The stock last traded at $8.20, with a PE ratio of 8 based on the reported earnings and 5 based on the 2022 projected earnings.
Contributors to this article own shares in the company.

Cost cuts drive up Lasco Distributors profit

Profit at Lasco Distributors is 26 percent higher for the year to March 2021 at $909 million, but profit before taxation climbed a much stronger 36 percent to $1.1 billion from $818 million in 2020 as cost reduction and moderate revenue growth of four percent helped with the increase in the bottom-line. Pretax profit in the fourth quarter rose 23 percent to $246 million over $201 million in the 2020 period.
The company enjoyed a ten-year tax profit break and is now subject to full taxation as of October 12, last year.
Gross profit margin came in at 18 percent for the year, down from 19.4 percent in the 2020 fiscal year and the prior two years. Revenues climbed for the fiscal year to $20.3 billion from $19.5 billion in 2020 but fell three percent in the final quarter to $5.06 billion, from $5.195 billion in 2020.
Administrative and other costs fell 10 percent for the year to March to $2.13 billion from $2.37 billion in 2020. Staff cost fell from $1.72 billion to $1.56 billion as the number of workers fell from 532 to 509. Selling and promotion expenses fell from $703 million to $549 million.
Finance cost dipped from $15 million to $5 million as the company continues to pay down loans that stood at $1.05 billion at the end of March 2020 to $820 million at March 2021, with $454 million earmarked to be repaid in 2022 fiscal year. Taxation charged for the year amounts to $207 million, up from $93 million in 2020.

The principal activity of the company is the distribution of the manufactured products of Lasco Manufacturing that includes soy-based products, juice drinks, water and packaging of milk-based products and Pharmaceutical and other products manufactured by third parties.
Shareholder’s equity stood at $6.5 billion at the end of March 2021. Cash funds and investments amount to $2.69 billion after the company generated cash funds of $1.27 billion before working capital and capital financing needs and paying a dividend of $179 million.
Lasco generated earnings per share for the year of 26 cents, up from 21.3 cents in 2020. ICInsider.com projects earnings of 40 cents for the fiscal year to March 2022 and 45 cents for 2023.
The stock last traded at $4, with a PE ratio of 10 based on the reported earnings and 9 based on the 2023 projected earnings. The price target to March 2022 for the stock is $6.

Lasco Manufacturing 2021 profit jumps 41%

Cost cuts and moderate revenue growth drove profit at Lasco Manufacturing 41 percent higher for the year to March this year to $1.33 billion, with the fourth quarter rising 83 percent to $367 million over that of 2020.
Pretax profit jumped a strong 83 percent for the quarter, to $457 million from $249 million in the 2020 March quarter and 46 percent for the 12 months to March, with $1.75 billion up from $1.2 billion in 2020. The profit is subject to full taxation as of October 12, last year.
Gross profit margin came in at 38 percent for the year, up from 37 percent of the 2020 fiscal year. Revenues climbed four percent for the fiscal year, with $6.2 billion but were flat at $2 billion for the fourth quarter.
Administrative and other costs fell 13 percent for the year to March to $1.19 billion from $1.36 billion in 2020, resulting from a fall of $167 million in staff cost from $717 million to $550 million, primarily as the company incurred no share option cost in the year versus $185 million in the prior year. Selling and promotion expenses fell from $291 million to $137 million.
Finance cost dipped from $94 million to $59 million as the company continues to pay down loans that stood at $1.05 billion at the end of March 2020 to $820 million, with $454 million earmarked to be repaid in the 2022 fiscal year. Taxation consumed $376 million of profits, up from $217 million in 2020.
The company’s principal activities remain, the manufacture of soy-based products, juice drinks, water, and packaging of milk-based products.

Lasco Manufacturing products.

Shareholder’s equity stood at $7.9 billion at the end of March 2021. Cash funds and investments amount to $2.35 billion after the company generated $1.6 billion in cash inflows, before working capital and capital financing needs and paying a dividend of $251 million.
Lasco generated earnings per share for the year of 33.2 cents, up from 23.67 cents in 2020. ICInsider.com projects earnings of 40 cents for the fiscal year to March 2022.
The stock last traded on the Junior Market of the Jamaica Stock Exchange at $5.50, with a PE ratio of 16.6 based on the reported earnings and 13.8 based on the 2022 projected earnings. The price target for the stock, to March 2022, is $7-8.

Profit jumps 19.5% at Wigton

Wigton Windfarm delivered a 19.5 percent increase in net profit of $793 million for the year to March 2021, up from $663 million generated in 2020 from Sale revenues that rose 7.2 percent to $2.59 billion in the year to March 2021 from $2.4 billion in 2020.

Wigton closed at anew high of $1

Wigton traded 65 cents of shares on Wednesday.

This is the second year in a row that the profit is rising, following a 30 percent increase in the 2020 fiscal year over that of 2019.
Other income contributed $218 million to profit up from $221 million in 2020 and incurred direct costs of $789 million for the year against $764 million in 2020. General administrative expenses amounted to $491 million for the year against $479 million in 2020, while finance charges amount to $503 million compared to $527 million in 2020. Taxation ate up 4234 million, up from $206 million in 2020.
The company generated a positive cash flow of $1.6 billion repaid loans to the tune of $710 million and paid out a mere $28 million in dividend.
Wigton ended the year with cash of $3.2 billion and is a part of the total current assets of $3.7 billion but there was only $117 million in current liabilities but the company borrows $5.6 billion and has shareholders’ equity of $4.2 billion.
The company earned seven cents per share, with 202 coming in at six cents. With the stock selling at 65 cents on the Main Market of the Jamaica Stock Exchange, it appears cheap, but investors have to consider that the company had indicated that the rate collected on one of the turbines will fall sharply from what would have been received for the 2021 fiscal year, as such the reduction is going to have a major negative impact on revenues and profit going forward.
Here is what the audited accounts stated “Wigton Phase II which was commissioned in December 2010 and supplies 18MW power to the grid. The plant was awarded the avoided rate for the energy it supplies and as per the terms and conditions of the Power Purchase Agreement (PPA), the final rate adjustment for this plant was applied at the end of March 2021. The rate adjustment will translate to approximately fifty percent reduction in the revenue from Wigton Phase II in United States Dollars. This is projected to equate to an overall fourteen percent decrease in revenue in Jamaican Dollars.
The effect of the rate adjustment will reduce revenues by approximately $380 million before tax and will result in net profit coming in around $470 million of 4.3 cents per share for the 2021/22 fiscal year and that would put the value of the stock around at the latest price of 65 cents at a PE of 15.”