Profit up at AMG

AMG Packaging posted nine months results recently, with flat revenues for the May quarter after recording lower income for the nine months in 2021 versus last year. Still, the company reported a strong 26 percent increase in profit to $21 million for the May quarter, pushing the year to date results to $42 million ahead of $38 million in 2020.
The improved results for the latest quarter came about with a big fall in inventory input that fell 11 percent from $94.6 million to $84 million, while cost for the nine months declined 9 percent from $295 million to $268 million. Other direct manufacturing costs fell in the May quarter from $30 million to $29 million and for the nine months from $104.4 million to $91 million.
Resulting from the fall in direct manufacturing costs, gross profit rose from $46 million in the quarter to $57.4 and for the nine months $150 million from $134.4 million.
Administrative and other expenses rose four percent, from $30.7 million in the 2020 quarter to $32 million and for the nine months, from $98 million to $102 million excluding gains or losses from foreign exchange movement. Foreign exchange movement contributed a loss of $2.3 million in the May quarter, down from a gain of $2.3 million in 2020 and a loss of $4.6 million for the nine months to May this year versus a gain of $4.5 million in 2020. Other income brought in $1.2 million in the May quarter versus $1.4 million in 2020 and for the nine months, $4.4 million compared to $2.2 million in 2020. Loss on disposal of fixed assets contributed a negative input of $4 million in the nine months period last year while taxation cost $3 million in the 2021 quarter and $2.4 million last year and $6 million for the year to date versus $5.4 million in 2020.

AMG Packaging pfoit rise

Cash inflow generated in the period to May amounts to $71 million versus $60 million in 2020. After working capital changes, inflows rose to $117 million. A sum of $62 million was expended on the acquisition of fixed assets resulted in a net outflow of $116 million, leaving cash on hand of $143 million, down from $233 at the end of May 2020.
Current assets stood at $394 million and current liabilities $87 million, resulting in net current assets of $306 million. Shareholders’ equity grew to $591 million from $530 million as of May 2020 and loans amounted to $122 million, of which $19 million is due to be repaid in the next twelve months.
IC Insider.com projects a profit of $66 million or 13 cents per share for the 2022 fiscal year. The stock last traded at $1.64 on the Junior Market of the Jamaica Stock Exchange at a PE ratio of 12.6, just below the Junior Market average of 13. Still, with more of the local economy opening up, the results for 2022 could prove to be better than the current year. Investors have to watch supply chain issues such as increased cost and dislocation of sourcing raw materials.

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.

Lumber Depot profit bolted higher

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.

Q2 profit jumps 22% at Scotia Group

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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.

Junior Market sets for record 4,230 points?

The Junior Market closed the week at 3,367.03 points with gains of near 28 percent for the overall market for the year to date and 66 percent from the 2020 low of 2,031.79 points on March 18 last year and now sits just 8 percent below the historical high for the market of 3,662.94 points back October 14, 2019.
The market was only above Friday’s close for one day in early January last year when the index closed at 3,378.20 points on January 3 and one day in June this year.
In the process, Lumber Depot gained 111 percent for the year, followed by Fosrich, 109 percent, Jamaican Teas 97 percent, Jetcon 96 percent, Stationery and Office Supplies, 76 percent, Express Catering 71 percent, Main Event 66 percent, Lasco Manufacturing and Caribbean Cream 41 percent.
The growth for the year to date would result in a 60 percent increase for the full year if the current trend continues and would see the market index rising to a record high of 4,230 points to sit just around the next area of resistance. That level would equate with an average PE of 16 times 2021 earnings and suggest that the current rally is likely to continue at a measured pace, similar to the rise from the 2020 low point.

Fontana Q3 profit jumps

Revenues at Fontana increase by 4.2 percent to $1.22 billion for the March quarter over the $1.17 billion generated in the 2020 March quarter, pushing net profit for the quarter up an impressive 238 percent to $73 million from just $21.6 million in 2020.
Gross profit rose at a slower pace to that of sales growth, with an increase of just 3 percent to $416 million, from $404 million in 2020, which management attributes to a shift in sales mix during the period. “Revenue on some of our higher margin products declined slightly, we saw increases in lower margin product sales which drove the top line,” the directors reported in their commentary on the results.
For the nine months to March 2021, net profit jumped 56 percent to $367 million over the $235 million earned in the 2020 period. The improved profits flowed from an 11 percent rise in revenues to $3.88 billion from $3.49 billion in 2020 for the nine months.
Administrative and other expenses fell from $325 million to $309 million for the quarter and from $944 million in 2020 to $926 million in the nine months to March 2021, while selling and promotion expenses went down to $20 million in the quarter from $22 million and from $79 million in the nine months to $68 million.
Finance costs rose to $32 million, impacted foreign exchange losses recorded in relation to the revaluation of the lease liability, resulting in an additional cost of $12.4 million for the period, the company reports.
Cash flows from operating activities generated $541 million for the nine months, up from $387 million in 2020, but after paying dividends of $100 million, repaying loans and lease commitments of $92 million and providing working capital of $210 million was retained and added to the balance of cash funds of $599 million previously pushed cash on hand to $809 million, an increase of 52 percent.
Current Assets rose from $1.4 billion to $1.76 billion, while Current Liabilities fell from $846 million to $725 million as payables fell from $655 million to $586 million, leaving the company in a healthy financial position. Shareholder’s Equity grew 21 percent to $1.76 billion, from $1.45 billion over the prior year.
Earnings per share ended at 29 cents compared to 19 cents for the previous financial year. ICInsider.com forecast is for earnings of 40 cents for the current fiscal year and 50 cents for 2022. The stock trades on the Junior Market of the Jamaican Stock Exchange at $6.

Fesco trades at $1.04

Fesco opened trading on the Junior Market of the Jamaica Stock exchange on Friday, trading 2.38 million shares at $1.04 up from 80 cents the share were sold to the market at.
The stock has 151,000 units on the bid at $1.04 with just 55 000 on offer at $1.06, but trading is frozen for an hour. The rise helped to push the Junior Market Index up to 3,155.07. The Main Market has climbed to 446,096.49 at 9.43 after rising to a high for the session of 446,591 points.

Knutsford Express on the mend

Good turnaround candidates are companies that investors can make oversized gains from, Knutsford Express falls into this category and investors would be wise to take a serious look at the company’s third quarter results to February this year.

Knutsford Express

While they did not return to profit in the quarter, they made huge strides in almost closing the gap, with the February quarter showing a moderate loss of a mere $1.7 million from revenues that fell 42 percent from $318 million to $185 million. The results show a marked improvement over November when revenues fell from $283 million to $149 million with a loss of $34 million. At the same time, the Jamaican operation enjoyed a breakeven position in the third quarter. The performance is in keeping with the Directors, comments stated in their report accompanying the quarterly for November, “we expect an improved performance in the next quarter.”
Information coming in about the tourist sector indicates that the industry is on the mend with the expectation for high demand for the summer months. This will augur well for Knutsford that transports visitors to places like Negril and Ocho Rios. In addition, a more buoyant tourism sector and greater vaccination of Jamaicans will encourage more Jamaicans to travel using their buses.
The latest development is good news for the company that suffered an 11 percent decline in revenue and a 78 percent drop in profit for the 2020 financial year and a loss of $26 million for the August 2020 quarter, which worsened to $34 million in the November quarter. This followed the $70 million loss incurred in the April quarter last year, as dislocations caused by the impact of the COVID virus the company’s severely affected operations.
For the February quarter, administrative and operating expenses fell at a much slower pace and amounts than the fall in revenues, with expenses dropping 31 percent from $271 million in the 2020 January quarter to $187 million in 2021.

Knutsford Express closed at an all time high of $16 on Friday

Finance income in the 2021 quarter pulled in $4 million compared to $757,190 collected in 2020, while finance costs declined from $7 million in 2020 to $4 million in 2021.
Revenue dropped 51 percent from $925 million for the nine months to February 2020 to $456 million in 2021.
For the nine months to February this year, administrative and operating expenses fell at a much slower pace and amounts than the fall in revenues, with expenses dropping 35 percent from $797 million in the 2020 quarter to $514 million in 2021. Depreciation charges accounted for $87 million, up from $74 million in 2020.
The US operation generated a mere $638,000 in revenue and a loss of $11 million that is down from the prior year with a loss of $26 million from revenues of $21 million.
Cash flows from operating activities brought in $31 million, down from $190 million at the end of January 2020. After spending $137 million on the acquisition of fixed assets and borrowing $65 million, the balance of cash funds fell to $38 million at the end of the period, down from $96 million at the end of January 2020. The company also has investments amounting to $101 million compared to $140 million at the end of February 2020. The build out of their Drax Hall Business centre has used up some of the funds.
Current assets ended at $183 million at the end of the quarter, down from $357 million at the end of February in the previous year. Current liabilities stood at just $96 million and is well covered by current assets. At the close of January, shareholders’ equity stood at $710 million, down from $845 million as of January 2020. The company has borrowings of $300 million in borrowed funds on the books.
Earnings per share came out at a loss of just one cent for the quarter and 13 cents for the nine months. The company stands a good chance of returning to full or nearly full operations in the new fiscal year commencing in June. ICInsider.com’s estimate is for earnings per share of 45 cents for a PE of 20 times 2022 projected earnings. Knutsford Express currently trades on the Junior Market of the Jamaica Stock Exchange at $9.
The results for the latest quarter support ICInsider.com‘s forecast for the company to return to profit for the 2022 fiscal year.

Jamaica Broilers profit jumps 64%

Nine months through the fiscal year, profit after tax at Jamaica Broilers Group jumped 64 percent to $1.9 billion, up from $1.1 billion for the similar period to January 2020. The group had a solid third quarter performance registering a 61 percent increase of $287 million over the corresponding period to land at $758 million.
Revenue gains have been small, with a two percent rise to $41 billion for the nine months through January and a three percent rise to $14.7 billion for the third quarter. However, the second quarter enjoyed a seven percent increase in revenue that pushed profit before finance charge up a strong 42 percent at $1.3 billion for the quarter and 35 percent for the nine months at $2.97 billion.
Gross Profit climbed 11 percent to $3.84 billion from $3.45 billion and three percent to $10.28 billion from $9.94 billion in 2020. Gross Profit margin increased to 26 percent in the 2021 quarter from 24 percent in 2020 and remained at 25 percent for the nine months period.
Other Income rose from $81 million in the 2020 January quarter to $225 million and from $184 Million to $453 million for the nine months period.
Distribution Costs fell 14 percent in the third quarter to $601 million from $696 million in 2020 and by 6 percent to $1.7 billion for the nine months period from $1.8 billion in 2020.
Administrative Expenses rose 13 percent to $2.19 billion from $1.94 billion for the latest quarter and fell modestly for the nine months to $6.07 billion from 6.12 billion in 2020. Finance cost climbed 37 percent to $330 million from $240 million in the 2020 January quarter and dropped 33 percent for the nine months to $509 million, from $758 million in 2020.
Segment profits rose in the Jamaica operations by a convincing 29 percent, from a four percent fall in sales for the nine months largely driven by the first quarter performance with a 24 percent increase.

Jamaica Broilers announced a new acquisition last week

Sales in the USA market was up nine percent in Jamaican dollars with profit rising by 10 percent. Haiti continues to operate at a loss, but the group has managed to reduce the loss by 75 percent to just $23 million, with sales improving by 26 percent for the nine month period to $1.7 billion.
The group has been enjoying geometric growth as well as by using cheap debt in financing acquisitions of new businesses, helping to grow profits.
The business brought in gross cash inflows of $3.7 billion, up from $2.3 billion in 2020, $2.15 billion was spent on investing activities versus $2.46 billion in 2020, mainly due to acquisition of property, plant and equipment and ended with cash and equivalent of $3.4 billion up marginally from $3.37 billion in 2020. Borrowings of $20.7 billion as of the end of January 2021, while Shareholders equity stood at $17.9 billion, up from just under $16 billion at the corresponding point in 2020.
Listed among IC.Insider.com’s Top 15 for 2021 and remains on the TOP 10 list. Earnings per share closed out the quarter at 74 cents and $1.77 for the nine months. IC.Insider.com projects earnings per share of $3 for the year ending April and $4 for fiscal 2022. Jamaica Broilers last traded at $31 on Monday with a PE of 10 based on 2021 earnings and 7.4 times 2022 EPS.

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Junior Market jumps 47% since March 2020

The Junior Market climbed 47 percent in just over a year since the market collapsed by just over 39 percent in March last year from the close of 2019 when the market hit a multi-year low of 2,031.79 on March 18 last year.  
At the same time, the JSE Main Market, while trading above the March 2001 low, is nowhere near the 2020 high and closed out the first quarter marginally down on the 2020 closing.
The Junior Market is up 13 percent for 2021 to the end of March, clawing back most of 21 percent of the fall in 2020 and is now just 11 percent from the close of 3,348.97 at the end of December 2019.
In 2020, the Junior and Main Markets declined, with the Junior Market just edging out the Main Market index with a lower decline of 21 percent versus 22.6 percent for the year.
One year ago, to the end of March, the Junior Market Index dropped 29 percent to 2304.14 but was down a much steeper 47 percent to March 18, at 2031.79 points on the market index. The March 2020 low was the lowest point for the Junior Market since it closed at 2,032.77 points on July 1, 2016.
The market made some recovery last year from the year’s low when it moved higher on April 14, to 2,686.90 points but drifted down after some attempts to break over 2,600 points on a sustained level and closed out 2020 at 2,643.38.
In the meantime, the JSE Main Market failed to move higher in 2021, ending the first quarter 0.20 percent lower than the December close. It is still a bit lower than the 442,905.76 reached on the All Jamaica Composite Index after the early rebound from the 2020 low of 375,091.09 reached on March 25 last year, or the 438,045.18 reached subsequently on November 30.
The gains of eighteen stocks in the first quarter, this year, exceed that of the average of the market and just three performed worse, including CAC 2000 with a fall of 24 percent 19 percent decline for Dolphin Cove and 16 percent in the case of Knutsford Express. Five stocks contributing to the 2021 rebound for the Junior Market are Jamaican Teas up 60 percent, Indies Pharma 48 percent, Lumber Depot 47 percent, Blue Power 35 percent, Caribbean Flavours 35 percent and Fosrich 28 percent.
The Main Market recorded gains in 16 stocks that beat the market’s average move in 2021, with 26 falling below. Main market stocks with healthy gains are Ciboney with a stunning 142 percent rise, followed by Salada Foods with 125 percent gain aided by a 10 to one stock split, Grace Kennedy 37 percent, First Rock 31 percent and proven Investments 27 percent.  Palace Amusement Company that the Covid-19 dislocation has badly hurt is the worst-performing stock with a 51 percent decline, followed by Portland JSX with a loss of 25 percent and Radio Jamaica with 22 percent. Wisynco lost 14 percent and Wigton Windfarm 13 percent.