November 17, 2020

For the nine months ended September 30, 2020:-

Consolidated Bakeries (Jamaica) Limited (PURITY), for the nine months ended September 30, 2020 recorded a 2% decline in revenue to $770 million from $786.66 million reported for the corresponding period in 2019. For the third quarter, the company recorded a revenue of $226.38 million (2019: $237.99 million), representing a 5% contraction.

Cost of sales for the period fell by 5% to close at $465.98 million (2019: $488.80 million), leading to a gross profit of $304.02 million (2019: $297.86 million). Within the quarter, PURITY recorded cost of sales of $134.44 million, down 10% relative to $149.52 million booked at the end of the third quarter for 2019. As such, third quarter’s gross profit totalled $91.94 million, up 4% year over year (2019: $88.47 million).

The Company reported total expenses of $287.79 million, a 2% rise when compared to the $282.97 million reported in 2019. Of this, administrative expenses amounted to $159.26 million, up 9% relative to $146.09 million reported in 2019. Selling Expenses went down by 8% to close at $104.94 million (2019: $113.56 million). Total Expenses for the third quarter amounted to $92.98 million relative to the $93.12 million booked in 2019.

This resulted in an operating profit of $16.23 million for the nine-months period, compared to an operating profit of $14.89 million documented for the comparable period in 2019. For the third quarter, Operating Loss amounted to $1.05 million relative to an Operating Loss of $4.65 million booked in 2019.

Finance Cost grew by 27% to close at $10.40 million versus $8.20 million booked twelve months earlier. Interest and other income closed the period at $1.03 million, 72% below the $3.66 million recorded for the nine months ended September 30, 2019.

Consequently, PURITY recorded Pre-tax Profit of $6.86 million compared to a Pre-tax profit of $10.34 million in 2019. Pre-tax loss for the quarter closed at $3.02 million in 2020 compared to a Pre-tax loss of $5.24 million in the previous corresponding quarter.

The Company incurred taxes of $858,036 and deferred taxes of $762,203 for the period under review, resulting in a Net Profit of $5.24 million versus a profit of $8.41 million last year. For the third quarter, the Company booked a net loss of $2.64 million in contrast to a loss of $5.22 million for the corresponding quarter in 2019.

As a result, earnings per share (EPS) for the nine-months amounted to $0.02 compared to an earnings-per-share (EPS) of $0.04 reported in 2019 For the quarter, the loss-per-share totalled $0.012 relative to a LPS of $0.024 in 2019. The twelve-months trailing LPS is $0.07. The number of shares used in our calculations is 222,709,171 units. PURITY stock last traded on November 16, 2020 at $1.35.

Balance Sheet at a glance:

PURITY, as at September 30, 2020, recorded Total Assets of $999.27 million, a decrease of 1% year over year. The decrease was attributed mainly to a 52% contraction in ‘Investment’ which closed at $23.30 million (2019: $48.83 million). Notably ‘Cash and Cash Equivalents’ and ‘Property Plants and Equipment’ recorded growth amounting to $72.35 million (2019: $66.57 million) and $765.88 million (2019: $743.40 million), respectively.

The company closed the period with Shareholders’ Equity in the amount of $713.16 million (2019: $735.49 million). As a result, the company now has a book value per share of $3.20 (2019: $3.30).

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