August 17, 2020
For the period ended June 30, 2020, Caribbean Flavours & Fragrances Limited’s (CFF) revenue increased by 37% to $310.59 million relative to $226.33 million for the comparable period in 2019. For the quarter, the Company generated revenue of $161.20 million (2019: $113.75 million), a 42% increase year over year. CFF noted that, “this was driven by a growth in sales in both the local and overseas markets as well as capitalizing on new opportunities as a response to the COVID-19 pandemic.”
Cost of sales also increased for the period to $211.83 million, this compares to the prior year’s figure of $141.83 million, representing an increase of 49% year over year. Gross profit increased to $98.76 million for the period in review and compares to the prior year’s amount of $84.50 million. For the quarter, gross profit closed at $50.92 million (2019: $47.21 million). Management stated, “we continue to focus on implementing the strategy of improving our efficiencies while driving our cost of sales down with improved purchasing and logistics costs.”
The Company had a 20% year over year increase in total expenses to $59.45 million, up from $49.74 million in 2019. There was a 205% increase in selling & distribution expenses to $2.12 million (2019: $694,000). Whereas, administrative Expense for the period climbed to $57.33 million versus the prior year’s corresponding total of $49.04 million.
Consequently, Profit from Operations for the period decreased to $39.31 million versus $34.76 million booked for the period ended June 30, 2020. While for the quarter, there was a 1% decline from $23.61 million to $23.42 million in 2020. The Company reported an 84% increase in net finance income from $5.48 million in 2019 to $10.07 million in 2020.
Following taxation of $6.12 million (2019: $5.02 million), net profit for the period amounted to $43.26 million representing a 23% increase from the comparable period’s figure of $35.22 million, while for the quarter, net profit also increased by 25% from $23.29 million to $29.04 million in 2020. “This was driven by a combination of expense management and efficiency gains partly due to the pandemic”, CFF stated.
The earnings per share for the period months amounted to $0.48 (2019: $0.39). While, the EPS for the quarter amounted at $0.32 (2019: $0.26). The twelve months trailing EPS is $0.44. The number of shares used in this calculation was 89,920,033 units. As at August 17, 2020 the stock traded at $12.80.
Balance Sheet Highlights:
The company, as at June 30, 2020, recorded total assets of $637.94 million, an increase of 24% when compared to $513.33 million for the prior year. This increase was as a result of increases in ‘Right of use assets’ and ‘Receivables and payments’ which closed at $81.08 million (2019: nil) and $103.26 million (2019: $64.42 million), respectively.
Total Stockholders’ equity as at June 30, 2020 closed at $473.44 million, an improvement of 2% from $462.38 million last year. This resulted in a book value per share of $5.27 compared to a book value of $5.14 for the last year.
Analyst Certification -This research report is for information purposes only and should not be construed as a recommendation. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.