May 12, 2020
Expressed in United States dollars (except where it is indicated otherwise)
Caribbean Producers Jamaica Limited (CPJ) for the nine months ended March 31, 2020 reported revenue growth of 5% from $81.74 million in 2019, to close the period at $85.92 million. For the third quarter, the Company posted a 6% decline in revenues to close at $26.46 million relative to $28.01 million for the same quarter of 2019. CPJ noted that, “the group sales for the latter half of March 2020 were severely impacted by the unexpected shut down of hotels both onshore and offshore due to the COVID-19 global pandemic.” Furthermore, “the growth in revenue was observed both in onshore and offshore operations.”
Cost of operating revenue showed a 6% increase closing the period at $64.41 million relative to $60.83 million for the corresponding period in 2019. For the quarter, the Company recorded a 2% decrease in cost of operating revenue to close at $20.21 million relative to $20.57 million for the comparable period in 2019.
Consequently, CPJ recorded a 3% increase in gross profits to $21.51 million (2019: $20.90 million) for the nine months ended March 31, 2020. Gross profits for the quarter, however, declined to $6.25 million from $7.44 million in 2019.
Selling and administrative expenses were $16.41 million, an 8% decrease on the $17.82 million posted for the prior year. Depreciation increased by 74% closing the period at $3.21 million (2019: $1.85 million). Other operating income totaled $93,581; this compares with an operating loss of $172,883 booked in 2019. Whereas, expected credit losses totalled $62,500 (2019: nil) for the nine months ended March 31, 2020.
Profit before finance costs, income and taxation improved 327% to total $1.93 million relative to $452,123 in 2019.
Finance costs amounted to $1.83 million (2019: $1.33 million). Finance income increased by 193% to close at $845 (2019: $288). As such, profit before taxation was $100,692 compared to a loss of $876,424 in 2019.
There was a taxation charge of $101,954 (2019: $105,791) resulting in a net loss of $1,262 for the nine months ended March 31, 2020 relative to a net loss of $982,215 booked for the corresponding period last year. While for the quarter, net loss amounted to $519,889 relative to a net profit $150,419 million booked last year.
Net loss attributable to shareholders for the nine months amounted to $29,609 (2019: $1.01 million), while for the quarter, net loss attributable to shareholders amounted to $553,780 relative to a profit of $150,419 booked last year.
As a result, loss per share (LPS) for the nine months amounted to US0.003 cents compared to a LPS of US0.092 cents in 2019. LPS for the quarter amounted to US0.05 cents relative to an earnings per share of US0.02 cents. The trailing twelve-month LPS amounted to US0.017 cents. The number of shares used in our calculations amounted to 1,100,000,000 units. CPJ closed trading on May 12, 2020, at JMD$ 2.42.
The Company stated, “CPJ is the largest supplier of food and beverages to the Hospitality sector in the Island and its sal4es to this sector have been impacted adversely at least until the end of the fiscal year June 2020. To counter these effects, the Company has started focusing on direct marketing, by leveraging its presence on social media platforms, thereby ensuring that thee social distancing norms recommended by the Government of Jamaica are adhered to.” CPJ also noted that it has, “slowed down its imports and is currently focusing on the depletion of inventory at risk.”
Moreover, Management highlighted that the Company’s desired outcome is to “strengthen its IT platform for growth and to accommodate the announced plans for new hotel investments and room expansion.”
Balance Sheet Highlights:
As at March 31, 2020, CPJ’s total assets amounted to $71.99 million, an 11% increase from the $64.87 million booked in 2019. The growth year over year was linked to upward movements in ‘Right use of Asset’ which amounted to $7.30 million (2019: nil). Notably, accounts receivables and cash and cash equivalents as at March 2020 amounted to $18.16 million (2019: $17.10 million), and $4.42 million (2019: $2.80 million), respectively.
Shareholder’s Equity totaled $21.94 million (2019: $22.50 million) resulting in a book value per share of approximately US2 cents (2019: US2.05 cents).
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