May 11, 2022
Figures are quoted in United States dollars (except where it is indicated otherwise):
Caribbean Producers Jamaica Limited (CPJ) for the nine months ended March 31, 2022 reported revenue increase of 133% from US$37.11 million in 2021, to close the period at US$86.44 million. For the third quarter, the Company posted a 123% increase in revenues to close at US$28.36 million relative to US$12.72 million for the same quarter of 2021. CPJ noted that, “despite the positive results the quarter started slowly, due to the uncertainty around the Omicron surge which interrupted worldwide travel, most notably in January and February 2022. There was a significant increase in tourist arrivals in March, resulting in a solid sales performance for the third quarter.”
Cost of operating revenue showed a 116% increase closing the period at US$58.83 million relative to US$27.21 million for the corresponding period in 2021. For the quarter, the Company recorded a 112% increase in cost of operating revenue to close at US$19.50 million relative to US$9.19 million for the comparable period in 2021.
Consequently, CPJ recorded a 179% increase in gross profits to US$27.61 million (2021: US$9.90 million) for the nine months ended March 31, 2022. Gross profits for the quarter also grew, this amounted to US$8.86 million up from the US$3.53 million posted in 2021.
Selling and administrative expenses were US$14.69 million, a 57% increase on the US$9.37 million posted for the prior year. Depreciation rose marginally by 1% closing the period at US$3.21 million (2021: US$3.18 million). Other operating income totaled US$647,278 ; this compares with an operating income of US$314,434 booked in 2021. Whereas, expected credit losses totalled US$157,202 (2021: US$142,069) for the nine months ended March 31, 2022. CPJ noted, “management continues to proactively engage in cost containment activities whilst implementing measures to enhance operating efficiencies to increase sales, market share and profitability. We are managing the increase in fuel and energy costs and evaluating an investment to increase the use of solar energy.”
Profit before finance costs, income and taxation totaled US$10.21 million relative to loss of US$2.48 million in 2021.
Finance costs amounted to US$2.29 million (2021: US$1.34 million). Finance income close at US$4,814 (2021: US$24,534). As such, profit before taxation was US$7.92 million compared to a loss of US$3.79 million in 2021.
Taxation charge amounted to US$904,276 (2021: nil) resulting in a net profit of US$7.02 million for the nine months ended March 31, 2022, relative to a net loss of US$3.79 million booked for the corresponding period last year. While for the quarter, net profit amounted to US$1.60 million relative to a net loss of US$998,942 booked last year.
Net profit attributable to shareholders for the nine months amounted to US$6.80 million relative to net loss attributable to shareholders of US$3.59 million reported in 2021, while for the quarter, net profit attributable to shareholders amounted to US$1.58 million relative to a loss of US$903,258 booked last year.
As a result, earning per share (EPS) for the nine months amounted to US$0.618 cents compared to a LPS of US$0.326 cents in 2021. EPS for the quarter amounted to US$0.14 cents relative to a loss per share of US$0.08 cents last year. The trailing twelve-month EPS amounted to US$0.739 cents. The number of shares used in our calculations amounted to 1,100,000,000 units. CPJ closed trading on May 11, 2022, at J$18.37 with a corresponding P/E ratio of 16.17 times.
Management noted, “The Group has strategically been focused on diversification of revenue streams with further investment in our stores and additional product lines for local consumption. The company continues to upgrade infrastructure, including our fleet, in anticipation of growth and to improve our service.”
Additionally “We look forward to the opening of the CPJ Market Drax Hall outlet in mid-summer of 2022. Our newly renovated and expanded CPJ market in MontegoBay is now completed and has been well received. CPJ has also begun the work of enhancing the foodservice product line in the CPJ Market in Kingston.”
Balance Sheet at a glance:
As at March 31, 2022, CPJ’s total assets amounted to US$78.57 million, a 44% increase from the US$54.67 million booked in 2021. The growth year over year was linked to the upward movements in ‘Inventories’ which amounted to US$29.98 million (2021: US$18.66 million) and ‘Account Receivable’ which ended at US$19.29 million (2021: US$10.49 million).
Shareholder’s Equity totaled US$22.44 million (2021: US$14.32 million) resulting in a book value per share of approximately US$2.04 cents (2021: US$1.30 cents).
Disclaimer:
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer(s) or securities as at the date of this report. 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.