Date: November 14, 2018
Figures are quoted in United States dollars (except where it is indicated otherwise):
Caribbean Producers Jamaica Limited (CPJ), for the first three months ended September 30, 2018 reported that revenues marginally increased by 0.04 %, to close the period at $24.31 million compared to the $24.30 million for the same period last year. According to the company “the reduction was primarily a result of the impairment in intangible asset of US$0.7 M resulting from the attempted implementation from the Warehouse Management System in the fourth quarter of prior year and logistics and supply chain disruption resulting in increased costs.”
Cost of goods sold inched up by 1%, closing the period at $17.98 million relative to $17.76 million for the same period last year. CPJ noted, “The stability in revenues was both noted on and off shore. The increase in the cost of operating revenue was mainly due to the extraordinary increase in container surcharges resulting from the backlog of containers on the port as a result of the delay experienced during the attempted implementation of the IT platform in the latter part of the final quarter prior year.”
This resulted in gross profits declining by 3% and closing the period at $6.34 million relative to $6.55 million in 2017.
Selling and distribution expenses were $5.91 million an 18% increase on the $5.02 million posted last year.
Depreciation for the period declined by 1% closing the period at $600,416 (2017: $607,235).
Other operating expense totaled $4,266 compared with the operating income of $13,407 booked the previous year.
Thus, Loss before finance costs, income and taxation totaled $178,987 relative to profit of $936,112 in 2017.
Finance costs was $389,651 versus $427,876 in 2017, a 9% decline while finance income slid by 2% to $108 (2017: $110). The company wrote off $692,000 in intangible assets for the period. As such, loss before taxation amounted to $1.26 million compared to a profit of $508,346 in 2017.
Taxes of $36,591 (2017: $45,000) were charged which translated into a net loss for the period amounted to $1.30 million (2017: Profit of $463,346).
Loss Attributable to shareholders ended the period at $1.28 million relative to net profits of $408,491 in 2017.
As a result, loss per share for the period amounted to US$0.117 cents compared to EPS of US$0.037 cents the year prior, while the twelve-month trailing EPS totaled US0.037 cents. The stock price as at November 14, 2018 was JMD$6.00. The number of shares used in our calculations amounted to 1,100,000,000 units.
CPJ further noted, “Management believes that the disruptive impact of the IT implementation project has been contained and the recovery effort to normalize the business has been achieved. The core business remains strong and robust. However, the extraordinary impact of the write down to the Profit & Loss will be a challenge to offset and deliver a strong year of financial results in the current year ending June 2019.”
The other major project that was announced for this fiscal year “is the construction of the new 56,000 square ft. distribution facility. This will be completed in Q2 ahead of schedule and within budget. The expectation of this capital project will enable greater efficiency in service delivery and consolidate all satellite warehouses in western Jamaica.”
The third major project is “the expansion of the CPJ St, Lucia distribution facility which will also be completed in Q2 and operational in Q3.”
Balance Sheet Highlights:
As at September 30, 2018, total assets amounted to $58.04 million, $873,183 less than its value a year ago (2017: $58.91 million).
Shareholder’s Equity as at September 30, 2018, totaled at $22.22 million (2017: $22.32 million) resulting in a book value per share of approximately US2.020 cents (2017: US2.029 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.