ECL reports 11% increase in first quarter net profit

October 15, 2019

Express Catering Limited’s (ECL), for the three months ended August 31, 2019, revenues increased by 12% for the period to US$4.54 million (Q1 2018: US$4.06 million).

Cost of sales (COS) increased by 13% for the period to US$1.23 million (Q1 2018: US$1.09 million). As a result gross profit increased year-on-year for the three month period by 11%, to US$3.31 million in Q1 2019 from US$2.97 million in Q1 2018.

Total expenses increased by 13% for the period in review to US$2.21 million in Q1 2019, up from US$1.94 million in Q1 2018. This increase was associated with a 14% increase in administrative expenses to US$2.04 million from US$1.79 million in 2018. According to the company, “a total of US$2.05 million in aggregate was expended on Administrative and promotional expenses at a rate of 45.18% of revenue compared to US1.80 million a rate 44.41% in the prior year. Maintenance rate increase in effect since October 2018 is responsible for the comparative change.” Depreciation and Amortization saw an 11% increase to US$155,291 compared to US$140,442 for 2018. Promotion expenses also rose 12% for the quarter from US$9,746 to US$10,918.

Consequently, operating profit increased by 8% to US$1.11 million (Q1 2018: US$ 1.03 million).

Finance cost of US$83,706 (2018: US$84,555) was booked for the period. Foreign exchange gain of US$12,636 was also booked for the quarter compared to a foreign exchange loss of US$4,398 booked the prior corresponding period. This resulted in total comprehensive profit for the year increasing by 11% from US$937,891 in 2018 to US$1.04 million.

The twelve month trailing earnings-per-share was US$ 0.23 cents while for Q1 2019, the EPS amounted to US 0.063 cents (2017:US 0.057 cents). The number of shares used in our calculations was 1,637,500,000. Notably, ECL closed the trading period on October 14, 2019 at a price of J$5.92.

Balance Sheet Highlights:  

The company, as at August 31, 2019, recorded total assets of US$9.44 million, a decrease of 24% when compared to US$12.49 million for the Q1 2018. This was mainly as a result of a 61% decline in ‘Owing by related companies’ from US$6.05 million to US$2.34 million, however, partially tempered by ‘Trade and other Receivables’ which increased to US$1.07 million(2018: US$ 518,001).

Total Stockholders’ equity as at August 31, 2019 closed at US$4.25 million, a 43% decrease from $7.42 million for the corresponding period last year.  This resulted in a book value of US 0.26 cents (2017: US 0.45 cents).

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