ECL reports 219% increase in year end net profits

Date: September 5, 2018

Express Catering Limited (ECL) for the year ended May 31, 2018 reported a 10% increase in revenue to US$15.71 million (2017: US$14.23 million). Revenue for the quarter advanced 5% to close at US$4.35 million relative to US$4.21 million reported the previous year.

Cost of sales (COS) increased by 13% for the period to US$4.60 million (2017: US$4.08 million). As a result gross profit increased year-on-year by 9%, from US$10.15 million in 2017 to US$11.1 million in 2018. Gross profit for the fourth quarter improved from US$2.69 million in 2017 to US$2.82 million, a 5% increase year over year.

Total expenses decreased by 16% for the period in review to US$7.15 million for 2017, down from US$8.51 million booked for 2017’s year end.

  • The decrease was associated with a 17% decline in administrative expenses to US$6.61 million from US$7.97 million:
    • Group recoverable costs booked in 2017 in the amount of US$1.4 million was not repeated for the current financial year.
    • Franchise fees declined for the year by US$636,686 to US$481,133 (2017: US$1.12 million).
  • Depreciation and Amortization saw a 3% decline to US$511,804 compared to US$525,418 for the comparable period in 2017.
  • Promotional expenses however saw a 73% increase from US$20,762 to US$35,931. Total expenses for the quarter declined 25% to close at US$1.67 million (2017: $2.23 million).

 Consequently, operating profit for the period grossly increased by 141% to US$3.95 million (2017: US$1.64 million). Operating profit for the quarter totalled US$1.1 million, a growth of 154% relative to US$451,581 booked for the corresponding quarter of 2017.

Finance cost of US$341,131 (2017: US$362,347) was incurred for the period, while foreign exchange loss amounted to US$44,379 relative to the gain of  US$37,207 booked in 2017.

Pre-tax profit for the year totalled US$3.56 million, a 170% increase above the US$1.32 million recorded for 2017.

Taxation for the period totalled US$114,969 (2017: US$240,774). Consequently, net profit for the period amounted to US$3.45 million, a 219% increase above the US$1.08 million recorded for 2017.  For the quarter, net profit amounted to US$925,167 versus US$131,500 booked for the comparable period in 2017, a 604% increase.

Earnings per share (EPS) for the year ended totaled US$0.21 cents (2017: US$0.07 cents). Earnings per share for the quarter amounted to US0.06 cents (2017: US0.01 cents). The number of shares used in the calculation was 1,637,500,000 units. Notably, ECL’s stock price closed the trading period on September 5, 2018 at a price of JMD$8.00.

Balance Sheet Highlights:  

The company, as at May 31, 2018, recorded total assets of US$12.41 million (2017: US$9.54 million). Notably, property, plant and equipment amounted to US$4.65 million (US$4.44 million), while ‘Owing by related companies’ totalled US$6.0 million (2017: US$3.62 million).

 Total Stockholders’ equity as at May 31, 2018 closed at US$6.48 million (2017: US$4.55 million); this resulted in a book value of US$0.40cents (2017: US$0.28 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.

2018-09-05T22:21:27+00:00