ECL reports 3% increase in six months net profits

Date: January 15, 2018

Express Catering Limited (ECL) for the six months ended November 30, 2018 reported a 4% increase in revenue to US$7.18 million (2017: US$6.88 million). Revenue for the quarter advanced 2% to close at $3.12 million relative to $3.07 million reported the previous year. According to management, “We constantly benchmark our minimum growth target to be within the rate of passenger growth of 4.78%. Revenues were negatively impacted by the upgrading works being carried out by the operators of the airport. Resurfacing of runway works caused closure of strategic departure gates during the Quarter. The east concourse, where the major Food Court is located saw a number of gates closed during the Quarter to facilitate the upgrading works. This means that flights were diverted to the west concourse that has fewer food and beverage options due to design of the airport. The long term plan is to redesign the Food Court to be central to both the east and west concourses.”

Cost of sales (COS) increased by 5% for the period to US$1.93 million (2017: US$1.85 million). As a result gross profit increased year-on-year for the six month period by 4%, from US$5.03 million in 2017 to US$5.25 million in 2018. Gross profit for the second quarter improved from US$2.26 million in 2017 to US$2.28 million for the six months ended November 30, 2018.

Other income slid by 69% to close the period at US$136 versus $443 a year ago.

Total expenses increased by 5% for the period in review to US$3.64 million for 2018, up from US$3.48 million booked for the six months ended November 30, 2017. This increase was associated with a 5% increase in administrative expenses to US$3.33 million from US$3.19 million. Depreciation and Amortization saw a 5% jump to US$285, 454 compared to US$271,721 for 2017. Promotional expenses saw an 8% increase from US$21,386 to US$23,017. Total expenses for the quarter rose 4% to close at US$1.70 million (2017: $1.63 million).

Consequently, operating profit increased by 4% to US$1.61 million (2016: US$1.55 million). Operating profit for the quarter totalled US$579,120 a 8% decline relative to US$630,143 booked for the corresponding quarter of 2017.

Finance cost of US$169,838 (2017: US$174,759) was incurred, while foreign exchange loss for the six months amounted to US$16,917 compared to a gain of US$4,208 for the corresponding period in 2017.

Consequently, profit for the period amounted to US$1.42 million, 3% above the US$1.38 million recorded for the first six months of 2017. For the quarter, profits amounted to US$481,318 versus US$544,622 booked for the comparable period in 2017.

The twelve-month earnings-per-share was US0.021 cents, while for first six month ended November 2017, it amounted to US0.08cents (2017: US0.084 cents). Earnings per share for the quarter amounted to US0.029 cents (2017: US0.033 cents). The number of shares used in our calculations was 1,637,500,000. ECL stock price last traded on January 14, 2018 at $8.02.

Balance Sheet Highlights:

The company, as at November 30, 2018, recorded total assets of US$6.69 million (2017: US$9.20 million). Notably, property, plant and equipment as at November 30, 2018 amounted to US4.48 million 92017: US$4.41 million), while ‘Trade and other receivables’ totalled US$536,736 million (2017: US$125,190). ECL highlighted, “Fixed Asset expenditure during the quarter was $56,252. This resulted in combined half year expenditure of US$134,787, the majority of which was spent to continue the work on the additional Starbucks locations in the Airport as well as completed during the second Quarter. Increase in Trade and Other Receivables is temporary and is expected to be returned to year end levels. The balance owing by related parties was paid down by $5.77 million during the quarter. Just under US$1.0 million was paid to vendors during the 6 months; majority of this was owed for the expansion of the Starbucks locations.”

Total Stockholders’ equity as at November 30, 2018, closed at US$1.90 million; this resulted in a book value of US0.11 cents.

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