November 2, 2020
Express Catering Limited (ECL)
Unaudited for the three months ended August 31, 2020:
Express Catering Limited (ECL), for the three months ended August 31, 2020, revenues decreased by 90% for the period to US$444,140 (Q1 2019: US$4.54 million).
Cost of sales (COS) decreased by 87% for the period to US$159,423 (Q1 2019: US$1.23 million). Therefore, gross profit decreased year-on-year for the three-month period by 91%, to US$284,717 from US$3.31 million in Q1 2019. ECL noted, “We incurred additional cost of sales due to the need to purchase smaller volumes more frequently”.
Total expenses decreased by 52% for the period in review to US$1.05 million, down from US$2.21 million in Q1 2019. This decrease was associated with a 77% decrease in administrative expenses from US$2.04 million in 2019 to US$471,249 in 2020. As well as an 86% decline in promotional expenses from US$10,918 in 2019 to US$1,498 in 2020. Depreciation and Amortization saw a 275% increase to US$581,864 compared to US$155,291 for 2019. Which according to ECL, “was a result of the adoption of the new IFRS 16 on Leases.”
Consequently, operating loss for the first quarter amounted to US$769,877 versus operating profit of US$ 1.11 million recorded in the same period last year.
Finance cost of US$314,185 (2019: US$83,706) was booked for the period. No foreign exchange gain was materialized for the period. This resulted in total comprehensive loss of US$1.08 million compared to total comprehensive income of US$1.04 million booked in the corresponding period for 2019.
The twelve-month trailing loss-per-share was US 0.034 cents. While for Q1 2020 the LPS amounted to US 0.066 cents (2019 EPS:US 0.063 cents). The number of shares used in our calculations was 1,637,500,000 units. Notably, ECL closed the trading period on October 20, 2020 at a price of J$3.50.
Balance Sheet Highlights:
The company, as at August 31, 2020, recorded total assets of US$31.59 million compared to US$9.44 million as at August 2019 . This was mainly as a result of a drastic increase in ‘Property, Plant & Equipment’ from US$4.28 million in 2019 to US$26.43 million in 2020. Management noted that, “Fixed Assets expenditure relates to the development work on the revamping of the post-security food and beverage lounge that is being carried out by MBJ Airports Ltd. It is a contractual requirement that ECL contributes to the costs associated with the revamping exercise.”
Total Stockholders’ equity as at August 31, 2020 closed at US$2.90 million (2019: US$4.25 million) This resulted in a book value of US0.18 cents (2019: US 0.26 cents).
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