November 14, 2019
Everything Fresh Limited (EFRESH), for the nine months ended September 30, 2019, Revenue grew by 18% amounting to $1.64 billion, up from $1.39 billion reported a year ago. The third quarter reported revenues of $525.17 million, a 24% increase when compared to the $421.96 million for the corresponding period last year.
Cost of sales closed the period at $1.43 billion (2018: $1.22 billion) which translated into a 21% improvement in the company’s gross profit to $204.10 million (2018: $168.47 million). For the third quarter, gross profit increased significantly by 156% to $73.18 million in 2019 relative to $28.62 million in 2018.
Other operating income saw an increase of 10% to $1.56 million from $1.42 million.
Operating expenses totalled $233.99 million, 86% more than the $125.70 million booked the previous year. Of this, administrative expenses rose to $233.74 million (2018: $116.30 million) and selling and promotion expenses fell to $247,000 from $9.40 million in 2018. Thus, operating loss for the period amounted to $28.33 million relative to an operating profit of $44.19 million
Finance costs of $11.73 million was reported for the nine month period relative to $10.42 million reported last year. Thus, Loss before tax was $40.07 million for the period relative to a profit before tax of $33.77 million in 2018.
No tax was booked for the nine months ended September 30, 2019, whereas taxation of $8.27 million was charged a year before. Consequently, net loss amounted to $40.07 million compared to net profit of $25.50 million for the corresponding period in 2018. However, for the third quarter a net loss of $11.56 million was booked compared to a net loss of $17.53 million in the previous year. EFRESH stated, “the traditional distribution segment of the Company continues to thrive with a pre-tax profit of $36.7 million for the nine months representing an increase of 9.0% over the $33.8 million earned for the comparative nine months of the previous year. However, the Meat Processing made a loss of $76.8 million for the first nine months of 2019. Therefore, the Company made an overall loss of $40.1 million for the nine months ended 30 September 2019. This is mainly a result of the underutilisation of meat Processing Plant as the gross margins are yet at the breakeven point.”
Consequently, loss per share (LPS) amounted to $0.05 (2018: EPS of $0.03) while loss per share for the quarter amounted to $0.0148 versus a LPS of $0.0225 in 2018. The twelve months trailing LPS is $0.063. The number of shares used in this calculation was 780,000,000 shares. EFRESH stock price closed the trading period at a price of $1.23 on November 14, 2019.
The Company noted, “the amounts shown in comprehensive Income for 2019 include results from the Meats Processing division which began operations on 1 January 2019 and therefore the comparative amounts from 2018 relate only to the traditional Distribution division.”
Balance sheet at a Glance:
Total Assets grew by 1% or $5.93 million to close at $843.65 million as at September 30, 2019 (2018: $837.72 million). This increase in total assets was largely due to a 48% increase in ‘Inventories’ which closed at $325.47 million (2018: $220.03 million) as well as a 164% increase in Property, Plant and Equipment which closed at $135.42 million (2018: $51.35 million).
Shareholder’s equity totalled $583.22 million compared to the $633.27 million for 2018. This resulted in a book value of $0.748 (2018: $0.812).
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.