JAMT Reports 12% Decline in Nine Months Profits Attributable to Shareholders

Date: July 31, 2018

Jamaican Teas Limited (JAMT)

For the nine months June 30, 2018:-

Jamaica Teas Limited (JAMT) for the nine months ended June 2018 reported a 14% increase in revenue to total $1.34 billion (2017: $1.18 billion). According to the company, “Export sales increased by a strong 25 percent, domestic manufacturing revenues grew 9 percent and supermarket sales increased by 10 percent.”

Cost of sales increased 16% to $1.08 billion (2017: $928.70 million).  As a result, gross profit grew 5% to $264.57 million (2017: $252.31 million).

Notably, Other income reported a 29% growth year over year to $61.77 million relative to $47.97 million a year earlier.

Administrative expenses increased by 31% to $130.66 million for the nine months ended June 2018 relative to $100.03 million for the same period of 2017. “This was due to higher salary costs and depreciation provisions,” noted by Management. Sales and marketing cost climbed by 35% for the period closing at $38.26 million (2017: $28.42 million). Notably, there was a 37% reduction in finance cost moving from $14.26 million for the same period last year to $22.63 million in 2017.

Pre-tax profits fell by 20% for the nine months, decreasing from $179.84 million in 2017 to $143.15 million. JAMT incurred tax expenses of $10.57 million compared to $20.37 million during the 2017 comparable period. Net profit from continuing operations fell by 12% to close the nine months at $132.58 million (2017: $150.86 million). Profit after discontinued operations amounted to $131.32 relative to $148.96 million.

However, for the period net profit attributable to shareholders declined by 12% to close the period at $131.67 million (2017: $149.62 million).

Consequently, earnings per share increased to $0.19 compared to $0.22 in the nine months ended June 30, 2018. The trailing earnings per share amounted to $0.26. JAMT last traded on July 30, 2018 at $4.64

Balance Sheet at a glance:

As at June 2018, the company’s assets totaled $1.66 billion, an increase of 7% compared to the $1.55 billion reported as at June 2017. The growth was driven primarily by a 115% increase in Investments from $90.33 million in 2017 to $194.07 million for the period reported. The company stated that, “The Group purchased two investment properties at a total cost of $60 million. No valuation gains on the investment property portfolio have been recognized as yet and any gains for the year will be reported in our fourth quarter results ending 30 September 2018.”

Shareholders’ equity amounted to $1.15 billion as at June 30, 2018 (2017: $1.05 billion) resulting in a book value per share of $1.68 (2017: $1.53).



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.