LAB reports 1% decline in first quarter net profit

March 17, 2022

The Limners and Bards Limited (LAB), for the first quarter ended January 31, 2022, reported a 24% increase in operating revenues to $443.48 million, up from $356.26 million booked in 2021. Management noted the increase was due to, “core business, media placement (up $93.2 million or 62.2%) and advertising agency (up $3.6 million or 6.4%). Production was down $9.6 million or 6.4%.”

Cost of operating revenue rose by 25% for the period to $300.60 million (2021: $241.09 million). Consequently, gross profit for the period rose by 24% closing at $142.88 million compared to $115.18 million for the same period last year.

The Company reported a 42% increase in administration expenses to $75.01 million (2021: $52.67 million) due to “staff costs, repairs and maintenance of production equipment and depreciation and amortization costs.” as per LAB. Also, selling and distribution costs for the quarter totaled $390,747 compared to $504,095 for the previous period. Therefore, total operating expenses amounted to $75.40 million, a 42% increase from the previous period which was $53.17 million. However, profit before net finance cost and taxation rose by 9% to $67.47 million (2021: $62.01 million).

Net finance cost amounted to $1.68 million versus a net finance income of $4.93 billion booked in 2021. This was as a result of a reduction in finance income to $901,583 compared to $7.04 million for the same quarter ended January 2021. Finance cost for the three months closed at $2.58 million (2021: $2.11 million).

The Company reports a loss in value of investment classified as FVTPL of $21,490, relative to a gain of $80,586 booked in 2021 corresponding quarter.

Profit before taxation amounted to $65.78 million (2021: $67.02 million). Tax credit of $445,077 was booked for the period (2021: nil), as such net profit for the first quarter declined by 1% to $66.22 million (2021: $67.02 million), “mainly due to an increase in staff cost, reduction in finance income and a $1.3 million loss reported by our subsidiary, Scope Caribbean,” as per LAB.

Earnings per share (EPS) for the first quarter amounted to $0.070 (2021: $0.071). The trailing twelve month earnings per share amounted to $0.16. The number of shares used in our calculations is 945,690,252 units. Notably, LAB’s stock price closed the trading period on March 17, 2022 at a price of $3.37 with a corresponding P/E of 20.59 times.

Balance Sheet Highlights: 

As at January 31, 2022, the Company reported total assets of $934.03 million, a 37% increase when compared to the $680.76 million reported a year ago. This was as a result of increases in ‘Accounts Receivable’ and ‘Cash and Cash equivalents’ which closed at $359.90 million (2021: $198.33 million) and $400.29 million (2021: $342.25 million), respectively.

Shareholders’ Equity as at January 31, 2022 was $533.43 million compared to $461.27 million a year ago. This resulted in a book value per share of $0.56 compared to $0.49 in 2021.


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.