January 4, 2022

The Limners and Bards Limited (LAB), for the year ended October 31, 2021, reported 35% increase in revenues to $1.23 billion versus $911.74 million booked in 2020. Revenues for the quarter rose by 26% to $285.19 million (2020: $225.59 million). According to Management, “The revenue growth was mainly driven by growth in media placement up ($172.9 million or 35.14%), production up ($147.9 million or 63.21%) advertising agency down ($5.4 million or 2.94%) during the year.”

Cost of operating revenue rose by 39% for the period to $851.40 million (2020: $613.11 million). Consequently, gross profit for the period rose by 26% closing at $375.81 million compared to $298.63 million for the same period last year. For the quarter, gross profit increased 28% to $91.01 million (2020: $71.18 million).

The Company reported a 37% increase in total operating expenses to $237.26 million (2020: $173.42 million). For the quarter, the Company reported a 37% increase in total operating expenses which closed the quarter at $237.26 million (2020: $173.42 million). Of total expenses:

• Administrative expenses increased 35% to close at $233.52 million relative to $172.87 million in 2020, “increases are primarily attributable to the start-up costs for Scope and staff costs (due to increase work volume),” as per LAB.
• Selling and distribution costs closed at $3.75 million (2020: $548,564).

Impairment losses on the financial asset amounted to $2.61 million (2020: $1.54 million).

LAB noted, “For the year ended October 31, 2021, the Company performed in accordance with budget. The results of our new subsidiary company, Scope Caribbean Limited (“Scope”), which consists solely of start-up costs, are fully integrated into the consolidated accounts.”

Consequently, profit before net finance and taxation rose by 10% to $135.93 million (2020: $123.67 million).

Net finance income amounted to $17.50 million 380% increase when compared to net finance income of $3.65 million for 2020. ‘Gain in value of investments classified as FVTPL’ amounted to $69,841, relative to a loss of $231,013 booked in 2020.

Profit before taxation amounted to $153.50 million (2020: $127.08 million). There was a tax credit of $2.05 million booked for the period under review (2020: nil), as such net profit for the year end grew by 21% to $155.55 million (2020: $127.08 million). Net profit for the quarter was reported at $13.37 million compared to $19.27 million booked in the corresponding quarter of 2020.

Earnings per share (EPS) for the year end amounted to $0.16 compared to $0.13 in 2020, while for the quarter EPS amounted to $0.014 versus $0.020 documented in the prior comparable quarter. The number of shares used in our calculations is 945,690,252 units. Notably, LAB’s stock price closed January 3, 2022 at $3.72 with a corresponding P/E ratio of 22.62 times.

Balance Sheet Highlights:  

As at October 31, 2021, the Company reported total assets of $806.23 million, a 19% rise when compared to $676.07 million a year ago. This was as a result of Accounts Receivable’ and ‘Rights-of-use-assets’ which closed at $222.23 million (2020: $158.43 million) and $96.39 million (2020: $52.64 million), respectively. Also, ‘Cash and cash equivalents’ contributed to the growth closing at $415.25 million (2020: $380.42 million).

Shareholders’ Equity as at October 31, 2021 was $515.72 million compared to $464.23 million a year ago. This resulted in a book value per share of $0.55 compared to $0.49 in 2020.

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.