LAB reports 52% increase in six months net profit

June 16, 2020

The Limners and Bards Limited (LAB), for the six months ended April 30, 2020, reported 41% increase in revenues to close at $471.42 million versus $334.48 million booked in 2019. Revenues for the second quarter rose by 44% to $208.42 million (2019: $145.11 million). The LAB stated that, “the revenue growth was driven by growth in media (up $99.3 million or 72.5%) and agency (up $46.7 million or 78%). There was reduction in production (down $9.1 million or 7%) during the period.”

Cost of operating revenue rose by 46% for the six months period to $305.74 million (2019: $209.58 million). Management mentioned that there was an “increase in direct costs associated with agency (up 348%) and media (up 70%).” Consequently, gross profit for the period rose by 33% closing at $165.68 million compared to $124.90 million for the same period last year. For the quarter, gross profit increased 32% to $75.03 million (2019: $56.70 million).

Total expenses for the six months ended April 30, 2020 amounted to $78.53 million relative to $50.54 million the same period last year. Of this, the Company reported a 58% increase in administration expenses to $78.13 million (2019: $49.56 million), “attributable to staff costs (due to increase work volume),” as per Management. Whereas, selling and distribution expenses amounted to $397,129 (2019: $976,221) for the six months ended April 30, 2020. For the second quarter, total expenses summed to $37.07 million (2019: $25.75 million).

Consequently, profit before net finance cost and taxation rose by 17% to $87.15 million (2019: $74.37 million).

Net finance costs declined to $244,436 compared to net finance cost of $2.23 million for the same period in the prior year.

Loss in value of investments classified as FVTPL totalled $236,385 (2019: nil) for the six months ended April 30, 2020.

Profit before taxation amounted to $86.67 million (2019: $72.14 million). There was no taxation relative to a taxation charge of $15.02 million booked for the same period last year. As such, net profit for the six months grew by 52% to $86.67 million (2019: $57.12 million). Net profit for the quarter was reported at $37.76 million compared to $24.56 million booked in the corresponding quarter of 2019.

Earnings per share (EPS) for the six months amounted to $0.09 compared to $0.06 in 2019, while for the quarter EPS amounted to $0.04 versus $0.03 documented in the prior comparable quarter. The twelve months trailing EPS amounted to $0.13. The number of shares used in our calculations is 945,690,252 units. Notably, LAB’s stock price closed the trading period on June 15, 2020 at a price of $2.34.

LAB noted that, “In an effort to navigate financial challenges which the pandemic incurs on our industry, The LAB has employed various cost containment policies. The LAB has resolved to remain a critical resource for our clients. We are determined to remain competitive by reimagining the work process and have applied global standards and the Ministry of Health and Wellness’ COVID-19 safety precautions to all our production sets.”

 Balance Sheet Highlights:  

As at April 30, 2020, the Company reported total assets of $598.85 million, a 90% rise when compared to $315.52 million a year ago. This was as a result of ‘Cash and cash equivalents’ which closed at $352.41 million (2019: $89.37 million). This was however tempered by a downward movement in ‘Property, plant and equipment’ which amounted to $53.69 million (2019: $89.58 million).

Shareholders’ equity as at April 30, 2020 was $423.82 million compared to $139.94 million a year ago. This resulted in a book value per share of $0.45 compared to $0.15 in 2019.


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