March 20, 2023
The Limners and Bards Limited (LAB), for the first quarter ended January 31, 2023, reported a 44% decrease in operating revenues to $247.76 million, down from $443.48 million booked in 2022.
Cost of operating revenue declined by 48% for the period to $155.75 million (2022: $300.60 million). Consequently, gross profit for the period decreased by 36% closing at $92.01 million compared to $142.88 million for the same period last year. Management noted, “This result is primarily due to the change in business needs post the pandemic. Management has therefore actively engaged new clients and new revenue streams which are aligned to its strategy for expansion into new markets. These clients will be onboarded throughout the fiscal year.”
The Company reported a 13% increase in administration expenses to $85.08 million (2022: $75.01 million). Also, selling and distribution costs for the quarter totaled $699,501 compared to $390,747 for the previous period. Therefore, total operating expenses amounted to $85.78 million, a 14% increase from the previous period which was $75.40 million. However, profit before net finance cost and taxation declined by 91% to $6.23 million (2022: $67.47 million).
Net finance income amounted to $151,465 versus a net finance cost of $1.68 million booked in 2022. This was as a result of an increase in finance income to $3.63 million compared to $901,583 million for the same quarter ended January 2022. Finance cost for the three months closed at $3.48 million (2022: $2.58 million).
The Company reports a loss in value of investment classified as FVTPL of $53,724, relative to a loss of $21,490 booked in 2022 corresponding quarter.
Profit before taxation amounted to $6.33 million (2022: $65.78 million). Tax credit of $295,351 was booked for the period (2022: $445,077), as such net profit for the first quarter declined by 90% to $6.63 million (2022: $66.22 million). LAB noted, “In anticipation of market shifts and to diversify and expand our revenue base we have placed a strong emphasis on content creation. The LAB holds an optimistic outlook on content creation and licensing, and we aim to capitalize on growing demand for international content on various video streaming platforms. As part of this strategy, we have already established strategic partnerships with international distributors and have three projects in development. We expect to see the impact of these efforts within the next 9 to 12 months.”
Earnings per share (EPS) for the first quarter amounted to $0.007 (2022: $0.070). The trailing twelve-month earnings per share amounted to $0.089. 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, 2023 at a price of $2.50 with a corresponding P/E of 28 times.
Balance Sheet Highlights:
As at January 31, 2023, the Company reported total assets of $790.27 million, a 15% decrease when compared to the $934.03 million reported a year ago. This was as a result of decreases in ‘Accounts Receivable’ and ‘Cash and Cash equivalents’ which closed at $288.82 million (2022: $359.90 million) and $326.50 million (2022: $400.29 million), respectively.
Shareholders’ Equity as at January 31, 2023 was $548.14 million compared to $533.43 million a year ago. This resulted in a book value per share of $0.58 compared to $0.56 in 2022.
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