August 16, 2021

Mailpac Group Limited (MAILPAC)’s revenues amounted to $896.06 million for the six months ended June 30, 2021, reflecting a 23% year over year increase from $730.85 million booked in 2020. While, for the quarter, revenues closed at $426.05 million (2020: $366.07 million).

Cost of sales totalled $458.95 million (2020: $386.97 million) which resulted in gross profit of $437.12 million (2020: $343.88 million). Gross profit for the quarter amounted to $211.98 million, 32% up from $160.57 million booked in 2020.

Operating expenses for the period under review closed at $212.08 million, 46% higher than $144.77 million booked twelve months earlier.  According to management the growth in expenses “represents the increase in staff costs, advertising expenses, and store operating expenses which were incurred when Mailpac significantly increased its processing capacity” Of this,

• Selling and promotion totaled $34.47 million (2020: $19.50 million) as at June 30, 2021.
• Administrative and general expenses closed at $177.61 million (2020: $125.27 million), reflecting a 42% year over year increase.

As such, operating profit for the six months period summed to $225.04 million (2020: $199.11 million) while for the quarter, operating profit closed at $108.31 million (2020: $91.92 million).

MAILPAC recorded other income of $1.24 million, 88% down from $10.26 million booked in 2020, while finance cost for the six months totaled $27.91 million (2020: $19.63 million), reflecting a 42% increase.

Consequently, Mailpac Limited booked a 5% increase in profit before taxation to $198.37 million (2020: $189.74 million), while for the quarter, profit before taxation closed at $95.01 million (2020: $87.83 million).

No taxes were incurred, as such net profit closed the six months period at $198.37 million (2020: 189.74 million). As for the quarter, net profit totaled $95.01 million (2020: $87.83 million).

Consequently, earnings per share (EPS) was unchanged at $0.08 for the six months ended June 2021 in comparison to June 2020. For the quarter, EPS closed at $0.04 (2020: $0.04). The trailing twelve months EPS amounted to $0.18. The number of shares used in this calculation was 2,500,000,000 shares. MAILPAC traded on August 14, 2021, at $3.82 with a corresponding P/E of 21.14 times.

MAILPAC noted, “We are encouraged by the performance of the Company this quarter as we begin to see the efficiencies enabled by our 2020 investment in expanding our capacity. More specifically, we are now servicing more clients and processing more packages without any increase in fixed costs. This suggests that our business can continue its path of growth more cost efficiently, further increasing our margins and overall profitability.”

Furthermore, “new solutions, we are exploring expansion into new markets and investment into new business lines. One such investment will revolutionize Mailpac Local, enabling the division to offer an unparalleled value proposition to consumers.”

Balance Sheet at a Glance:

As at June 30, 2021, total assets closed at $591.76 million, 4% lower than $616.22 million booked for June 2020. Notably, ‘cash and cash equivalents’ is the main contributor to the decline by amounting to $191.26 million (2020: $276.64 million). The movement was offset be an increase in ‘Property, plant and equipment’ to $77.66 million (2020: $32.97 million) as at June 30, 2021.

Shareholder’s equity declined to $495.09 million from $543.38 million resulting in a book value of $0.20 (2020: $0.22).

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