MEEG booked 37.46% increase in first quarter net profits

 

March 20, 2018 

Main Event Entertainment Group Limited (MEEG) for the three months ended January 31, 2018 recorded a total of $361.41 million in revenue compared to $332.82 million booked for the comparable period in 2016. The growth according to the Company, “was driven by expansions in core business of entertainment and promotions, with increased opportunities coming from our major clients and with the increased revenue opportunities from our growing rental and decor equipment base. Revenues from audio, multimedia and digital signage were average this quarter.”

Cost of sales for the period increased marginally by 0.05% year over year to $200.93 million relative to $200.83 million recorded for the comparable period in 2016. As such, gross profit for the three months improved by 21.59% to $160.48 million (2016: $131.99 million). Management noted, “Average performance in audio, multimedia and digital signage have had a negative impact on the gross margins; which have narrowed to 44% from 50% in the previous quarter ending October 31,2017.”

MEEG booked other income of $1.87 million for the period, compared to the $186,000 documented for the prior year’s corresponding period.  The Company noted this was, “realized on short term deposits this quarter; which is not expected to recur at this high level.”

Total expenses rose 20.42% to $125.96 million versus $104.61 million recorded for the same quarter ended January 2017. Of this, administrative and general expenses climbed 12.72% to $97.30million (2016: $86.32 million), while depreciation expense increased 39.95% to $20.90 million (2016: $14.93 million). Selling and promotion expense recorded a gross increase of 131.74% to $7.77 million relative to $3.35 million. The main contributing elements to the increase according to MEEG were, “depreciation charges, marketing expenses, staff costs and transportation expenses.”

Consequently, operating profit for the period amounted to $36.38 million (2016: $27.57 million), an increase of 31.97% year over year.

Finance cost declined 15.70% for the period to close at $3.41 million from $4.05 million booked last year. Management noted this was, “due to continuing debt service, and reductions in interest rates and service changes.”

Consequently, MEEG’s net profit for the period improved 37.46% or $8.81 million to $32.34 million (2016: $23.53 million).

Earnings per share (EPS) for the three months totaled $0.11 (2016: $0.08).The trailing EPS amounted to $0.37. The number of shares used in the calculation was 300,005,000 units. Notably, MEEG’s stock price closed the trading period on March 19, 2018 at a price of $6.00.

 Balance Sheet Highlights:

As at January 31, 2018, the company’s assets totaled $755.32 million, $121.36 million more than its value a year ago of $633.96 million. This increase in total assets was largely driven by increases in ‘Property, Plant and Equipment’ which rose 13.37% or $51.23 million year over year to $434.42 million (2016: $383.19 million).

Equity attributable to stockholders of the company amounted to $479.30 million (2016: $265.76 million). This translated to a book value per share of $1.60 relative to $0.89 in 2016.

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.

2018-03-20T18:59:07+00:00