MEEG reports 122% increase in first quarter net profit

Date: March 16, 2020

Main Events Entertainment Group, for the three months ended January 2020, reported revenues of $598.14 million, 31% higher than the $457.69 million booked in 2019. Management attributed the performance to, “strong growth in all areas of our business.”

Cost of Sales increased 25% to close at $325.46 million (2019: $260.57 million), This resulted in gross profit increasing by 38%, amounting to $272.68 million for the period relative to $197.12 million in 2019. The Company noted that, “during the quarter, we advanced our margin re-alignment project activities. We have made solid progress toward achieving the vison we have laid out for job efficiencies and process improvements.”

Other income for the quarter, surged by 104% to close at $306,000 (2019: $150,000).

Total expenses amounted to $197.27 million (2019: $161.86 million) for the period under review, a 22% increase when compared to the prior year. Of that, administrative and other expenses rose by 24%, moving from $130 million in 2019 to $161.62 million. Selling and promotions fell 29% to $4.22 million from $5.96 million reported in 2019. Depreciation rose 21% to total $31.43 million for the period (2019: $25.91 million). Management noted that, “more material increases came from depreciation charges from the material capital investments in previous periods, salaries and related costs, transportation expenses and general office expenses. Cost savings were realized in legal and professional fees and advertising and promotions.”

As such, operating profit increased by 114% from $35.41 million in 2019 to $75.72 million. Finance costs increased by 15% to close the period at $4.37 million (2019: $3.80 million).

Profit before taxation increased by 126% to close the period at $71.35 million (2019: $31.60 million). Notably, MEEG incurred no taxes of $1.34 million (2019: nil). Thus net profit amounted to $70.01 million (2019: $31.60 million).

Consequently, earnings per share (EPS) for the quarter amounted to $0.23 compared with $0.11 for the corresponding period of last year. The trailing twelve months earnings per share amounted to $0.45.  The numbers of shares used in the calculations are 300,005,000 units. Notably, MEEG stock price close the trading period on March 13, 2020 at $4.25.

Balance Sheet at a glance:-

Main Events total assets base as at January 2020 closed at $1.05 billion relative to $926.92 million a year prior. The increase in total assets was largely due to an increase in ‘Property Plant and Equipment by $108.22 million to total $652.80 million (2019: $544.59 million). Also, ‘Cash and Bank Balances’ contributed to the increase closing at $107.55 million (2019: $64.95 million).

Equity attributable to stockholders of parent amounted to $648.85 million (2019: $554.59 million) with book value per share amounting to $2.16 (2019: $1.85).

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.