May 1, 2020
In United States dollars (except where it is indicated otherwise):
Margaritaville Turks Limited (MTL), for the nine months ended February 29, 2020, reported revenues of $5.82 million versus $5.52 million in the prior corresponding period, a 5% increase. However, for the third quarter, revenues marginally declined by 0.17% to $1.958 million (2019: $1.961 million). Management stated that, for the quarter this was earned “ from the 304,190 passengers that cruised into the port at a spend rate per passenger of US$6.44 versus 296,318 passengers in the similar period in the prior year at a spend rate of US$6.62 per passenger.” Moreover, for the nine months ended February 2020, “revenue was earned from the 842,529 passengers that cruised into the port, spending an average of US$6.91 each compared to 827,320 passengers at a spend rate of US$6.67 the prior year.”
Cost of sales increased by 2% for the period to $1.46 million (2019: $1.44 million), while for the quarter there was a 2% decrease to $493,644 (2019: $504,892). MTL noted that cost of sales margin has been down due to, “improved scheduling and logistics planning. This means reduced reliance on locally available ingredients that are usually priced higher. All other categories were in line with prior year or increased in line with the revenue increase.”
As a result, gross profit, for the nine months period, grew 7% year-on-year to $4.36 million compared to $4.08 million for the nine months ended February 2019. Gross profit for the third quarter closed at $1.464 million (2019: $1.456 million).
Total expenses increased by 6% for the period under review to $3.74 million (2019: $3.52 million). This increase was associated with a 7% uptick in administrative expense to $3.34 million compared to $3.11 million reported in the previous comparable period. Notably, this was offset by an 8% reduction in promotional expenses which closed at $44,588 from $48,580 reported in February 2019. Depreciation and amortization expense closed the nine months period at $169,692 (2019: $171,120). Whereas, for the quarter, total expenses closed at $1.29 million (2019: $1.29 million).
Consequently, operating profit within the nine months grew by 10% to $617,832 (2019: $564,067). Operating profit for the third quarter totaled $172,520 versus $166,750 reported in the prior corresponding period.
Profit for the nine months amounted to $617,832 (2019: $563,731), while for the quarter MTL’s profit closed at $172,520 relative to $166,750 in the previous comparable quarter.
The nine-months earnings per share was $0.0092 (2019: $0.0084), while the EPS for the quarter amounted to $0.0026 compared to $0.0025 for the corresponding quarter of 2019. The twelve months earnings per share amounted to $0.012. The number of shares used in our calculations was 67,500,000. MTL closed the trading period on May 1, 2020 at US$0.19.
Management noted, “Since the end of the reporting period in February the COVID-19 developed into a pandemic that has crippled the entire Cruise industry. It is too early to estimate the resumption of cruising and business on the Port.”
Balance Sheet Highlights:
The Company, as at February 29, 2020, recorded total assets of $6.09 million versus $5.31 million in 2019, a 15% increase. This was due to a 63% increase in ‘Owing by related companies’ which closed at $1.322 million (2019: $812,632). ‘Inventories’ also contributed to the increase amounting $1.03 million (2019: $885,859).
Total Shareholders’ Equity as at February 2020 closed at $5 million (2019: $4.34 million), which resulted in a book value of $0.074 (2019: $0.064).
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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.