May 20, 2020

Palace Amusement Company (PAL), for the nine months ended March 31, 2020, reported total revenues of $899.17 million, a 16% increase when compared with the $774.64 million recorded for corresponding period in 2019. Total revenue for the quarter declined 10% to total $229.27 million relative to the $254.55 million recorded for same period in 2019.

 Direct Expenses for the nine months ended March 31, 2020, amounted to $811.41 million a 27% increase when compared with the $638.32 million recorded for the same period in 2019. As such, gross profit for the period amounted to $87.77 million (2019: $136.32 million), a 36% fall when compared to the corresponding period in 2019. Gross loss for the quarter amounted to $6.67 million compared to a gross profit of $37.28 million for the corresponding quarter of 2019.

 Administrative expenses for the nine months decreased 3% to total $139.98 million when compared to $144.42 million recorded for the comparable period in the prior year. Other operating income for the nine months increased 229% to total $6.25 million relative to the $1.90 million booked in same period for 2019. Notably, PAL reported ‘Non-operating income’ of $46.73 million for the nine months ended March 31, 2019 in contrast to nil for the same period ended March 31, 2020.

 Consequently, operating loss for the nine months period amounted to $45.97 million, relative to an operating profit of $40.52 million in 2019. For the quarter, operating loss totalled $48 million relative to an operating profit of $44.17 million booked in 2019.

 For the nine months period, finance costs rose 135% to $3.10 million relative to the $1.32 million recorded in 2019. There was no taxation charge for the nine months ended March 31, 2020 relative to $9,000 reported for the comparable period of the prior year.

 As a result, net loss for the nine months ended March 31, 2020 amounted to $49.07 million when compared with a net profit of $39.19 million recorded for the corresponding period for 2019. For the quarter, net loss amounted to $49.22 million, compared with a net profit of $43.74 million recorded for the same quarter in 2019.

 Consequently, net loss attributable to shareholders for the nine months period amounted to $49.23 million, versus the net profit attributable to shareholders of $51.27 million for the comparable period in 2019. For the quarter, net loss attributable to shareholders amounted to $49.32 million relative to a net profit attributable to shareholders of $55.87 million for the third quarter of 2019.

 Total comprehensive loss for the nine months ended March 31, 2020 amounted to $53.28 million compared to a total comprehensive income of $44.27 million for the corresponding period in 2019.

 Loss per share (LPS) for the quarter totalled $34.32 relative to an earnings per share (EPS) of $38.88 in 2019. For the nine months ended March 31, 2020, the Company recorded a LPS of $34.25 relative to an EPS of $35.68 for the comparable period in 2019. The twelve-month trailing LPS is $12.57. The number of shares used in our calculations is 1,437,028 units. Notably, the stock price for PAL closed the trading period on May 19, 2020 at JMD $1,473.94.

 Balance Sheet Highlights:

 As at March 31, 2020 the Company reported total assets of $715.51 million, a 16% increase when compared to $616.80 million in the prior year. This increase in assets was primarily due to an 81% increase in ‘Property, plant and equipment’ to total $542.73 million (2019: $299.38 million) but was tempered by a 71% decline in ‘Investments’ to $31.81 million (2019: $110.37 million).

 Shareholders’ Equity as at March 31, 2020 was $445.57 million compared to $475.80 million for the prior year. This resulted in a book value per share of $310.06 compared to $331.10 booked a year ago.

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.