November 14, 2023

The Consolidated Bakeries (Jamaica) Limited (PURITY) for the nine months ended September 30, 2023 reported a 12% increase in Revenue totaling $1.17 billion compared to $1.04 billion in the corresponding period last year. Revenue for the third quarter rose 7% to close at $344.46 million compared to $322.81 million for the comparable quarter of 2022.

Cost of Sales amounted to $725.39 million (2022: 637.07 million), this represents a increase of 14% year over year. Consequently, gross profit increased by 10% to $445.40 million compared to $405.75 million for the nine months ended September 30, 2022. The Company booked gross profit of $134.14 million for the third quarter versus $116.43 million reported for the similar quarter of 2022.

Selling Expense climbed 22% to close at $185.28 million (2022: $152.46 million), while Admin Exp increased by 2% from $200.41 million in 2022 to $203.49 million for the period under review. As a result, total expenses for the nine months ended September 30, 2023 amounted to $418.41 million, a 10% uptick relative to $379.01 million reported in 2022.

Operating Profit for the nine months ended September 30, 2023, amounted to $26.99 million, a 1% increase relative to $26.75 million reported in 2022. Operating Loss for the third quarter amounted to $8.43 million (2022: $10.91 million). Finance Cost year to date totalled $13.68 million (2022: $13.03 million), a 5% increase from the corresponding period last year. 

Pre-tax profit for the nine months ended September 30, 2023, amounted to $15.35 million, 1% less relative to $15.43 million reported in 2022. Pre-tax loss for the third quarter amounted to $11.99 million (2022: $14.49 million).

There was no taxation for the nine months ended September 30, 2023. Net Profit for the nine months amounted to $12.33 million, a 20% contraction from the $15.43 million reported in 2022. For the third quarter, Net Loss was $12.43 million (2022 Net loss: $14.49 million).

Consequently, Earnings Per Share for the nine months amounted to $0.06 (2022: EPS: $0.07), while Loss Per Share for the quarter totaled $0.06 (2022: LPS: $0.07). The twelve month trailing EPS was $0.05 and the number of shares used in these calculations was 222,709,171.

Notably, PURITY’s stock price closed the trading period on November 13, 2023 at a price of $2.12 with a corresponding P/E ratio of 43.79x.

Balance Sheet Highlights

PURITY, as at September 30, 2023, recorded Total Assets of $1.12 billion, an increase of 5% year over year when compared to $1.07 billion booked last year. The increase was attributed mainly to a 26% increase in ‘Accounts Receivables’ which closed at $135.72 million (2022: $108.08 million).

Shareholder’s equity was $709.65 million (2022: $698.52 million), representing a book value per share of $3.19 (2022: $3.14).

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 affect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.