PURITY reports 31% decline in six months net profits

Date: August 15, 2019


Consolidated Bakeries (Jamaica) Limited (PURITY) recorded a 11% increase in revenue to $548.67 million from $492.54 million reported for the corresponding period in 2018. For the second quarter the company recorded a revenue of $275.03 million (2018: $221.49 million), representing a 24% growth.

Cost of sales for the period rose by 17% to close at $339.28 million (2018: $290.55 million), leading to a gross profit of $209.38 million (2018: $202 million). Within the quarter PURITY recorded cost of sales of $177.94 million, up 31% relative to $136.20 million booked at the end of the second quarter for 2018.  As such, second quarter gross profits totaled $97.09 million, up 14% year over year (2018: $85.29 million).

The company reported total expenses of $189.85 million, a 9% increase when compared to the $174.28 million reported in 2018. Of this, administrative expenses amounted $97.14 million, up 6% relative to the $92.02 million reported in 2018, while, selling expense rose by 16% to close at $77.30 million (2018: $66.92 million). Total expenses for the second quarter amounted to $95.02 million, up 14% year over year from $83.36 million booked in 2018.

This resulted in an operating profit of $19.53 million for the six-month period, compared to $27.71 million for the comparable period in 2018. For the second quarter, operating profit amounted to $2.08 relative to $1.93 million in 2018.

Other income decreased 11% to $1.47 million relative to $1.65 million booked for the comparable period in 2018. For the quarter, other income closed at $642,631 (2018: 603,673), increasing by 6%.

Finance costs decreased by 20% to close at $5.43 million versus $6.76 million twelve months earlier.

Consequently, PURITY recorded pre-tax profit of $15.58 million relative to $22.60 million. Pre-tax profit for the quarter closed at $61,699 compared to a pre-tax loss of $1.02 million in the previous corresponding quarter.

The Company incurred taxes of $1.95 million (2018: $2.83 million) for the period under review, resulting in a net profit of $13.63 million relative to $19.78 million in 2018. For the second quarter, the company booked a tax of $7,712 (2018: $127,512), resulting in a net profit of $53,987 in contrast to a loss of $892,586 for the corresponding quarter in 2018.

As a result, earnings per share (EPS) for the six-months amounted to $0.061 compared to earnings per share (EPS) of $0.089 reported in 2018. For the quarter, the earnings per share totaled $0.0002 relative to a loss-per-share (LPS) of $0.004 in 2018. The twelve-months trailing EPS is $0.03 and the number of shares used in our calculations is 222,709,171 units. PURITY stock last traded on August 15, 2019 at $2.21.

Balance Sheet Highlights:

PURITY, as at June 30, 2019, recorded Total Assets of $999.97 million, an increase of 5% on $948.23 million reported in 2018. The increase was attributed mainly to a 4% growth in ‘Property, Plant and Equipment’ which closed at $732.93 million (2018: $948.23 million). ‘Cash and Cash Equivalents’ also increased 36% to $74.04 million (2018: $54.63 million).

The company closed the period with shareholders’ equity in the amount of $737.59 million, relatively flat when compared with $736.40 million recorded in 2018. As such, the company has a book value per share of $3.31 (2018: $3.31).

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