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).

Analyst Certification -This research report is for information purposes only and should not be construed as a recommendation. 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.

2019-08-15T20:50:39-05:00