PURITY reports 42% decline in three months net profit

June 25, 2020

Consolidated Bakeries (Jamaica) Limited (PURITY) for the first quarter ended March 31, 2020 recorded 9% increase in revenues to $299.05 million from $273.63 million reported for the corresponding period in 2019.

Cost of sales for the period rose by 13% to close at $182.38 million (2019: $162.18 million), leading to a gross profit of $116.67 million (2019: $111.44 million) for the three months ended March 31, 2020.

The Company reported total expenses of $104.04 million, a 10% rise when compared to the $94.83 million reported in 2019. Of this, administrative expenses amounted to $55.25 million, up 11% relative to $49.69 million reported in 2019. Selling expenses went up by 8% to close at $40.92 million (2019: $37.79 million), whereas depreciation closed at $7.86 million (2019: $7.48 million).

This resulted in an operating profit of $12.63 million for the three months period compared to an operating profit of $16.48 million documented for the comparable period in 2019.

Interest and other income closed at $6,146 versus $831,254 reported in the previous corresponding period. While, finance cost went by 50% to close at $4.17 million compared to $2.77 million booked twelve months earlier.

Consequently, PURITY recorded a 45% reduction in pretax profit to $8.47 million when compare to pretax profit of $14.54 million booked the same period last year.

No taxes were incurred for the period under review (2019: nil), resulting in a net profit of $8.47 million versus profit of $14.54 million booked twelve months earlier.

Total comprehensive income amounted to $8.05 million (2019: $13.58 million) for the three months ended March 31, 2020.

As a result, earnings per share (EPS) for three months amounted to $0.04 compared to earnings per share (EPS) of $0.07 reported in 2019. The trailing twelve-month LPS is $0.08. The number of shares used in our calculations is 222,709,171 units. PURITY stock last traded on June 25, 2020 at $1.70.

Balance Sheet Highlights:

PURITY, as at March 31, 2020, recorded total assets of $1.04 billion, a slight increase of 1% year over year (2019: $1.03 billion). This increase was attributed mainly to ‘Plant, Property and Equipment’ which closed at $767.16 million (2019: $726.24 million) and went up by $40.92 million or 6% year over year. This was partly tempered by a 47% decrease in ‘Investment’ to $23.30 million (2019: $43.81 million) when compared to the corresponding period last year.

The Company closed the period with Shareholders’ Equity totalling $714.35 million (2019: $733.27 million), which resulted in a book value per share of $3.21 (2019: $3.29).


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.