Date: April 01, 2019

Stanley Motta Limited (SML) for the year ended December 31, 2018, booked a 273% increase in revenue to total $269.76 million compared to $72.26 million for the same period in 2017. For the quarter, revenue increased 231% to $97.56 million in 2018 compared to $29.52 million the previous year. SML indicated that, “this was due to income from Unit 4 which was completed in 2018, and the acquisition of Unity Capital which owns what is now called Unit 5 and therefore increased square footage available to rent.”

Administrative expenses amounted to $113.21 million (2017: $56.22 million), for the quarter, administrative expenses rose 15% closing at $31.95 million (2017: $27.86 million). The company stated that, “this was due mainly to $21m in commission payments in regard to the lease for Unit 4 and legal expenses, advertising and consulting expenses which will not be necessary going forward.” Whereas, other operating income totalled $37,000 (2017: $1.53 million), for the quarter operating income closed the period at $24,000 (2017: $1.53 million).

This translated into operating profit surging to $156.59 million when compared to last period’s $17.57 million. For the quarter, operating profit closed the period at $65.63 million relative to an operating profit of $3.18 million in the prior corresponding quarter.

Finance costs of $59.22 million (2017: $7.45 million) was recorded, while revaluation gain on investment property of $1.90 billion (2017: $843.55 million) was booked. For the quarter, finance cost and revaluation gain on investment property closed the period at $21.81 million (2017: $7.45 million) and $290.03 million (2017: $843.55 million) respectively. SML noted that, “ Finance costs increased over prior year since now the entire DBJ loan is subject to payment whereas a moratorium on interest and principal payments existed in 2017. Additionally, the figures include the finance costs for the mortgage on Unit 5, the Unity Capital building.” As for the revaluation gain on investment property, management indicated that, “A valuation was done on Unit 4 dated September 30th 2018 and on all other units dated December 31 2018 by accredited valuers. This accounts for the J$2.2 billion in revaluation gain on the investment property in 2018.”

Profit before tax soared to $1.99 billion for the year ended December 31, 2018 relative to $853.67 million in 2017. As for the quarter, profit before tax closed the period at $333.85 million versus $839.28 million in the prior comparable quarter.

Net profit for the period totalled $1.99 billion (2017: $853.61 million), while for the quarter net profit of $331.74 million (2017: $839.22 million) was recorded.

Earnings per share (EPS) for the period totalled $2.64 (2017: $1.13). EPS for the quarter amounted to $0.44 (2017: $1.11). The number of shares used in our calculations amounted to 757,828,490 units. SML’s stock price closed the trading period on March 29, 2019 at $4.50.

Balance Sheet at a glance:

As at December 31, 2018, total assets amounted to $4.83 billion, up from $2.42 billion in 2017. The increase in total assets was as a result of the increase in ‘Investment Property’ which advanced from $2.35 billion in 2017 to $4.69 billion in 2018. ‘Cash and Cash Equivalents’ also reported growth closing at $92.60 million (2017: $2.23 million).

Shareholders’ Equity of $3.89 billion was reported (2017: $1.61 billion) which resulted in a book value per share of $5.14 (2017: $2.12).

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.