SML reports 418% increase in six months net profit

Date: August 13, 2019

Stanley Motta Limited (SML) for the six months ended June 30, 2019, booked a 118% increase in revenue to total $205.42 million compared to $94.18 million for the same period in 2018. For the quarter, revenue increased 105% to $108.55 million in 2019 compared to $53.03 million the previous year. SML indicated that, “this was due to increased rental space.”

Administrative expenses amounted to $66.44 million (2018: $47.48 million), for the quarter, administrative expenses rose 56% closing at $49.34 million (2018: $31.54 million). The company stated that this was “due mainly to foreign exchange loss of J$19.5 M on the revaluation of the long term loan, together with cost of printing the annual report. Without the foreign exchange loss administration expenses would have been in line with expectation” Whereas, other operating income totalled $53,000 (2018: $10,000), for the quarter operating income closed the period at $36,000 (2018: $10,000).

This translated into operating profit surging to $139.03 million when compared to last period’s $46.70 million. For the quarter, operating profit closed the period at $59.25 million relative to an operating profit of $21.48 million in the prior corresponding quarter.

Finance costs of $22.70 million (2018: $24.48 million) was booked for the period, a 7% decline year on year. As such, profit before tax amounted to $116.33 billion for the period relative to $22.22 million in 2018. As for the quarter, profit before tax closed the period at $46.39 million versus $11.54 million in the prior comparable quarter.

Net profit for the period totalled $115.15 billion (2018: $22.22 million) following taxation of $1.18 million (2018: nil), while for the quarter, net profit of $46.39 million (2018: $11.54 million) was recorded. Management noted, “Again, without the J$19m foreign exchange loss, YTD would have shown a profit of J$134.m compared to J$22m for the same period prior year.

Earnings per share (EPS) for the period totalled $0.15 (2018: $0.03) while EPS for the quarter amounted to $0.06 (2018: $0.02). The twelve months trailing EPS amounted to $2.76. The number of shares used in our calculations amounted to 757,828,490 units. SML’s stock price closed the trading period on August 12, 2019 at $5.09.

Balance Sheet at a glance:

As at June 30, 2019, total assets amounted to $4.81 billion, up from $2.80 billion in 2018. The increase in total assets was as a result of the increase in ‘Investment Property’ which advanced from $2.68 billion in 2017 to $4.72 billion in 2019. ‘Cash and Cash Equivalents’ also reported growth closing at $47.09 million (2018: $39.65 million).

Shareholders’ Equity of $3.93 billion was reported (2018: $1.93 billion) which resulted in a book value per share of $5.18 (2017: $2.54).

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.