August 10, 2021
Stationery and Office Supplies Limited (SOS) reported six months revenue of $550.87 million relative to $472.12 million reported in 2020, a 17% increase year over year. While for the second quarter revenues amounted to $237.56 million up 76% compared to the $135.21 million reported in the corresponding quarter of 2020.
The Company’s cost of sales totalled $260.75 million up 7% relative to the $244.36 million reported in 2020. Nevertheless, gross profit rose by 27% for the six months amounting to $290.12 million relative to the $227.76 million booked in 2020, while gross profit for the quarter totalled $120.51 million (2020: $62.55 million).
Administrative expenses totalled $162.91 million up 16% compared to the $140.90 million booked in 2020, while selling and promotion expenses grew by 13% closing the period at $43.04 million relative to the $37.93 million reported in 2020. For the quarter, administrative expenses went up by 50% to $82.32 million (2020: $54.84 million), while selling and promotion expenses closed at $21.97 million (2020: $14.62 million), a 50% increase year over year.
The Company’s depreciation cost for the six months ended June 30, 2021, amounted to $16.46 million, a decrease of 7% relative to the $17.76 million incurred in 2020, while finance cost closed at $6 million (2020: $6.85 million).
Loss on foreign exchange amounted to $3.87 million (2020: $4.77 million). No profit on disposal of property plant and equipment was reported, relative to the $3.34 million reported twelve months earlier. Furthermore, no gain on investment was reported relative to a loss of $1.19 million reported for the corresponding six months in 2020.
There was no taxation booked for the six months ended June 30, 2021. As such, net profit rose by 168% amounting to $58.43 million relative to the $21.83 million earned in 2020. For the quarter, there was a net profit of $3.09 million relative to a net loss of $21.97 million in 2020. SOS stated that, “History has shown that SOS’s 2nd quarter is normally the slowest period during the year but even though we continue to suffer through the Covid-19 virus and all of the issues that come along with it, SOS was able to post a profit, with significant improvements compared to the 2nd quarter of 2020.”
Earnings per share for the period amounted to $0.23 (2020 EPS: $0.09), while EPS for the quarter totalled $0.01 (2020 LPS: $0.09). The twelve-month trailing EPS amounted to $0.28. As at August 09, 2021, the stock traded at $6.01 with a corresponding P/E ratio of 21.57 times.
Balance Sheet Highlights:
Total Assets rose by 4% to close at $920.77 million as at June 30, 2021 from $889.56 million the year prior. The growth stemmed from 109% growth in ‘Prepayments’ to $38.14 million (2020: $18.25 million). ‘Trade and other receivables’ also contributed to the increase to close at $102.04 million relative to $89.93 million recorded twelve months earlier.
Equity attributable to stockholders of the company as at June 30, 2021 stood at $668.16 million (2020: $618.48 million). This resulted in a book value per share of $2.67 (2020: $2.47).
Disclaimer:
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.