May 12, 2022
Stationery and Office Supplies Limited (SOS) for the three months ended March 31, 2022 reported revenues of $427.62 million relative to the $313.32 million booked in same period in 2021, reflecting a 36% increase. The company stated, “these record sales were as a result of increases in revenues in almost every category including SEEK increasing from $10.3M – $18.5M, chair sales increasing by 35%, document destruction services increasing by 60%, as well as our IMAGE & TORCH furniture lines increasing by 50%. These increases are a direct result of planning and having the additional inventory on hand to be able to supply the market and not have to rely upon shipping schedules that continue to change on a regular basis.”
The Company’s cost of sales totaled $209.82 million, up 46% relative to the $143.71 million reported in 2021. Notwithstanding, gross profit rose by 28% for the three months amounting to $217.81 million relative to $169.61 million booked in the previous corresponding period.
Other income rose to close the period at $537,890 versus $1,986 reported in the same period last year.
Administrative and general expenses totaled $97.19 million, up from the $80.58 million documented in the prior comparable period. Selling and promotional expenses grew by 36% to close at $28.71 million (2021: $21.07 million). SOS noted that, “Expenses for the quarter showed a significant increase of 19% as the staff was rewarded with a salary increase for their hard work and dedication over the past 2 years. In addition, there was a corresponding increase in payment of sales commissions due to higher sales revenues.”
The Company’s depreciation cost amounted to $8.27 million, a marginal increase of 0.3% relative to the $8.25 million recorded in 2021. Resulting in an operating profit of $84.17 million, 41% up from $59.72 million booked for the corresponding quarter.
Loss on foreign exchange increased closing the period under review at $35,515 (2021: $2.15 million), while finance cost closed at $2.62 million (2021: $2.47 million).
No finance income was reported for the quarter under review versus $247,707 booked in the corresponding period last year.
Profit before taxes went up by 90% to $104.89 million versus $55.34 million earned in 2021. No taxes were incurred, as such net profit for the period totaled $104.89 million (2021: $55.34 million)
Earnings per share for the period amounted to $0.42 (2021: $0.22). The twelve-month trailing EPS amounted to $0.63. The number of shares used in the calculation was 250,120,500. As May 12, 2022, the stock traded at $8.73 with a corresponding P/E of 13.94 times.
Balance Sheet Highlights:
As at March 31, 2022, total assets increased by 9% to close at $1.02 billion from $941.25 million twelve months earlier. The increase in total assets was primarily driven by an increase in ‘Trade and other receivables’ and ‘Inventories’ which closed at $136.86 million (2021: $124.16 million) and $338.18 million (2021: $244.80 million), respectively. This was tempered by ‘Property, plant and equipment’ which contracted by 6% to close at $380.37 million (2021: $402.84 million) for the period under review.
Equity attributable to stockholders of the Company as at March 31, 2022 stood at $781.72 million (2021: $665.07 million). This translated in a book value per share of $3.13 (2021: $2.66).
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 affect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.