May 09, 2022
Spur Tree Spices Jamaica Limited (SPURTREE) for the year ended December 31, 2021, reported a 23% increase in sales revenue to $859.72 million from the $700.66 million reported in 2020. In their first quarter of 2022, which ended on March 31, 2022, SPURTREE reported a 41% increase in sales revenue to $237.13 million from the $168.48 million reported in 2021. In their quarterly report, the company stated, “Our strong performance in revenue growth demonstrates the company’s push to expand its reach in export markets and the strength of the brand among its loyal customers.”
Cost of sales rose by 12% in FY21 to $577.42 million (2020: $513.69 million). Gross profit increased year-on-year by 51% from $186.97 million in 2020 to $282.30 million in 2021. Cost of sales grew by 26% in Q1 of FY22 to $148.09 million (2021: $117.83 million). Gross profit increased year-on-year for the three-month period by 76%, from $50.64 million in 2021 to $89.04 million in 2022.
Administrative and other expenses rose by 56% to $142.26 million, up from the $90.94 million recorded a year prior. In Q1 of FY 2022 Administrative & other expenses grew by 38% to $37.68 million, up from $27.36 million booked in Q1 of FY 2021.
Operating Profit for the year grew by 43% to $140.27 million (2020: $98.15 million) while in the new quarter, operating profit rose to $52.14 million (2021: $25.74 million).
Finance costs amounted to $16.12 million in FY21 (2020: $16.47 million) while in the first quarter of FY22, SPURTREE had recorded $1.13 million in finance costs. In Q1 of FY21 the company paid $3.34 million in finance costs.
At the end of the financial year December 2021, SPURTREE reported a Net profit of $91.32 million relative to $69.65 million recorded for the corresponding period in 2020. While for the three months ended March 31, 2022, SPURTREE reported a Net profit of $50.81 million for the relative to $17.30 million recorded for the corresponding period in 2021
Earnings per share (EPS) for the year ended totaled $0.07 cents relative to $0.05 cents per share in 2020. While EPS for the three months ended March 31, 2022 totaled $0.03 relative to $0.01 per share in 2021. The number of shares used in the calculation was 1,676,959,244 units. Notably, SPURTREE’s stock price closed the trading period on May 6, 2022 at a price of J$3.97 with a corresponding P/E ratio of 53.63 times.
Management noted that, “The company is working on several strategic priorities focused on growing revenue and containing costs. We expect to realize the full financial benefits of most of these initiatives sometime in the third quarter and beyond. These initiatives include expansion of production capacity in both companies, Spur Tree Spices and Exotic Products, to meet increased demand for existing products, and the introduction of new items under the Spur Tree brand, as we continue our transition from a spices and sauce provider to a full-blown food company.” Additionally, “We have also begun work to expand our footprint in the local market with special emphasis on the food service segment. As we look forward in the coming months, we will continue to prioritize this initiative, not only as an important element of our revenue growth strategy, but also as a part of our risk mitigation approach in building more diverse revenue streams,” as mentioned by the Company.
Balance Sheet Highlights:
The Company, at December 31, 2021, had total assets worth $596.68 million (2020: $402.37 million). This was primarily due to ‘Property, plant, and equipment’ which increased by 111% to $173.36 million (2020: $81.98 million). As at March 31, 2022, SPURTREE had total assets valuing $776.91 million on their balance sheet (2021: $388.04 million)
Total Stockholders’ Equity as at December 31, 2021, closed at $411.26 million (2020: $182.44 million). This translated into a book value per share of $0.245 (2020: $0.109). Total Stockholders’ Equity as at March 31, 2022, closed at $671.89 million (2021: $199.74 million). Retained Earnings rose 69% to $304.77 million from $179.95 million in 2021. As at March 31, 2022, SPURTREE had a book value of $0.40 (2021: $0.12).
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.