February 11, 2022
Tropical Battery Company Limited (TROPICAL) for the year ended December 31, 2021 recorded revenue in the amount of $661.94 million (2020: $450.99 million), 47% increase when compared to 2020. TROPICAL noted, “This increase of $211 million was achieved through an increase in balanced inventory arrivals, and a tremendous effort on the part of our sales team to surpass targets by bringing in new customers.”
Cost of sales amounted to $465.59 million, which represents a 48% increase in comparison to the $314.70 million booked in the previous year. Consequently, gross profit amounted to $196.35 million, 44% up from $136.29 million reported the prior year. Management stated that, “The gross profit margin was 29.7% of total revenue for the quarter, slightly lower than the 30.2% margin registered in the same quarter last year. The lower gross profit margin is attributable to the number of sales promotions launched in December as the economy rebounded thanks to the relaxing of restrictions on business activities relative to the previous year.”
Administrative, marketing and selling expenses rose by 10% to close at $114.47 million versus $103.68 million reported in 2020. Operating profit for the period totalled $81.89 million (2020: $32.61 million). Other operating income for the period amounted to $2.58 million, this represents a 14% decline relative to the $3.02 million booked the previous year.
Finance costs increase year over year by 13% to a total of $15.31 million (2020: $13.56 million), while financial income closed the period at $3.63 million (2020: $5.97 million). In addition, Depreciation closed at $16.14 million (2020: $9 million).
As such, profit before tax closed at $56.66 million for 2021, a 198% increase from the $19.04 million booked last year. No taxes were reported for the period under review hence net profit for the three months closed at $56.66 million (2020: $19.04 million).
Earnings per share (EPS) for the first quarter amounted to $0.044 versus an EPS of $0.015 for 2020. The trailing twelve months EPS was $0.097. The number of shares used in our calculations amounted to 1,300,000,000 units. TROPICAL closed the trading period on February 10, 2022 at $1.21 with a corresponding P/E of 12.49 times.
TROPICAL noted, “With our more-than-adequate levels of inventory, we see a bright year ahead. We are also currently expanding our top-selling retail store, located on Grove Road, just off Half Way Tree Road in Kingston, which will allow us to increase sales at this location even further, and achieve higher profitability, given that retail margins are better than our wholesale margins while offering greater comfort and convenience for our team members and customers with a substantial increase in square footage. We plan to increase our retail presence island-wide in the coming quarters.”
Balance Sheet Highlights:
As at December 31, 2021 total assets amounted to $2.03 billion (2020: $1.57 billion). Largest contributors to the assets base are ‘Inventories’ which closed at $873.34 million (2020: $433.67 million) and ‘Accounts receivable’ which closed at $396.36 million (2020: $290.40 million).
Shareholder’s Equity as at December 31, 2021 totalled $882.53 million (2020: $754.09 million) resulting in a book value per share of $0.68 (2020: $0.58).
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.