September 24, 2021

Pulse Investments Limited (PULS), for the year ended June 30, 2021 reported that Revenue increased 19% year on year, closing the year at $807.03 million, up from $678.07 million in 2020, while for the fourth quarter revenue amounted to $276.47 million up 36% compared to the $202.99 million booked in 2020. The Company noted, “The company’s TV production business line was also up significantly as more broadcasters in the Caribbean and North America responded to increased demand for Pulse programming such as the Caribbean Model Search, Caribbean Fashion Weekly and new titles including Pulse World 360.”

Administrative and Other Expenses decreased 3%, closing the year at $383.03 million relative to $395.39 million of last year. This resulted in gross profit increasing by 50%, closing the year at $424.01 million compared to the $282.68 million posted in 2020. For the quarter, however, PULS booked gross profit of $83.36 million compared to a gross loss of $16.95 million documented in the prior comparable period.

Other income amounted to $1.12 billion, an increase of 92% on the $583.67 million recorded for the 2020 financial year.  PULS noted that, “the largest gains were from investment property, mainly from Villa Ronai in Stony Hill , which was acquired by Pulse during the financial year. Both the Ronai and Trafalgar Road properties returned significant appreciation in value, but Ronai also recorded gains as a result of the conversion from a leasehold property to a fully owned Pulse asset. Further, prior year expansion as a result of the completion of the Pulse Suites project at the Stony Hill location, also added to the gains in the value of investment property this year.”

This resulted in an operating profit of $1.55 billion, an increase of 78% relative to the $866.35 million recorded last year. Finance Cost rose by 134%, closing the year at $29.56 million (2020: $12.66 million).

Management noted, “During the year the company obtained new financing of $2.31 billion, with $1.21 billion actually received and a $1.1 billion bond committed for short term debt retirement and construction of the first phase of a planned 30 home development at Villa Ronai. The $1.1 billion bond was arranged and underwritten by Barita Investments Ltd. Funds received earlier in the year, were used to repay a $250 million bond previously arranged by NCB Capital Markets and to acquire the Villa Ronai property from a related party.”

Taxes of $47.66 million (2020: $13.32 million) were deducted for the year subsequent to a pre-tax profit of $1.52 billion (2020: $853.69 million).

Lastly, Net Profit rose by 75%, closing the year at $1.47 billion, up from $840.36 million a year ago, while for the quarter Net Profit totalled $540.99 million relative to $112.19 million reported in 2020, a 382% increase.

Total Comprehensive Income for the year amounted to $1.53 billion relative to the $883.26 million booked in 2020, an uptick of 74%.

Earnings per share amounted to $0.23 for the year relative to $0.13 in 2020. For the quarter, EPS closed at $0.08 (2020: $0.02). The number of shares used in the calculations is 6,522,952,176 units. PULS last traded on  September 24, 2021 at $4.94 with a corresponding P/E of 21.94 times.

PULSE highlighted, “Although down, largely as a result of the impact of COVID 19, the company’s hospitality business has rebounded, with Pulse Rooms at Trafalgar showing fair business. Pulse Suites at Villa Ronai had a very limited operation during the financial year. Pulse remains optimistic regarding its hospitality business as vaccinations are ramped up in Jamaica and the wider world. Pulse’s new real estate initiatives, as well as the funding secured, mark the final phase of the company’s transition to a company with property at its core, allied to a diverse range of business lines, most within the creative industries, where Pulse started life. Its new mantra Leisure, Lifestyle Living!, reflects this unique synergistic mix which includes property development, property sales, property rentals (residental and commercial), guest accommodations, attractions, wedding centre, as well as externally operated spas, restaurants and fitness centre. These will be supported and complemented by Pulse media, fashion and model management.”

Balance Sheet Highlights:

Assets totalled $6.91 billion, a year over year increase of 47% relative to the $4.70 billion booked the year prior. This movement was driven by an increase in ‘Investment Properties’ which closed at $5.06 billion (2020: $3.09 billion) and ‘Advertising Entitlements’ totalling $1.32 billion (2020: $1.05 billion).

Shareholder’s Equity as at June 30, 2021 stood at $5.59 billion (2020: $4.09 billion) resulting in book value per share of $3.43 (2020: $2.51).

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