August 15, 2023

Medical Disposables and Supplies Limited (MDS) for the first quarter ended June 30, 2023, reported a 4% increase in revenue totalling $925.51 million compared to $892.43 million in the corresponding three months last year.

MDS highlighted, “All three major sales divisions, namely Pharmaceutical, Medical and Consumer Goods experienced sales growth, with the Medical Division recording a 34% increase year-on-year due to a combination of normality in the supply chain as well as specific initiatives to reduce high levels of inventory arising from advanced purchase arrangements to mitigate supply chain issues at the time.”

Cost of Sales amounted to $690.84 million (2022: $662.99 million), this represents an increase of 4% year over year. Consequently, gross profit increased by 2% to $234.67 million compared to $229.45 million for the first quarter ended June 30, 2022.

Administrative expenses increased by 23% to close at $130.96 million (2022: $106.48 million), while Selling and promotional costs decreased by 6% from $75.17 million in 2022 to $70.40 million for the three months. Depreciation rose 24% year over year to close at $10.51 million relative to $8.46 million in 2022. As a result, Total Operating Costs for the first quarter amounted to $209.23 million, a 12% increase relative to $187.55 million reported in 2022.

The Company noted, “Total operating expenses increased by $24.6M year-on-year due to on-boarding of key talent in our Medical and Consumer Divisions to drive growth and product visibility which is reflected in the strong performances of both divisions. Additionally, other roles were recruited to 2 strengthen our control environment and promote operational efficiencies for which the benefits accruing to MDS will manifest during the course of FY2024.”

Operating Profit for the three months amounted to $25.44 million, a 39% decline relative to $41.90 million reported in 2022.

Finance income totalled $91,686, a 90% decrease from the corresponding period last year. (2022: $914,744), while Finance cost for the first quarter ended June 30, 2023, amounted to $26.53 million, a 25% increase relative to $21.23 million reported in 2022.

Loss before tax for the three months totalled $1.68 million (2022 profit before tax: $19.84 million). Income tax credit for the three months amounted to $181,742 (Tax charge 2022: $3.30 million). Net Loss for the year for the three months amounted to $1.50 million, relative to net profit of $16.54 million reported in 2022.

Consequently, Loss Per Share for the three months amounted to $0.01 (2022: EPS: $0.06). The twelve-month trailing EPS was $0.21, and the number of shares used in these calculations was 263,157,895.

Notably, MDS’s stock price closed the trading period on August 14, 2023, at a price of $4.54 with a corresponding P/E ratio of 19.22x.

Balance Sheet Highlights

The company’s assets totalled $2.91 billion (2022: $2.89 billion). The increase in assets resulted mainly from a $87.70 million increase in Inventories, totalling $1.42 billion.

Shareholder’s equity was $1.06 billion (2022: $987.88 million), representing a book value per share of $4.03 (2022: $3.75).

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