Date: August 02, 2018
Grace Kennedy Limited (GK), for the six months ended June 30, 2018, recorded revenue of $48.37 billion for period (2017: $46.37 billion), a year over year increase of 4%. Revenue for the second quarter of 2018 improved 3% to $23.46 billion (2017: $21.73 million). The biggest contributor to the group’s overall revenue for the six month period came from the ‘Food Trading’ segment which contributed a total of $38.37 billion (2017: $36.29 billion), an increase of 6% relative to the prior year’s corresponding period. Management noted, “this segment showed growth in revenue, primarily due to improved performance in our Jamaican foods.” Notably, GraceKennedy Foods (USA) LLC realized strong growth in sales our existing Grace-branded products led by Grace Tropical Rhythms and of our new products. Grace Patties continue to show significant growth in sales in their distribution channels. The company’s relationship with key chain stores further strengthened through increased sales and product listings. The other segments contributing to revenue are as follows:
o ‘Banking & Investments’ declined 3% year over year to total $2.90 billion (2017: $2.98 billion). GK indicated that, “While, First Global Bank Limited’s (FGB) performance was impacted by the reduction in the bank’s portfolio, the outlook for loan growth is positive based on FGB’S current pipeline of loans and enhancements to our loan process such as improved turnaround time. FGB, opened its fourth satellite location in Hopewell, Hanover, Jamaica under the First Global Money link brand.”
o “Revenue from ‘Insurance’ amounted to $3.33 billion, a year over year increase of 9% over last year’s corresponding period of $3.05 billion. “The increase in profitability was led largely by the performance of GK Insurance. The company’s result was positively impacted by growth within the motor, property and engineering portfolios.”
o ‘Money Services’ brought in $3.76 billion, 7% less than the $4.05 billion reported in June 2017. This was due in part to a reduction in transaction volumes in the remittance business.
Total Expenses amounted to $46.93 billion relative to $44.50 billion booked for the previous quarter, indicating a 5% growth compared to twelve months earlier. Expenses for the second quarter amounted to $22.73 billion, up from $21.73 billion for the second quarter of 2017. As such, gross profit for the six month amounted to $1.44 billion relative to $1.88 billion booked for the similar period of 2017. Gross profit for the second quarter slipped 24% to $724.17 million compared to $956.15 million reported for the second quarter of 2017.
Other Income during the first six month ended June 30, 2018, grew 61% to total $1.43 billion (2017: $903.88 million).
Interest income from non-financial services rose 14% to total $213.32 million compared to $187.37 million reported in the prior year’s corresponding period. Interest expenses from non-financial services amounted to $285.74 million versus $334.45 million a year earlier, a 15% reduction.
Share of results of associated companies fell by 10% amounting to $287.33 million, versus $320.22 million reported for June 2017.
Pre-tax profits increased 5% to approximately $3.10 billion, compared to pre-tax profit of $2.95 billion documented for the first six month of 2017. Additionally, GK incurred taxation expenses amounting to approximately $651.52 million compared to $767.64 million in June 2017.
Consequently, net profit climbed 12% to $2.45 billion from $2.18 billion booked for the first six months of 2018. Net profit for the second quarter improved 9% to $1.14 billion (2017: $1.04 billion).
Net Profits attributable to shareholders amounted to $2.15 billion compared to $1.90 billion in the previous year’s corresponding period, showing a 14% increase. Net profit attributable to shareholders for the second quarter amounted to $959.31 million, up from the $880.99 million booked for the same quarter of 2017. Earnings per share for second quarter amounted to $0.96 (2017: $0.89), while for the six months GK booked an EPS of $2.16 (2017: $1.90). GK’s tailing EPS amounted to $4.40. The number of shares used in our calculations is 994,886,892 units. GK’s stock price close the trading period on July 31, 2018 at $53.06.
Balance Sheet Highlights:
As at June 30, 2018, the company’s assets totalled $132.52 billion, 4% or $5.35 billion more than its value a year ago. The improvement resulted in part from a growth in ‘Investment Securities’ by $5.13 billion. Investment Securities as at June 30, 2018 amounted to $32.54 billion (2017: $27.41 billion).
Shareholders’ equity amounted to $46.36 billion which compares to equity of $44.20 billion as at June 30, 2018. As a result, book value per share amounted to $46.60 (2017: $44.43).
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