Home' Trinidad and Tobago Guardian : May 3rd 2015 Contents MAY 3 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG11
Intangible assets declined marginally
to J$644.9 million from J$650.8 mil-
lion previously. The largest compo-
nent, trademarks and licences,
declined from J$400.7 million to
J$396.8 million. Goodwill was
unchanged at J$190 million. Software
usage rights fell to J$48.3 million
from the previous level of J$56.4 million.
Total liabilities rose to J$1.86 billion from
the 2013 figure of J$1.68 billion. The major
component, trade and other payables, increased
marginally to J$1.14 billion from J$1.13 billion.
Within this category, the main elements were
trade payables and service contractor fees. The
former advanced to J$617.2 million from J$555.6
million while the latter increased from J$130.7
million to J$162.5 million as at December 2014.
Another significant component, prize lia-
bilities, rose to J$599.1 million from J$320.6
million as at the end of 2013. The 2014 figure
saw local lotto games balances jump from
J$130.8 million to J$339.5 million; this figure
includes an amount accrued for an advertised
jackpot of J$175 million.
In addition, the multi-jurisdictional lottery
game increased to J$255.3 million from J$188
million as at December 2013. This game is
played in several countries outside Jamaica,
including the Dominican Republic, Paraguay
and Barbados. (Subsequently, on March 6,
2015, the jackpot of J$179.5 million (BDS$3.11
million) was won by a Barbados national.)
Stockholders equity advanced to J$4.05 bil-
lion from the previous level of J$3.64 billion.
Retained earnings improved by a net of
J$402.5 million to close 2014 at J$2.02 billion.
The current year s profit of J$929.9 million
boosted this figure while dividends to share-
holders of J$527.5 million lowered the net
With 2,637,254,926 shares outstanding, each
share has a book value of J$1.53 (2013: J$1.38).
Income and profits
Total revenues advanced by 21 per cent to
reach J$41.3 billion from 2013 s J$34.1 billion.
The largest component, Cash Pot, generated
revenues of J$26.3 billion versus J$23 billion
previously. Two new games also made signif-
icant contributions. Money Time, which started
in October 2014, garnered J$1.18 billion in rev-
enues to the year-end. In addition, Top Draw,
which started in June 2014, brought in revenues
of J$759 million.
However, total direct expenses clawed back
J$37.59 billion in 2014; this was 22 per cent
greater than the J$30.81 billion incurred for
2013. Among the more significant direct
expenses were lottery and sports betting prizes
(2014: J$24.8 billion; 2013: J$20.7 billion), pin
codes (2014: J$4.72 billion; 2013: J$3.34
billion) and lottery and gaming taxes (2014:
J$2.21 billion; 2013: J$1.82 billion).
These changes allowed SVL to report a 2014
gross profit of J$3.72 billion; this was 11.8 per
cent greater than the J$3.33 billion earned for
Operating expenses declined to J$2.65 billion
from 2013 s J$2.77 billion. Core expenses, such
as staff cost and rental and utilities, did
increase; the former rose to J$668.9 million
from J$627 million while the latter moved to
J$292.7 million from J$286 million.
On the other hand, many expenses did
decline. These included professional fees,
irrecoverable general consumption tax (GCT),
local and foreign travel, complimentary tokens,
security and bank charges. The wide range of
expenses that fell suggests that a general mood
of cost consciousness must have infused the
organisation during the past year!
These changes allowed SVL to register a
profit from operations of J$1.07 billion; this
result is J$510.7 million or 90.7 per cent greater
than the 2013 result of J$563.3 million.
In line with higher cash balances, interest
income rose to J$75.7 million from 2013 s J$46.4
million. The slower rate of devaluation of the
Jamaican dollar during 2014 contributed to a
decline in net foreign exchange gains, which
registered at a modest J$6 million, down from
J$30.7 million in 2013.
Finance costs also moved down to J$16.3
million from the previous level of J$28.5 million.
Meanwhile, other gains, mainly GTECH reim-
bursements and bad debt recoveries, came in
at J$76.5 million, down from J$99.2 million
These movements saw the pre-tax profit
for 2014 register at J$1.22 billion; this result
was 71 per cent greater than the J$711 million
recorded for 2013.
Helped by a lower primary tax rate of 25
per cent and an employment tax credit of
almost J$50 million, the effective tax rate
dropped to 23.5 per cent (2013: 32.1 per cent);
this resulted in SVL recording an after-tax
2014 profit of J$929.9 million. This was 92.7
per cent greater than the J$482.6 million
recorded for 2013.
These results translated into 2014 EPS of
J$0.3526 versus J$0.1830 for 2013.
Using only about half of SVL s total assets,
the largest segment, lottery, generated sub-
stantially all of the company s pre-tax prof-
it. Pin codes generated a strong improvement
in revenues accompanied by a useful contri-
bution to profits.
Both gaming and hospitality and sports bet-
ting appear to be "treading water" and have
not yet begun to make a contribution to the
Dividends and share price
During calendar 2013, SVL paid dividends
totalling J$0.21. In calendar 2014, dividends
disbursed were J$0.23. In March 2015, the
Board of SVL agreed to pay a regular dividend
of J$0.08 and a special dividend of J$0.23;
these payments reflect the strong results gen-
erated during 2014.
Almost exactly one year ago, on May 6,
2014, SVL s share price was J$2.10. This price
closed at J$3.50 on April 29, 2015, reflecting
a capital appreciation of almost 67 per cent.
Over the one-year period, investors have
enjoyed a total return of J$1.63, comprising
the dividends paid in 2014 of J$0.23 together
with a capital gain of J$1.40. This represents
a percentage gain of 77.6 per cent. If we were
to include the dividends paid or announced
in early 2015, the total returns would be much
Dividends paid with respect to the 2014
fiscal period totalled J$0.48; when we relate
those payments to the recent price of J$3.50,
investors derive a yield of 13.71 per cent. This
high yield strongly suggests that the share
price is (or, was) significantly under-valued.
Last Thursday, April 30, SVL s Board also
met to evaluate its first quarter s performance
and to determine the payment of its first inter-
im dividend for 2015.
On April 18, 2011, SVL signed a new con-
tract with G-Tech which extends their rela-
tionship to 2026. This creates a high level of
predictability for the gaming industry in
One of the societal contributions from this
industry is that it funds a CHASE fund in
Jamaica, which provides financing for projects
in the areas of culture, health, arts, sports
and early childhood education.
These connections with the wider society
help mitigate any harmful side effects with
which the gaming (alcohol and tobacco)
industries are sometimes associated.
Supreme Ventures Ltd gets boost from...
Cash Pot revenues
and cost controls
enjoyed a total return
of J$1.63, comprising
the dividends paid in
2014 of J$0.23
together with a
capital gain of J$1.40.
This represents a
percentage gain of
77.6 per cent.
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