Home' Trinidad and Tobago Guardian : September 21st 2017 Contents BG12 stocks
Thursday, September 21, 2017
LJW deepens its retail footprint
Clico associate and
subsidiary of Wil-
liams Holdings Ltd,
LJ Williams Ltd
(LJW) is involved in
turing, distribution and retailing.
Let us now review LJW's results to
Total assets improved by 2.5 per
cent, moving from $129.8 million
to $133.1 million.
Long-term assets rose to $81.9
million from $79.5 million. Invest-
ment property was stable at $15.65
million. The Abercromby Street
rental of ice space is valued at
$7.65 million while the St Vincent
Street car park property is valued
at $8 million.
Property, plant and equipment
advanced from $61.7 million to
$63.4 million. The major increases
were shown under land and build-
ings (increased by $1.26 million)
and plant and machinery, which
increased by $0.33 million.
Inventories were little changed,
edging down to $28.9 million from
$29.2 million. The major shifts
occurred under goods in transit
and raw materials; the former in-
creased to $4.3 million from $3.0
million while the latter declined to
$3.5 million from $4.4 million.
Trade and other receivables
declined to $18.1 million from $19
million. All components exhib-
ited falls, in particular, net trade
receivables closed at $15.8 million
from $16.3 million. The retirement
bene it asset improved to $2.58
million from $2.03 million. This re-
flected the excess of the fair value
of the plan's assets of $22.9 million
over its projected obligations of
Interestingly, the discount rate
was increased to 5.5 per cent from
5.0 per cent while the assump-
tion for future salary increases
declined to 4.0 per cent from 5.0
per cent; these changes helped de-
crease the plan's costs.
Cash and cash equivalents im-
proved to $4 million from $2
million. Although investing activ-
ities increased, this improvement
mainly reflected the bene icial
shifts from larger amounts of cash
generated from operating activ-
ities and lower expenditures on
Total liabilities edged down to
$57.6 million from $57.8 million.
Total borrowings declined to
$38.55 million from $39.15 million.
The long-term portion declined
to $16.83 million from $17.71 mil-
lion while the current portion in-
creased to $3.13 million from $2.0
In addition, bank overdrafts and
short-term advances fell to $18.6
million from $19.4 million.
The major increase under cur-
rent borrowings reflected a new
short-term loan of $811,000 and a
inance lease of $213,000.
Under the revised calculation,
its long-term debt to EBITDA ratio
closed at 2.57, which is within the
stipulation of 3.50 times. Overall,
its gearing ratio improved to 31 per
cent from 34 per cent.
Trade and other payables rose
to $19.06 million from $18.65 mil-
lion. Accrued charges increased
to $2.3 million from less than $1.0
On the other hand, trade paya-
bles declined to $16.6 million from
Total equity improved to $75.4
million from $72 million.
Retained earnings advanced to
$21.32 million from $18.84 million.
This increase reflected the current
period's pro it of $2.48 million.
Other reserves rose to $20.12
million from $19.18 million.
The re-measurement of retire-
ment bene it assets contributed
$889,000 while the increase in the
fair value gain on available-for-sale
assets added $53,000. The latter
reflected the appreciation in the
value of its holdings of shares in
GraceKennedy Ltd. Stated capital
was irm at $33.976 million.
The company has three
classes of shares in issue com-
prising 46,166,600 "A" common
shares (valued at $4.617 million),
19,742,074 "B" common shares
(valued at $29.131 million) and
45,590 preference shares (valued
at $228,000). The "A" shares are
entitled to one tenth of the div-
idend that is payable to the "B"
Both the common and prefer-
ence shares have equal voting
The weighted average number
of shares outstanding was stable
at 24,358,741; consequently, the
book value of each share improved
to $3.10 from March 2016's $2.96.
Clico (Trinidad) Ltd is listed as
owning 10,190,584 "B" shares and
3,498,956 "A" shares for a total
of 13,685,540 shares. The total
number of shares outstanding is
65,954,264; consequently, since
each share has equal votes, Clico's
stake gives it only 20.75 per cent of
the total voting rights.
and pro it
LJW's total revenue expanded
by 8.1 per cent to $114.98 million
from $106.4 million. However, its
cost of sales increased by a modest
2.6 per cent to $77.61 million from
$75.65 million. Accordingly, gross
pro it advanced by 21.5 per cent to
$37.37 million from $30.75 million.
Other income improved to
$2.77 million from $2.46 million.
Its major component, rental in-
come, increased to $1.14 million
from $825,000. In 2016, gain on
investment property of $1.25 mil-
lion boosted this income. In 2017,
gain on foreign exchange of $1.39
million helped this result.
Consequently, net income ad-
vanced to $40.14 million from
$33.2 million, or by 20.9 per cent.
Administrative expenses in-
creased by 12.6 per cent to $31.14
million from $27.64 million. The
largest component was employee
bene it expenses, which rose to
$17 million from $15.6 million. This
is consistent with a slightly larger
headcount of 181 employees (2016:
176). There would also have been
recruitment and training costs
related to the start-up of the new
Home Store branch at C3 Mall.
Other expenses climbed to $9.7
million from $7.4 million while
depreciation charges edged up to
$2.85 million from $2.76 million.
Consistent with a weaker econ-
omy, advertising costs declined to
$1.3 million from $1.7 million.
Distribution costs, which largely
comprise transportation costs,
edged up to $1.57 million from
$1.49 million. These changes saw
operating pro it improve to $7.43
million from $4.08 million.
Consistent with lower debt, i-
nance costs fell marginally to $3.91
million from $3.98 million.
Consequently, pre-tax pro it
improved to $3.53 million from
$97,000. for iscal 2016.
In 2016, there was a tax write-
back of $821,000., which re-
sulted in an after-tax position of
$918,000. In 2017, the tax expense
was $1.05 million, which entirely
comprised business and green
fund levies. This change produced
a net pro it of $2.48 million.
That result translated to EPS of
$0.10 compared with the previous
The manufacturing segment
registered 4.9 per cent higher
sales and delivered 26.1 per cent
greater pro it. This result was
helped by the restructuring of
Movalite Limited accompanied by
the increased exports of Evostik
The trading division, which is
the largest segment, produced an
8.4 per cent sales improvement
and contributed a 23.2 per cent
pro it increase. This division in-
cludes the increasingly pro itable
Home Store retail outlets.
During the year, the second
Home Store outlet was opened at
C3 Centre in San Fernando. LJW
has a ten-year lease for its space at
this mall. It is expected that, when
that mall is fully tenanted, sales
at that branch should improve
This division's activities also
include the distribution and sale
of grocery lines, including wine,
hardware and allied products.
Shipping services generated 11
per cent greater revenues and pro-
duced 22.5 per cent higher pro its.
The star performer in this division
was its logistics and brokerage sec-
tion, which is expected to grow in
spite of dif icult economic times.
Q1 results to
Sales for the quarter ended June
2017 increased by 14.2 per cent to
$28.76 million from $25.2 million
for the comparative 2016 period.
In addition, operating pro it ex-
panded by more than 82 per cent
to $1.95 million from $1.07 million
and the after-tax result registered
at $837,000. versus $29,000.
These changes resulted in EPS
of $0.03 compared with less than
$0.01 for the 2016 period.
These results were driven by im-
proved pro it at the Home Store;
the Barataria outlet registered a
seven per cent increase while the
C3 outlet continues to record in-
creasing sales as new stores open
in that mall.
Movalite recorded a pro it while
the shipping division continued to
do well. Stronger export sales un-
derpinned the improved perfor-
mance of the Hardware Division;
however, local sales were flat.
The major setback occurred in
the Food Division, where the tim-
ing of imports and delays in clear-
ing goods restrained revenues.
LJW's "B" share price closed
at $0.96 on March 31, 2016. Dur-
ing 2016, it continued to close at-
progressively lower price points
and ended at $0.66 on December
31, 2016. This year, it staged a
modest recovery, closing at $0.71
on January 31, 2017 before ending
at $0.86 on March 31, 2017. It was
recently quoted at $0.79.
At that price, the P/E multiple is
7.9. That price also reflects a dis-
count of almost 75 per cent from
its book value of $3.10.
Most of LJW's divisions are
showing signs of stability and/
or growth. The two retail stores
provide a reliable source of much
needed cash flows, which will help
improve its capacity to comforta-
bly pay a dividend.
In the chairman's report, it was
suggested that, as long as recent
trends in pro itability are sus-
tained, it is likely that an interim
dividend can be paid for the cur-
rent (2017/18) iscal period.
Con irmation of that trend will
be given when the half-year re-
port to September 2017 is released
sometime in early November 2017.
If realised, then shareholders may
expect that an interim dividend
will be paid sometime thereafter.
There are three outstanding
legal matters and claims pending,
which are all likely to be settled in
the company's favour; when these
matters are eventually resolved,
the proceeds will help improve
the company's cash flows. The es-
timated potential total net inflows
may exceed $20 million.
The three counter-parties for
these matters are a former ship-
ping principal, Petrotrin and NH
International (Caribbean) Ltd.
In next week's article, we will
review Jamaica Broilers Group
Ltd 2017 results.
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