Home' Trinidad and Tobago Guardian : July 27th 2014 Contents JULY 27 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG13
After an extended period, L J
Williams now seems to have
regained its momentum and
started to produce reasonable
results. The company last
paid a dividend of $0.07 on
its "B" shares back in September 2008.
Over the next several years profits have been
very elusive. For the 15 months ended March
2009, the company incurred a loss of $2.78
million. This was followed by a $4.79 million
loss for the twelve months to March 2010.
For the March 2011 period, LJW incurred
a further loss of $4.75 million. Shareholders
sensed a glimmer of hope when the loss for
the 2011/12 period came in at a very modest
$57k. However, for the 12 months ending March
2013, the company again slipped into loss; this
time registering at $3.82 million.
Over this period the company underwent
tremendous transformations. These included
moving most of its facilities to a new location
in Barataria and starting a new "Home Store"
retail outlet from scratch.
It also exited from the Jamaican market and
sold properties in Chaguanas and Belmont,
while selected Port-of-Spain properties were
retained to generate rental income.
It has restructured its finances along more
favourable lines with new bankers, RBC Royal
Bank and, to a lesser extent, Intercommercial
Bank Ltd, replacing Scotiabank. These changes,
though painful, have begun to bear fruit, as
we shall see later.
Let us now turn to LJ Williams s results for
its 2013/14 fiscal period.
Increase in asset values
Total assets advanced to $136.4 million from
$129 million as at March 2013, reflecting a
change of 5.8 per cent. The largest movement
was observed in the value of non-current
assets, which rose by almost 10 per cent to
$81.4 million from $74.1 million.
The value of its investment property
increased to $14.4 million from last year s $13.2
million. This change was due entirely to the
$1.2 million revaluations of its properties at
124 St Vincent Street and 119 Abercromby
Street, Port-of-Spain. This gain also con-
tributed to other income. These two properties
generated $563k in rental income last year.
Plant, property and equipment advanced
to $64.5 million from the March 2013 figure
of $57.2 million, reflecting a gain of $7.3 million.
In this case, revaluation gains amounted to
$7.4 million. In addition, new purchases con-
tributed $2.4 million while depreciation charges
consumed $2.5 million.
The value of available for sale financial assets
contracted to $148k from last year-end s $1.81
million. In this case, the principal movement
was the sale of its shares in Pan American
Life Insurance Company T&T Ltd, formerly
known as Algico. This sale removed $1.67 mil-
lion from this asset class while contributing
$1.53 million to its 2014 other income.
While LJW s current assets were only mar-
ginally higher than the previous year, its current
ratio improved appreciably.
As at year-end 2014, the current ratio was
1.29:1.00; as at year-end 2013, this measure
was 1.22:1.00. Trade and other receivables still
exceeded the correspondent payables, although
by a narrower margin.
The most noteworthy change was observed
in the reduction of its bank overdraft and
short-term advances; this element contracted
to $16.1 million from $18.6 million a year earlier.
In addition, cash at hand and at bank increased
from $1.1 million as at March 2013 to $1.77
million on March 31, 2014.
Total liabilities declined to $64.9 million
from the 2013 level of $70.6 million. Lower
debt balances was the prime driver of this
Long-term borrowings contracted to $22.2
million from the March 2013 figure of $25.5
million. On the other hand, short-term bor-
rowing increased to $3.79 million from $3.26
million a year earlier. Meanwhile, bank over-
drafts and short-term advances fell to $16.1
million from $18.6 million as at March 2013.
These changes saw total debt decline to
$42.15 million from $47.3 million at the end
of the earlier period. After deducting the $1.77
million of cash on hand, the net debt value
was $40.4 million. Consequently, debt now
accounted for 36 per cent of the total capital
employed of $112.0 million. This gearing ratio
represented a significant improvement over
the 2013 figure of 44 per cent.
Strong equity gains
Total shareholders equity improved to $71.55
million from the March 2013 level of $58.37
million. Both retained earnings and other
reserves recorded strong increases.
Profit for the year boosted retained earnings
component by a total of $6.65 million; this
balance closed 2014 at $18.8 million.
Other reserves were positively impacted by
the gain on revaluation of lands and buildings
($6.58 million), the re-measurement of retire-
ment benefit assets ($863k) and fair value gain
on the market value of GraceKennedy Ltd
($8k). Meanwhile, the gain on the sale of PAL-
GICO shares of $912k limited the overall
increase to $6.54 million. This line item moved
from $12.23 million last year-end to $18.77
million on March 2014.
LJ Williams 2013-2014 results
The book value of each "B" share improved
to $2.94 as at March 2014 from $2.40 as at
the previous year- end. The "A" share has a
value of one-tenth of these figures, that is,
$0.29 and $0.24, respectively.
Revenues and profit
Revenues rose by 10.35 per cent to $102.6
million from 2012 s $93 million. Significantly,
the cost of sales increased by only 3.2 per
cent; this component moved to $69.8 million
from the previous year s $67.7 million.
This proportionately lower increase was due
to the declines in both raw materials and con-
sumables and other costs. Consequently, the
gross profit grew by a robust 29.5 per cent to
$32.8 million from the previous year s $25.4
Other income rose strongly to $4.1 million
from the previous level of $1.54 million. Con-
tributing to the 2014 result were two one-off
items: the gain on investment property of $1.5
million, due entirely to the revaluation exercise
and the gain of $1.53 million on the sale of its
shares in PALGICO.
Both administrative expenses and distribu-
tion cost were well-controlled and exhibited
only nominal increases from the previous year s
These changes allowed LJW to report an
operating profit of $9.8 million; this result
was more than twenty-two times the $440k
recorded for 2013.
Finance costs fell to $3.58 million from the
$4.07 million paid in 2013. This resulted in a
pre-tax profit for 2014 of $6.26 million (2013:
loss of $3.63 million).
The company s restored profitability allowed
it to utilise $1.9 million of accumulated losses,
which was a major factor in achieving a tax
credit of $386k. In 2013, there was a tax liability
These changes help push the after-tax profit
up to $6.65 million from the previous year s
loss of $3.92 million.
The EPS improved from a loss of $0.16 in
2013 to a positive $0.273 last March. This cal-
culation is based on the weighted average
number of shares outstanding of 24,358,741.
The manufacturing segment, which includes
Movalite Ltd, posted 14.4 per cent higher rev-
enues and delivered 174 per cent greater gross
Revenues at the trading segment, which
includes The Home Store Ltd, rose by 10 per
cent while gross profits advanced by 14.3 per
cent. In the last five months of its fiscal year,
LJW resumed the distribution of spirits; on
this occasion, it started with the Belvedere
Group, which, for a brief period in its long
history, was part of the CL Financial Empire.
The services segment delivered an 8.2 per
cent increase in revenues and generated a 13.4
per cent improvement in pre-tax profits.
Share price and likely dividend
Five years ago, on July 21, 2009, LJ Williams
"A" share was quoted at $0.54 while it s "B"
share fetched $1.70. Recently, the "A" share
was quoted at $0.25 and the "B" share at
$0.90. These prices do not yet reflect the
recent improvements in the company s for-
In mid-February, when it released its third
quarter results, the company announced its
intention to pay an interim dividend of $0.02
on its "B" shares, $0.002 on the "A" shares
and $0.10 on the preference shares; no pay-
ment date has yet been given.
It now seems more likely that one dividend,
inclusive of the unpaid interim amounts, will
be paid. An announcement may be made
sometime before it releases its first quarter
results in mid-August.
In recent weeks, the company has increased
its print advertisements for both its products
and vacant posts; this suggests that the positive
changes we have seen over the last year may
only be the tip of the iceberg...
One benefit of the recent changes in the
company s fortunes is that one of its major
shareholders , Clico will be in a better position
to negotiate the sale of its shareholdings, if it
is still so inclined. Alternatively, its board rep-
resentative may prefer to help re-build share-
holder value for the long term.
LJ Williams returns to profitability
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