November 12, 2019
Stationery and Office Supplies Limited (SOS) for the nine months period reported revenues of $933.22 million relative to $801.44 million in 2018, a 16% increase. For the third quarter, revenues grew by 5% to close the quarter at $294.67 million (2018: $281.51 million). The company highlighted that, “sales of SEEK product increased from $25M to $33M, a 30% increase during the back to school period.”
The Company’s cost of sales totalled $467.04 million, up 18% relative to the $395.33 million reported in 2018. Cost of sales for the quarter rose by 11% to $150.65 million (2018: $135.71 million). As a result, gross profit grew by 15% for the nine months amounting to $466.18 million relative to $406.12 million booked in 2018, while gross profit for the quarter totalled $144.02 million (2018: $145.81 million).
Administrative expenses totalled $242.38 million up 11% from $219.27 million booked in 2018, while selling and promotion expenses grew by 10% closing the period at $70.74 million relative to the $64.58 million reported in 2018. For the quarter, Administrative expenses went up by 10% to $84.77 million (2018: $76.90 million), while selling and promotion expenses closed at $22.41 million (2018: $20.13 million).
The Company’s depreciation cost amounted to $25.57 million, an increase of 28% relative to the $19.92 million incurred in 2018, while finance cost closed at $11.23 million (2018: $9.17 million). Finance income ended the nine month period at $806,320 (2018: nil). Loss on Foreign exchange totalled $3.91 million compared to $3.90 million booked for the corresponding period last year.
Profit before taxes grew by 24% amounting to $114.01 million relative to the $91.64 million earned in 2018. For the quarter, there was a 37% decline to $22.36 million (2018: $35.47 million).
SOS reported nil for tax expense compared to $60,000 for the same period of 2018. As such, net profit for the period totalled $114.01 million, an increase of 24% relative to the $91.58 million reported in 2018. Net profit for the quarter amounted to $22.36 million, down by 37% from the $35.47 million earned in the previous corresponding quarter.
Earnings per share for the period amounted to $0.46 (2018: $0.37), while EPS for the quarter totalled $0.09 (2018: $0.14). The twelve-month trailing EPS amounted to $0.46. As at November 12, 2019, the stock traded at $12.50.
Balance Sheet at a glance:
Total Assets increased by 6% to close at $888.10 million as at September 30, 2019 relative to $839.92 million reported twelve months earlier. The increase in total assets was primarily driven by increases in ‘Bank and cash’ which rose 80% to $87.47 million (2018: $48.67 million. ‘Inventories’ also contributed to the increase with an 11% growth to $230.55 million (2018: $206.90 million). ‘Trade and other receivables’ increase 7% to $159 million (2018: $148.01 million)
Equity attributable to stockholders of the Company as at September 30, 2019 stood at $596.10 million (2018: $495.33 million). This translated in a book value per share of $2.38 (2018: $1.98).
Analyst Certification -This research report is for information purposes only and should not be construed as a recommendation. 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.