Monday 24 September, 2018

Fosrich posts upbeat earnings, but stock sluggish

Fosrich Managing Director Cecil Foster points to his company's name on the trading board after listing.

Fosrich Managing Director Cecil Foster points to his company's name on the trading board after listing.

Lighting company Fosrich posted a fivefold increase in earnings per share (EPS) for its second quarter to June 30, but the stock still trades at near initial public offering (IPO) levels.

Explaining its positive financials, Fosrich said, "The result for this, our second quarter since our listing on the Junior Market of the Jamaica Stock Exchange, reflects the implementation of specific strategies as outlined within our strategic plan." 

Revenues were $320.4 million, reflecting a 19 per cent  increase for the quarter compared to the comparative period last year. Gross profit increased 23 per cent to $141 million and Net profit increased 900 per cent to $29.8 million from $2.9 million over the prior year.

Nevertheless, the stock closed at $2.75 on Tuesday or 16 per cent lower year to date despite its best ever quarterly performance.

EPS was $0.06 as compared to $0.01 in the prior year period. Over six months, EPS totalled $0.12 compared to 0.05. 

Fosrich said that revenue increased during the second quarter due to it meeting the demand for its product in the marketplace. The company also cut its administrative expenses year to date to $196.2 million, down by $14 million on the prior year, reflecting efficiencies gained from management of staff and related costs, the company said.

The balance sheet shows equity of $670 million over $609 million in the prior period. Part of the asset growth related to a large spike in amounts due from related parties at $243 million compared with $125 million a year earlier. 

On December 19, 2017, the stock listed at $2.00 per share and closed on its first day of trading at $2.99. Intrepid investors pushed the stock as high as $3.77 but much of the year it teetered around $2.50.

For the latest news, download our app at http://bit.ly/GetALoopJM for Android; and at http://bit.ly/GetiLoopJM for IoS.