HIGHLIGHTS

PHL Q12024

• Earnings:  Diluted Earnings Per Share increased 25.6% to $0.16 from $0.13
• Performance Drivers:
  • Revenue and Earnings Growth
  • Lower Finance Costs
  • Higher Margins
• Outlook:
  • New Restaurant Openings / Regional Expansion
• Rating: Maintained at OVERWEIGHT

AHL Q12024

• Earnings: Earnings Per Share remained at $0.10 from a previous $0.10
• Performance Drivers:
  • Lower Revenues
  • Margin Volatility
• Outlook:
  • Increase International Sales

• Rating: Maintained at UNDERWEIGHT

This week, we at Bourse review the financial performance of Prestige Holdings Limited (PHL) and Angostura Holdings Limited (AHL) for their respective first quarters ended 31^st March 2024. PHL’s performance benefitted from revenue growth and higher profitability margins, while AHL’s profitability was impacted by lower revenues. Could PHL positive momentum continue in the upcoming months?  Will AHL’s revenue in its operating territories normalize in the second fiscal quarter? We discuss below.

Prestige Holdings Limited (PHL)

Prestige Holdings Limited (PHL) reported a Diluted Earnings per Share (EPS) of $0.16 for the first quarter ended February 29th, 2024, up 25.6% from $0.13 reported in Q12023.

Notably, Revenue advanced 10.3%, from a previous $309.5M in Q12023 to $341.5M in the current period. Gross Profit rose 21% from the prior period to $115.7M. Other Operating Expenses and Administrative expenses increased 6.7% and 53.2% respectively. Other income rose 75.1% year-on-year (YoY). Resultantly, PHL reported Operating Profit of $19.9M in Q12024, 23.5% higher relative to $16.1M in the prior comparable period. Finance Costs marginally increase 1.2% to stand at $4.6M. The Group recorded 32.3% increase in Profit Before Tax (PBT) from $11.6M to $15.3M. Overall, PHL reported Profit Attributable to Owners of the Parent Company of $9.9M, 25.3% higher from $7.8M in the prior comparable period.

Revenues Higher

PHL recorded a solid performance for fiscal quarter Q12024, with total revenue expanding from $309.5M to $341.5M, on account of increased prices and new store sales (supported by the opening of five new Starbucks restaurants). Revenue grew 10.3% or $31.9M year-on-year (YoY). PHL noted its current restaurant locations totaled 134, with continued new store development being part of its strategic priorities.

Margins Improve

PHL’s profitability margins continued to trend upwards, supported by increased revenue and cost management. Gross Profit Margin rose from 30.9% in Q12023 to 33.9% in Q12024.  Operating Profit Margin improved from 5.2% to 5.8 % in Q12024, with Profit Before Tax (PBT) margin increasing to 4.5% from a previous 3.7%.

The Bourse View

PHL trades at a current market price of $11.36 and trades at a P/E ratio of 12.2 times, below the trading sector average of 16.6 times. The stock offers investors a trailing dividend yield of 4.0%, above the sector average of 3.4%.  

PHL remains well-positioned in the restaurant industry, both locally and regionally, with resilient and attractive brands portfolio as well as growing markets. On the basis of continued revenue growth, continued new store openings and relatively attractive valuations, Bourse maintains an OVERWEIGHT rating on PHL.

Angostura Holdings Limited (AHL)

For the three-month period ended March 31st, 2024, Angostura Holdings Limited (AHL) reported Earnings per share (EPS) of $0.10, remaining stagnant compared to the previous corresponding period.

Revenue declined 4.8% to $187.9M from the previous $197.4M, impacted according to AHL by ‘pre-planned maintenance’ which affected its Angostura Chill segment. Gross profit fell from $105.5M to $95.2M (-9.7% over prior comparable period). Notable changes to other operating costs included selling and marketing expenses and administrative expenses, which contracted 4.6% and 0.9% respectively, while Other Income was $1.1M versus an expense of $1.8M in the prior period. AHL also benefited from an expected credit writeback of $0.4M versus a loss of $0.8M in Q12023, due to stringent delinquency management. Results from operating activities amounted to $25.5M, a decrease of 12.9%. Finance cost fell 21.0% from $0.8M in Q12023 to $0.7M. Finance income advanced to $5.0M from a previous $3.7M, generated through the investment of surplus funds. Profit Before Tax (PBT) reduced to $29.8M from a previous $32.2M, down 7.2%. Profit for the period closed at $20.6M, lowered $0.5M or 2.5% versus the prior comparable period.

Reduced Revenues

AHL’s Q1 revenue fell for the second consecutive comparable quarter, with Total Revenue contracting 4.8% from $197M to $188M. According to AHL, Local Revenue decreased 5%, affected by maintenance work. The Group’s guidance suggests that a ‘full recovery’ from this issue should occur from Q32024. AHL’s Caribbean revenue reportedly grew 18%, while its International branded revenue fell 3% in the period.

Margins Dip

AHL’s profitability margins, particularly gross and operating profit, fell relative to the historical figures in Q12024. AHL’s Gross Profit margin dipped to 50.7% from 53.4%, driven by local and international revenue reduction. Similarly, Operating Profit margin decreased from 14.8% in Q12024 to 13.6% in the current period, despite lower operating expenses. Profit After Tax margin, however, slightly improved to 11.0% compared to 10.7% in the previous period.

The Bourse View

Market Developments

TTNGL
For the second consecutive year, Trinidad and Tobago NGL Limited (TTNGL) has announced a delay in the release of its audited financial statements for FY2023, citing ongoing audit activities at its sole underlying asset, Phoenix Park Gas Processors Limited (PPGPL). NGL expects the publication of its 2023 Annual Report by May 31^st, 2024.

Investors would have noted the absence of dividends from TTNGL in FY2022 and HY2023, periods for which the declaration of respective final and interim dividends are customary. It should be noted that there is currently no timeline for the resumption of dividends. Importantly, TTNGL as of September 2023 had cash and near cash resources amounting to $128.4M. In other words, if TTNGL fully utilizes its cash resources for dividends, they could pay out dividends of up to $0.80 per share.

NCBFG

The regional financial conglomerate, NCB Financial Group Limited (NCBFG) will be seeking to issue 78.5M ordinary shares with an option to upsize the offer to 117.75M ordinary shares in an Additional Public Offering (APO). The general offer price is J$65.00 per share (TT$2.81), implying that NCBFG would raise between J$5.10B – J$7.65B in new capital, which would be allocated towards reducing the company’s debt and bolstering the capital of its subsidiaries as it seeks to reallocate capital across the group. NCBFG’s stock price closed at J$62.50 (TT$2.70) on the Jamaica Stock Exchange (JSE) on May 1^st, 2024. The last traded price on the Trinidad & Tobago Stock Exchange (TTSE) was at TT$2.91 (J$67.36). Investors should note that this offer is exclusively accessible on the JSE and remains valid from May 6^th to May 27^th.

“This document has been prepared by Bourse Securities Limited, (“Bourse”), for information purposes only. The production of this publication is not to in any way establish an offer or solicit for the subscription, purchase, or sale of any of the securities stated herein to US persons or to contradict any laws of jurisdictions which would interpret our research to be an offer. Any trade in securities recommended herein is done subject to the fact that Bourse, its subsidiaries and/or affiliates have or may have specific or potential conflicts of interest in respect of the security or the issuer of the security, including those arising from (i) trading or dealing in certain securities and acting as an investment advisor; (ii) holding of securities of the issuer as beneficial owner; (iii) having benefitted, benefitting or to benefit from compensation arrangements; (iv) acting as underwriter in any distribution of securities of the issuer in the three years immediately preceding this document; or (v) having direct or indirect financial or other interest in the security or the issuer of the security. Investors are advised accordingly. Neither Bourse nor any of its subsidiaries, affiliates directors, officers, employees, representatives or agents, accepts any liability whatsoever for any direct, indirect or consequential losses arising from the use of this document or its contents or reliance on the information contained herein. Bourse does not guarantee the accuracy or completeness of the information in this document, which may have been obtained from or is based upon trade and statistical services or other third-party sources. The information in this document is not intended to predict actual results and no assurances are given with respect thereto.”