Main Even Entertainment Group Limited: What a Quarter, Over J$ 100 MM Net Profit for Q1
Main Event, MEEG, with a market cap of J$ 3.5 billion and trading at J$ 11.50/ J$ 12 per share, just came out with one of the most explosive positive quarters we have seen in a minute at ItsMoneyMark, reminiscent of the tourism stocks/ companies as they emerged a bit quicker from the gates in terms of the earnings rebounds post Covid.
Main Event for its 1st quarter ended January 31, 2023, registered phenomenal revenue of J$ 626.9 million, + 211% year over year. The company’s net profit rang in at J$ 117.9 million, reversing a net loss in the comparative quarter, a year earlier. For Main Event, this quarter’s net profit resulted in a net margin of 19%, and earnings per share of J$ 39 cents.
In the analysis, realize that in Main Event’s entire previous year end financial numbers, they made earnings per share of J$ 50 cents. Therefore, in this quarter alone, Main Event delivered alone, 80% of its full previous year’s earnings. It is clear that the Entertainment sector is not only back, but it is now non-stop and booming. During Main Event’s 1st Quarter there is the Christmas entertainment period, that used to be viewed as a seasonal period, however, it seems Entertainment in Jamaica is year-round now versus seasonal. Therefore, the query coming out of these results, will be, can this Q1 be replicated, continue and be annualized? If so, we could be seeing a Main Event potential year of J$ 1.20 – J$ 1.60 earnings per share.
The 1st quarter number entirely sheds different light on Main Event’s share price and market cap moving forward in 2023.
- VM Investments Limited (JSE: VMIL) continues to be on the move with another private equity investment. Although we assume it to be “small” based on the disclosure of the equity %, they did not disclose the “dollar value”, it does generate some positive buzz for VMIL, and of course, some further pipeline or deal flow into the future. Important points, for an investment bank in any jurisdiction.
VMIL, via its subsidiary, VM Wealth Management, has taken a 5% stake in Coldbush Organics. Admittedly, we have never heard of this entity at ItsMoneyMark, so the “presser” to the JSE is an interesting read. It states that Coldbush Organics is a premium Jamaican chocolate company, that produces dark chocolate bars, chocolate tea balls, natural cocoa powder and natural cocoa Nibs. The raw material, cocoa, is cultivated at Mount Pleasant Farm and this investment assisted in materially increasing the acreage under cultivation.
The financials, or business size of Coldbush Organics is not disclosed in the release, to gauge the financial upside or impact here, however we do agree with the last paragraph, this is great for Jamaica and supporting our entrepreneurial spirit.
- Blue Power Group Limited (JSE: BPOW) had a rough year-to-date number, and they in fact continue to struggle with re-vamping profits or getting back on track it seems. The Caricom soap matter does seem to have taken its toll, and the Company will need to articulate how it intends to remedy this in a more fulfilling manner to shareholders.
By the numbers, BPOW released its 9 months unaudited figures, and the net profit fell to J$ 29 million for the period ending January 31, 2023, from J$ 204.3 million, in the comparative period, January 31, 2022. This represented a fall off in net profit for BPOW of 86% year over year. The numbers demonstrated how much in the previous year’s comparative period, 9 months 2022, these line items (i) gain on sale of investment property and (ii) other income totalling approximately J$ 201 million, drove the financial results. Without these line items recurring at this level in the 9 months 2023, BPOW’s earnings were materially different. Earnings per share for the current 9 months, was J$ 5 cents.
On a positive note, although we are more focused on the bottom line, BPOW did register material revenue growth year over year, with top line surging to J$ 633 million, from J$ 346 million, increasing by 83%.
- Caribbean Assurance Brokers Limited (JSE: CAB) The Company has released a surprise announcement to the JSE, Jamaica Stock Exchange, that in our opinion is not a good one for CAB minority shareholders.
We had written a few times recently how impressed we were with the “recent wins” at CAB and clearly the strong leadership by their CEO, Mrs. Tania Waldron-Gooden. To our re-collection, the net profits improved materially and were heading in the right direction over the last two (2) financial year-ends for CAB.
This is a change we did not expect to see happen at CAB given the recently released earnings numbers by the Company, for the period ended December 31, 2022, whereby CAB hit a big number, of J$ 77.9 million in net profit. For the year ended 2022, CAB’s earnings were + 43% over the previous year, 2021.
Here comes the surprising news, the CEO resignation at CAB, and the effective date is April 30, 2023. At the end of this, the real query will not be about CAB and their future, but where next does the leadership skills and expertise of Mrs. Waldron-Gooden land. That is, is she heading to another, JSE publicly listed firm, one with a significantly larger market cap, or what is next?
At the time of writing, we got the answer, the Business Eagle, and highly respected Tania Waldron-Gooden has landed at Island Grill, as their next CEO, effective May 1, 2023, and the hot market expectation is that eventually, we will see especially considering this move, Island grill “in time” on the JSE.
- Lumber Depot Limited (JSE: LUMBER) We cannot recall when last, we have seen both Blue Power Group and LUMBER report lower profitable periods simultaneously.
LUMBER did not fair as badly as BPOW did for the 9 months results. LUMBER reported net profit of J$ 106.7 million versus J$ 142.9 million, representing a fall-off in net profit of 25%, year over year. As a result, earnings per share registered was J$ 15 cents, comparative to J$ 20 cents. LUMBER’s revenue was flat, although it fared okay for the 9 months comparative period, coming in at J$ 1.149 billion, down slightly by J$ 10.5 million.
LUMBER has a lot of built in expectations, like BPOW given the not-so-distant changes in their respective top 10 shareholder tables, and 2023/ 2024 should be interesting, hotly minority anticipated shareholder years for LUMBER as well.
- As earnings reports keep packing into the Jamaica Stock Exchange, JSE, so too do dividends, as expected with quarterly numbers. Two (2) dividend meetings coming up shortly that will be hotly watched are (i) Seprod Limited (JSE: SEP) on March 27, 2023, and (ii) Sagicor Group Jamaica Limited (JSE: SJ) March 28, 2023.
No matter what is said, or commentary from Mr. Market or analysts, dividends are a long-term function of profitability and balance sheet health. In these times that we are in, and that should financially continue, one should not negate the dividend plays.
- NCB Financial Group Limited (JSE: NCB FG). Breaks below J$ 70/ share earlier this week to much surprise of brokerages and analysts. Upon review, and ItsMoneyMark, we had written in detail on NCB FG prior, at around J$ 80, that NCB FG was oversold by Mr. Market, although we mentioned there is always that potential of +/ – 10% range or so.
At J$ 70/ share, we are gonna call it, that NCB FG is even further oversold, and this is more than the
-10% range we mentioned in a previous newsletter. Historically, NCB FG at its book value or below, always is an intriguing play…
In looking at the cue, volumes/ bids can always come in at any time in a thin market. As at this week, there is not much support for the stock at the J$ 60s price levels or below currently.