Jun 2008 Financial News

FFL Releases Year End Results

Jun 03, 2008

Flavorite Foods Limited
Results for the Year Ended December 31, 2007

Earnings Per Share
For the Year Ended December 31, 2007, Flavorite Foods Limited (FFL) reported Earnings Per Share (EPS) of $0.83, up a significant 23.9 per cent or 16 cents on the corresponding EPS of $0.67 reported in fiscal 2006.

Financials
• Revenue, up 18.3 per cent or $10.7 million to $69.4 million
• Cost of Sales, up 21.4 per cent or $5.9 million to $33.3 million
• Gross Profit up 15.6 per cent or $4.9 million to $36.1 million
• Other Operating Income, up 9.8 per cent or $0.1 million to $1.4 million
• Distribution Costs, up 11.2 per cent or $1.3 million to $12.6 million
• Administrative Expenses, up 16.6 per cent or $2.2 million to $15.4 million
• Other Operating Expenses, down 51.0 per cent or $0.4 million to $0.4 million
• Operating Profit, up a considerable 27.3 per cent or $1.9 million from $7.1 million (YE06) to $9.1 million (YE07)
• Finance Costs, up 36.9 per cent or $0.03 million to $0.1 million
• Net Profit, up 23.7 per cent or $1.2 million from $5.2 million (YE06) to $6.5 million (YE07)

Dividends
The Board of Directors has declared a final dividend of 35 cents (2006: 30 cents) per share payable on June 27, 2008

Recommendation
The shares of FFL are currently trading at a price of $5.68. We are forecasting an EPS of $1.00 for fiscal 2008, which at the current price translates to a price to earnings multiple of 5.7 times. This multiple is attractive given that this share usually trades in the band of 7 to 8 times. However, this share is tightly held with the top ten stockholders as at June 30, 2007 holding approximately 97 per cent of the outstanding share capital of this Company. Thus, while we continue to recommend a BUY based on fundamentals, we caution investors on the availability and liquidity of this share.


Nancy Chen
WISE Equity Research Team