May 2006 Financial News

Flavorite Foods Limited Releases Year End Results

May 04, 2006

Flavorite Foods Limited reported Earnings Per Share of 54 cents for the year ended December 31, 2005. This represented growth of 20.00 per cent from 2004’s year end earnings of 45 cents.

Revenue grew 14.79 per cent while cost of sales increased 18.99 per cent. This lead to an increase in Gross Profit of 11.45 per cent from $26.482 million to $29.515 million. Other Operating Income which is made up largely of Foreign Exchange Gains and Interest Income grew 8.23 percent to $1.084 million. Though Distribution Expenses fell 3.9 per cent, Total Expenses rose 9.60 per cent to $24.492 million due to a 22.11 per cent increase in Administrative Expenses and a 99.65 per cent increase in Other Operating Expenses.

Operating Profit ultimately grew 18.72 per cent to $6.108 million with the Company’s Operating Profit Margin moving from 10.82 per cent to 11.19 per cent. The Group’s Profit After Tax rose 20.21 per cent to $4.230 million.

At the current price of $5.05, Flavorite is trading at a price/earnings ratio of 9.35. This would suggest some room for movement within a 10 to 12 multiple. Approximating 15 per cent growth (approximately 62 cents) for next year, would suggest a price of $6.20. However, given the fact that the majority of these shares (approximately 85 per cent) are held by a few shareholders, there may be very little movement in the share price due to the unavailability of shares.


Sreshtha Tewari
WISE Research Team