May 2006 Financial News

BST Releases Half Year Results

May 26, 2006

Results for the First Half-year Ended March 31, 2006
All figures quoted in Barbados Dollars unless otherwise stated
Figures translated to TT dollars was calculated at TT$3.20 = BDS$1.00

Barbados Shipping and Trading Company Limited (BS&T) in the half-year results to March 31, 2006 reported a fall in EPS from $0.498 to $0.208, representing a decline of 58%. This drop in performance is especially significant as this represents a fall in performance not only half year to half year, but from the first quarter to the second quarter.

The Director’s statement outlined a number of factors for the difference in performance. The most significant of these was the impact of the Group’s shareholding in Neal and Massy Holdings Limited (NML). Last year BS&T benefited from the realisation of profits from a part disposal of its shareholding in NML as well as the unrealized gains due to the appreciation in the first half of last year of NML’s share price. In the period under review though, the share price of NML declined, resulting in a negative impact on the bottom line. The drop in the contribution from Associated Companies from $6.9 to $4.7 million was attributed to a mediocre first half performance by Banks Holdings Limited and the share of pre-opening costs at the hotel properties of Casuarina Barbados and Morgan Bay St. Lucia.

At the current price of TT$19.50 and running EPS of TT$1.088, the shares of BS&T are trading at a P/E ratio of 17.92 times. The fading performance of the company does not lend support to the high multiple currently associated with the Group’s shares. As a result we continue to recommend a SELL on this share.

Jason Gokool
WISE Research Team