Mar 2007 Financial News

PUB Releases Year End Results

Mar 27, 2007

Trinidad Publishing Company Limited (PUB) reported Earnings Per Share (EPS) of $1.17 for the year ended December 31, 2006. This represented a substantial increase of 28.57 per cent or 26 cents on the corresponding EPS of FY2005.

Revenue for the period under review amounted to $163.06 million, a noteworthy increase of 33.63 per cent or $41.04 million on the comparable period in 2005. Income Before Taxation stood at $61.64 million- up by 27.07 percent or $13.13 million on the previous financial year. The Effective Tax Rate for FY2006 was 24.03 per cent which was marginally lower than the Effective Rate of 24.99 per cent for FY2005. As a result, the Profit After Taxation for the period under review amounted to $46.83 million and was up on the previous financial year by an outstanding 28.70 per cent or $10.44 million.

The Board of Directors has declared a final dividend of 35 cents, which will bring the total dividends declared for 2006 to 50 cents compared to 32 cents in the last financial year- an increase of 56.25 per cent. The final dividend will be paid on May 31, 2007.

In an article published in the Guardian Newspapers on March 27, 2007- the Managing Director and Media Sector Head of the Trinidad Publishing Company, Mr. Grenfell Kissoon, commented that 2006 was the best ever overall performance in the history of PUB. Additionally, he attributed the remarkable results to: strong advertising demand fueled by a buoyant economy, strong brands across the three divisions and intense competitive activity in some sectors. Mr. Kissoon expects this trend to continue in 2007.

In his Chairman’s Statement, Mr. Dennis Adrian Gurley, was also optimistic about the future for the Company. He believes that the growth prospects for Trinidad and Tobago continue to be very strong and PUB will continue to deliver by capitalizing on its technological investment and by maximizing opportunities for synergies and economics within the Company’s three business units, thereby increasing shareholder value.

The shares of PUB are currently trading at a price of $21.29. In light of the results for FY2006 and the forward looking statements of both the Chairman and the Managing Director, we are forecasting an EPS for FY2007 of approximately $1.45. At the current price and forecasted EPS, these shares are trading at a price to earnings multiple of 14.68 times- which is attractive for a share that typically trades in the band of 15 to 20 times.

Additionally, using a multiple of 17 times and based on WISE’s forecasted EPS of $1.45, we have estimated a 12 month return on this share of approximately 16 per cent or a target price of $24.65. Thus, at this time we recommend a BUY on this share.


Gia Singh
WISE Equity Research Team