Aug 2007 Financial News

RML Releases Half Year Results

Aug 09, 2007

Results for the Half Year Ended June 30, 2007

For the Half Year Ended June 30, 2007, Readymix (West Indies) Limited reported impressive Earnings Per Share (EPS) of $1.60. This figure was up by a noteworthy 661.90 per cent or $1.39 on the corresponding period in FY06. Comparing Q207 on Q206, the Group’s EPS was up 361.11 per cent from 18 cents (Q206) to 83 cents (Q207) while Q207 on Q107, this figure was up 7.79 per cent or 6 cents.

Revenue for the period under review amounted to $153.93 million, up a considerable 30.19 per cent or $35.69 million on the comparable period in FY06. According to the Directors, this increase in the Group’s revenue is due to higher volumes in all the subsidiaries, as the increased demand for concrete remains strong.

HY07 on HY06, Operating Profit increased a significant 269.07 per cent or $20.34 million to $27.90 million while Finance Costs fell 34.29 per cent or $1.02 million to $1.95 million. As a result, Profit Before Tax rose an outstanding 465.29 per cent, an increase of $21.36 million to end the six-month period at $25.95 million.

The Effective Tax Rate was 25.90 per cent for HY07 compared to a Tax Rate of 41.94 per cent for the same period in FY06. Thus, Profit After Tax increased by a substantial 621.43 per cent or $16.56 million from $2.67 million in HY06 to $19.23 million in HY07.

The Directors have stated that going forward, the improved profitability is expected to continue. Based on these results, we are revising our forecasted EPS upwards to $3.00 for FY07. At the current price of $7.44 and this forecasted EPS, this share is trading at a price to earnings multiple of 2.48 times. While we continue to recommend a BUY on this share, we remind clients that approximately 80 per cent of the issued share capital of this company is held by substantial interests. As such, acquiring this share will most likely by difficult.


Nancy Chen
WISE Equity Research Team