Aug 2007 Financial News

UCL Releases Half Year Results

Aug 16, 2007

Results for the Half Year Ended June 30, 2007

For the Half Year Ended June 30, 2007, Unilever Caribbean Limited (UCL) reported Earnings Per Share (EPS) of 64 cents, a minimal increase of 1.59 per cent or 1 cent on the comparable Half Year period in FY06.

Net Turnover for the period under review increased 6.01 per cent or $11.52 million to $202.99 million. However, Cost of Sales increased by a larger margin, up 14.07 per cent or $15.28 million to $123.86 million. As a result, Gross Profit stood at $79.13 million, down 4.54 per cent or $3.76 million on HY06.

HY07 on HY06, Selling and Distributions Cost rose 7.17 per cent or $1.37 million to $20.45 million while Marketing Expenses was up 14.24 per cent or $1.67 million to $13.36 million. Administrative Expenses, however, declined a significant 24.21 per cent or $7.06 million to $22.10 million. As such, Operating Profit amounted to $23.21 million, a minimal increase of 1.15 per cent or $0.26 million on HY06.

Net Finance Costs for HY07 was $1.07 million, down a considerable 16.47 per cent or $0.21 million on the corresponding figure in FY06. Thus, Profit Before Taxation ended the period at $22.14 million, up 2.19 per cent or $0.48 million on HY06. The Effective Tax Rate for the period under review was 24.16 per cent compared to a Tax Rate of 23.21 per cent for HY06. Ultimately, Profit After Taxation increased 0.94 per cent or $0.16 million from $16.64 million (HY06) to $16.79 million (HY07).

The Chairman has stated that the outlook for the remainder of the year is for an improved overall performance, with continued sustained growth, some improvement in margins, and tight containment of costs.

The Board of Directors has declared an interim dividend of 35 cents per share, payable on Friday 7 September 2007, to all shareholders whose names appear on the Register of Members as at 24 August 2007.

The shares of UCL are currently trading at a price of $19.90. At our forecasted EPS of $1.45 and the current price, this share is trading at a price to earnings multiple of 13.72 times. In light of these results, we currently recommend a HOLD on this share.

Nancy Chen
WISE Equity Research Team