Nov 2007 Financial News

UCL Releases Nine Months Results

Nov 15, 2007

Unilever Caribbean Limited (UCL)
Results for the Nine Months Ended September 30, 2007

For the Nine Months (NM) Ended September 30, 2007, Unilever Caribbean Limited (UCL) reported Earnings Per Share (EPS) of $0.91, up a healthy 18.18 per cent or $0.14 on the corresponding EPS for FY06. Q307 on Q306, the EPS was up a substantial 92.86 per cent from $0.14 to $0.27.

Revenue for the Nine Month period amounted to $304.59 million, up 12.76 per cent or $34.46 million on the same period in the last financial year. Q307 on Q306, this figure was up by a significant 29.17 per cent from $78.66 million to $101.61 million. Expenses were also up, from $240.44 million (NM06) to $268.83 million (NM07), an increase of 11.81 per cent. While Q307 0n Q306, Expenses increased by a significant 23.83 per cent. Thus, Profit from Operations ended the Nine Month period at $35.77 million, up 20.44 per cent or $6.01 million on the corresponding period in fiscal 2006.

UCL’s Finance Income for the period under review was $0.11 million, up 80.95 per cent on the same figure for NM06, while Finance Expenses totaled $2.23 million, down 9.46 percent on the corresponding figure for FY06. Thus, Profit Before Taxation ended the Nine Month period at $33.65 million, up a noteworthy 23.27 per cent on NM06. Q307 on Q306, this figure was up a considerable 104.44 per cent or $5.88 million.

The Effective Tax Rate for the period under review was 28.84 per cent compared to a Tax Rate 25.49 per cent for NM06. Thus, Profit After Taxation for NM07 stood at $23.95 million, up 17.74 per cent or $3.61 million on NM06.

The shares of UCL are currently trading at a price of $17.50. In light of the current results, we are revising our forecasted EPS to $1.53. At this forecast and the current price, this share is trading at a P/E multiple of 11.44 times, which is attractive given UCL usually trades in the band of 13-16 times. Also, using a multiple of 14 times and the forecasted EPS of $1.53, this share has an expected return of approximately 22 per cent or a target price of $21.42. Thus, based on this analysis we recommend a BUY on this share.


Gia Singh
WISE Equity Research Team