Nov 2007 Financial News

LJWB Releases Nine Months Results

Nov 21, 2007

L.J. Williams Limited (LJWB)
Results for the Nine Months Ended September 30, 2007

For the Nine Months Ended (NM) September 30, 2007, L.J. Williams Limited (LJWB) reported Earnings Per Share (EPS) of 20 cents, up an outstanding 150 per cent or 12 cents on the comparable period for fiscal 2006. However it is important to note that in August 2007 the Company sold its 26 per cent shareholding in Century Elson Limited for a pre tax benefit of $1.5 million. Excluding the sale, the Net Profit would have been up 54 per cent, year on year, which is still significant growth.

Sales for the Nine Month period amounted to $104.67 million, up 21.58 per cent or $18.58 million when compared to the same period in the last financial year. Operating Profit amounted to $5.29 million compared to $2.55 million in the corresponding period of fiscal 2006, an noteworthy increase of 107.17 per cent.

Finance Costs were up 37.95 per cent or $0.27 million from $0.70 million (NM06) to $0.97 million (NM07). Thus, Profit Before Taxation ended the period under review at $4.32 million, an increase of 133.39 per cent on the comparable figure for NM06.

The Effective Tax Rate for the period under review was 6.64 per cent compared to a Tax Rate of 11.78 per cent for NM06. As such, Profit After Taxation was up a considerable 146.97 per cent or $2.40 million to $4.03 million.

The Chairman has stated that the Parent Company is achieving its budgeted projections despite challenging cost increases, particularly in the labour and transportation sectors. Additionally, the increase in the European and Canadian currencies are an area of concern to the Company. He has also stated that Movalite is doing well for the year and will achieve its 2007 goal. However, Naco continues to under perform and has lost $0.40 million for the period under review. In light of this, the Board has decided that it is in the best interest of the Group to close Naco at the end of the year. The winding up process is expected to be completed by March 2008 and no significant charges are expected as there are sufficient assets to cover liabilities.

The Company is projecting an EPS for 2007 between $0.25 and $0.27.

LJWB last closed at a price of $1.20 on the local stock market. At the current price and a forecasted EPS of 25 cents, these shares are trading at a low price/earnings ratio of 4.8 times. Thus, based on this analysis, we recommend a BUY. However, we do caution investors that this share may prove difficult to acquire as approximately 57 per cent of the issued share capital is held by substantial interests.

Gia Singh
WISE Equity Research Team