Feb 2008 Financial News

NML Releases First Quarter Results (Q108)

Feb 19, 2008

Results for the First Quarter Ended December 31, 2007

Earnings Per Share
Neal and Massy Holdings Limited (NML) reported Earnings Per Share (EPS) of $1.15 for the First Quarter Ended December 31, 2007. This represented an increase of 36.9 per cent or 31 cents on the comparable period’s EPS of $0.84 in FY07.

Financials
Group Third Party Revenue was up 14.7 per cent or $181.1 million to $1.4 billion when compared to the same period in the previous financial year. Operating Profit rose a significant 27.6 per cent or $27.9 million to $129.1 million while Share of Results of Associated Companies and Joint Ventures increased an outstanding 128.3 per cent or $13.1 million to end Q108 at $23.4 million.

Thus Profit Before Taxation for the period under review amounted to $152.5 million, up a noteworthy 36.8 per cent or $41 million from $111.5 million in Q107. Q108 on Q107, Profit After Taxation increased a considerable 37.1 per cent or $29.9 million to $110.4 million.

Takeover Bid for BST
With respect to the Takeover Bid for Barbados Shipping & Trading Company Limited (BS&T), NML has finally received the all clear from the Barbados Securities Commission to take up and pay for the BS&T Shares tendered to the Group. The Cease Trade Order made by the Barbados Securities Commission was lifted on Monday February 18, 2008.

Outlook
In October 2007, NML acquired Pereira & Company Limited through the purchase of 100% of the Company’s business, including its subsidiary, Pereira Finance Corporation. This acquisition will allow NML to take advantage of Trinidad and Tobago’s office equipment market, of which Pereira & Company currently holds the largest share.

Added to this, NML has continued to demonstrate its commitment to maximizing shareholder return as evidenced by the Group’s consistent double digit growth over the last four years. Over the period 2003 to 2007, the Group had an average growth rate of approximately 22 per cent. We anticipate that all of the Business Units will continue to perform well in fiscal 2008.

Recommendation
NML last closed at a price of $48.00. We have forecasted an EPS of $4.75 for FY08 which at the current price translates to a price to earnings multiple of 10.1 times. Additionally, at the forecasted EPS and a multiple of 11 times, this share has an expected return of approximately 9 per cent on the current price or a target price of $52.25. Based on these results, we continue to recommend a BUY on this share.


Nancy Chen
WISE Equity Research Team