Feb 2008 Financial News

WCO Releases Year End Results (YE07)

Feb 20, 2008

Results for the Year Ended December 31, 2007

Earnings Per Share
For the Year Ended December 31, 2007, West Indian Tobacco Company Limited (WCO) reported Earnings Per Share (EPS) of $1.86, up 8.8 per cent or 15 cents on the corresponding EPS of FY06. The Chairman has stated that the growth was driven by solid sales performance in the domestic market as well as improved productivity in Operations.

Financial Highlights
• Net Turnover for FY07 amounted to $496.3 million, up 11.3 per cent or $50.3 million on the comparable figure in FY06.
• Gross Profit increased 13.2 per cent or $41.7 million from $316.6 million (FY06) to $358.3 million (FY07).
• Operating Profit rose 10.5 per cent or $20.5 million to $215.7 million.
• Profit After Taxation ended fiscal 2007 at $157 million, up 9.2 per cent or $13.3 million on FY06.

Dividends
The Directors will recommend a final dividend of $0.94 per share at the Annual Meeting on Thursday March 27, 2008. If approved, this will bring the total dividend paid for 2007 to $1.86 (2006: $1.68). The final dividend will be paid on April 21, 2008 to shareholders on record at the close of business on April 11, 2008, pending approval.

Recommendation
WCO last closed at a price of $27.63 on the local exchange. We are forecasting an EPS of $2.00 for fiscal 2008, which at the current price translates into a price to earnings multiple of 13.8 times. At the forecasted EPS and a multiple of 15 times, this share has an estimated return of approximately 9 per cent on the current price or a target price of $30.00. We recommend a BUY on this share at this time.


Nancy Chen
WISE Equity Research Team