Apr 2008 Financial News

AMCL Releases Year End Results

Apr 02, 2008

ANSA McAL Limtied (AMCL)
Results for the Year Ended December 31, 2007

Earnings Per Share
For the Year Ended December 31, 2007, ANSA McAL Limited (AMCL) reported a diluted Earnings Per Share (EPS) of $3.51, up a significant 27.2 per cent or $0.75 on the comparable EPS of $2.76 for fiscal 2006. Q407 on Q406, the Group’s diluted EPS increased 28.1 per cent from $0.89 (Q406) to $1.14 (Q407). The Chairman has stated that all of the sectors in the Group met the objectives set for them.

Financials
• Third Party Turnover amounted to $5.0 billion, up 20.7 per cent or $855.1 million on the comparable figure in FY06
• Operating Income increased 28.0 per cent or $227.5 million from $811.9 million (FY06) to $1.0 billion (FY07)
• Profit Before Taxation rose 27.9 per cent or $198.1 million to $907.9 million
• Profit After Taxation ended fiscal 2007 at $709.8 million, up 22.5 per cent or $130.5 million on FY06

Dividends
The Board of Directors has recommended a final dividend of $0.60 per share which will bring the total dividend paid to $0.90 per share for fiscal 2007, 20 per cent higher than that paid in fiscal 2006.

Outlook
According to the Chairman the Group is on track to meet or exceed all of the objectives that were set by the Board in the Group’s Vision 2010. The various sector heads gave the following synopsis:

Beverage and Manufacturing Sectors
In the Beverage Sector, further investment is planned for 2008 in the Grenada and Trinidad breweries which will increase capacity to meet growing demand. The double digit growth seen in fiscal 2007, is expected to continue in 2008 from increased market share. In the Manufacturing Sector, growth was driven by a robust local economy as well as improvements in the supply chain process. It is anticipated that growth in this sector will continue in 2008.

Automotive and Distribution Sectors
The Automotive Sector had a strong performance in 2007 which is expected to continue in 2008. The Distribution Sector achieved double digit growth in 2007 through organic growth and new agencies won. In addition investment in new cold storage facilities at Bryden’s Barbados enhanced its chilled and frozen food portfolio. A similar expansion is planned locally.

Financial Services Sector
Strong quarterly results continued at year end yielding an impressive 2007 result.

Media and Services Sectors
All divisions in the Media Sector – print, radio and cable TV, continued to record growth in revenues and profitability in fiscal 2007. In Print, a significant investment was made in the state of the art new press and production facilities. The look and feel of the Company’s media products are also being reengineered. In Radio, an additional frequency was launched and emerged as the leader in the East Indian music segment. Two FM frequencies were also upgraded to digital ready status. In Television, the Company applied for and was granted a “free to air license” allowing for national coverage. The Services Sector delivered a strong performance in fiscal 2007 with growth projected to continue in 2008.

Recommendation
AMCL last closed at a price of $47.50 on the local exchange. In light of these results, we are forecasting an EPS of $4.20 for fiscal 2008, which at the current price translates into a multiple of 11.3 times. Additionally using a multiple of 14 times and the forecasted EPS of $4.20, this share has an expected return of approximately 24 per cent or a Target Price of $58.80. Thus, we recommend a BUY on this share.


Nancy Chen
WISE Equity Research Team