Lanitis Bros. (LB) reported a significant improvement in first half results on the back of higher export sales as well as the distribution and selling of the prepaid areeba mobile phone cards.
Total turnover increased by 14.1% year-on-year to CYP 27.03 mln from CYP 23.7 mln a year ago. Revenues from the production and distribution of products at room temperatures (i.e. CSD’s, Fruit drinks & Juices, Water, Beer etc) (category A) advanced by 7.3% to CYP 18.17 mln, representing 67.3% of total turnover compared to 71.4% in 1H04.
Revenues from the production and distribution of chilled products (milk and dairy foods) (category B) advanced by 9.2% to CYP 7.38 mln, decreasing their contribution to total revenues from 28.6% to 27.3% in. The selling and distribution of the prepaid Areeba mobile cards (category C) contributed 5.4% of total revenues at CYP 1.47 mln compared to no such sales a year ago and CYP 616.000 in the first quarter.
Gross Profit increased by 6.4% to CYP 8.24 mln from CYP 7.74 mln but the gross profit margin deteriorated from 32.7% to 30.5%. Given the increased competition from parallel imports, LB offered large trade discounts on Coca-Cola products and lowered some of the prices of
its CSD products, thus burdening profitability margins at all levels. According to Egnatia Financial Services, the gross profit margin of ‘category A’ products fell from 36.0% to 34.7% in 1H05 (vs 30.9% in
1Q05). On the other hand, the gross profit margin of ‘category B’ products improved by 120bps to 22.4% (vs 23.4% in 1Q05) premised on higher prices especially in milk products, whilst ‘category C’ products’ margin stood at 6.3% (vs 7.3% in 1Q05).
On the positive side, operating expenses fell under 4% to CYP 6.96 mln from CYP 7.1 mln despite the rise in fuel costs, with most of the decline originating from sales and distribution costs which fell to CYP 5.74 mln from CYP 6.15 mln while administration expenses were moderately up at CYP 1.2 mln from CYP 941k a year ago.
Operating expenses as a percentage of sales were contained from 29.9% in 1H04 to 25.7% (vs 26.5% in 1Q05).
EBITDA advanced by 30.2% to CYP 3.06 mln, with the EBITDA margin improving to 11.3% from 9.9% in 1H04 (vs 8.9% in 1Q05). EBT were burdened by CYP 274.000 from the impairment in the fair value of investments and CYP 72.000 from the share of loss from Heineken Lanitis Cyprus Ltd (LB participates with 35%). LB posted net finance income of CYP 11.000 against a net finance charge of CYP 117.000 in 1H04 on lower interest charges.
Net Profit advanced 173.6% to CYP 809.634 from CYP 295.883 a year ago, with earnings per share improving to 0.32 cent from 0.12 cent in 1H04. An unrealised gain of CYP 66.000 from the revaluation of
investments was not reported in the P&L compared to a loss of CYP 303.000 in 1H04.
In the balance sheet, stocks of goods jumped to CYP 7.4 mln from CYP 4.65 mln, debtors were also up at CYP 14.8 mln from CYP 10.9 mln while cash balances were steady at CYP 4.99 mln from CYP 5.29 mln end of 2004.
Book value per share according to Financial Mirror calculations improved to 23.89 cent for a price to book of 0.43 times, while the company’s share price was broadly higher to 10.4 cent per share.
