Managing Director of Tropical Battery Company Limited Alexander Melville has indicated that with a pipeline of deals lined up for the rest of the year, and its Ferry location performing above expectation, the company will deliver improved results by year end 2021.
“We are making good progress with our pipeline of potential partnerships and strategic acquisitions in Jamaica and across the Caribbean region. We will have one or two to announce later this year,” Melville said in comments attached to the unaudited financials.
“Additionally, demand continues to be strong for the brands that we carry and our new Ferry retail store continues to perform above expectations. We have materially solved our supplier delay problems, and feel confident that Q2 and the second half of this fiscal year will be substantially better than this first quarter.”
For the first quarter ended December 31, 2020, the company reported increased adjusted after-tax net profit of JM$19 million. This represents an improvement of 26.2 per cent over Q1 December 2019 net profits of JM$15 million.
Revenue for Q1 came in at JM$451 million or 9.5 per cent below the similar quarter in 2019, when inflows were JM$498 million due to supplier shipment delays, as outlined by management.
“We are making good progress with our pipeline of potential partnerships and strategic acquisitions in Jamaica and across the Caribbean region”— Alexander Melville, managing director, Tropical Battery Company Limited
Gross profit percentage came in at 30.9 per cent; however, it was 30.1 per cent above last year’s. At the same tie, expenses of JM$104 fell by 6.4 per cent, from JM$110 million in Q1 2019.
Tropical Battery’s total equity was up 4.4 per cent, moving from JM$735 million at the end of fiscal year September 30, 2020, to JM$754 million as of December 31, 2020. The difference was attributed to increases in retained earnings.
Total asssets increased 9.0 per cent to JM$1.58 billion, or by $130 million, due to increases in inventory received in the last two weeks for FY Q1.
Likewise, total liabilities moved up by JM$111 million to $824 million as at December 31, 2020, compared to JM$712 million as at September 30, 2020.
Management said that the increase in liabilities reflects an increase in payables, “as we ordered more goods to help with recent delays.”
In addition, management noted a material change due to audited results for the prior year, since the company was carrying a JM$25-million asset relating to tax losses that could be offset against future tax liabilities.
As a result of the listing of the Company on the Jamaica Stock Exchange’s Junior Market, and the related entitlement to the remission of income taxes for the subsequent 10 years, this asset was written off through the income statement.
Meanwhile, interest expense associated with interest-bearing short- and long-term debt increased.
The implementation of IFRS 16 had the effect of increasing interest and depreciation expenses and reducing rent expenses.
Management also noted that COVID-19 had an adverse impact on operating expenses as well as the rates used to calculate the provisions for estimated credit losses related to trade receivables.