GWEST Reports Net Profit for the First Time in 3 Years Due to Fair Value Gains on Investment Property

• GWEST reported net profit of $21.19Mn (EPS: $0.05), a significant improvement when compared to the $47.50Mn (EPS: -$0.10) net loss incurred over the same period last year. This is also the first time that the company is reporting a net profit in three years. Investors reacted positively, as the stock appreciated by 20.0% following the release. 
• The positive outturn was due to an increase in other gains (+85.1% or $43.33Mn), coupled with contractions in admin expenses (-19.4% or $13.24Mn), other operating expenses (-16.1% or $15.73Mn) and finance costs (-18.3% or $8.30Mn). The company also recorded a significant increase in tax credit, which moved from $6.40Mn in 2019/20 to $19.26Mn in 2020/21, helping to bolster its bottom-line. 
• The strong bottom-line performance occurred despite a contraction in overall revenues (12.4%) given a significant fall-off (35.9% or $27.09Mn) in revenues from medical services, which outpaced the growth achieved (+20.7% or $11.09Mn) in revenue from lease rental. 
• The increase in other gains was fueled by fair value gains on investment property which amounted to $101.46Mn relative to $65.76Mn in 2020. Meanwhile finance costs declined due to lower interest on bank loans, lease liabilities and bank overdraft interest. 
• GWEST stock price has appreciated by 36.1% since the start of the year, and closed Tuesday’s trading session at a price of $1.02 per share. At this price, the stock trades at a P/E ratio of 20.4x earnings, which is below the junior market sector average of 24.1x earnings.

(Source: Company Financials)