Cost Containment Measures Bolster Wisynco’s Bottom-Line

• Bolstered largely by a reduction in selling and distribution as well as direct expenses, Wisynco Group Ltd reported a 9.6% year over year increase in net profit to $3.07Bn (EPS: $0.82) for the year ended June 30, 2021. 
• Expenses fell reflecting management’s efforts to contain expenses, resulting in an improvement in the expense to sales ratio to 23.7% from 25.3% last year. The savings from cost reduction was enough to offset the 1.1% (or $354.00Mn) decline in revenues. 
• However, low vaccination and stricter containment measures may continue to weigh on revenue generation in the near term. Although the Jamaican government has begun to vaccinate children, if it is unable to vaccinate a significant portion of the population , including children, to contain the recent spike in the infection rate, it could delay the restart of in-person teaching. This could weigh on Wisynco’s domestic revenues as sales to institutions contributes to revenues generated in the local market. However, this shortfall could be supplemented by higher export sales, as Wisynco continues its drive in the export markets, which grew 37% in FY 2020. 
• Wisynco’s stock price has fallen by 7.0% since the start of the year and closed Monday’s trading session at a price of $15.66 per share. At this price, the stock trades at a P/E ratio of 19.1x earnings, which is above the main market distribution and manufacturing sector average of 15.3x.

(Source: Wisynco Financials & NCBCM Research)