ECL’s Profit Jumps By Over 400%

• Express Catering Limited has recorded a net profit of US$1.15Mn for the third quarter of the financial year ending February 28, 2023. This represents an 853.7% yoy increase. For the nine months, profit was up 428.5%.
• Revenue for the quarter increased by 73.5% yoy to US$6.04Mn, the best quarterly performance, since the company’s inception. This was bolstered by an improved passenger count of 639,274 for the quarter up from 423,169 in the previous corresponding quarter. The spend-per-passenger of US$9.44 also grew when compared to the previous corresponding period (US$8.05). Revenues for the nine months were up 57.7% to US$15.15Mn due to a 2.6% increase in passenger totals over 2019 levels and a 9.2% increase in spend-per-passenger.
• Cost of sales for the quarter was up 62.8% yoy to US$2.01Mn and was mainly attributable to an increase in raw materials. However, revenue growth outpaced the increase in the cost of sales, thereby resulting in an improvement in the gross margin from 64.5% in FY 2022 to 66.7% in FY 2023.
• ECL’s stock price has increased by 13.6% since the start of the calendar year. The stock closed Thursday’s trading session at $5.84 and currently trades at a P/E of 23.3x which is above the Junior Market Other Sector Average of 17.0x.
• Expectations for the tourism industry remain high, with projections of generating record earnings. For ECL, the completion of its food court continues at a brisk pace. The company recently opened its Guitar Bar which will serve as the centrepiece for the new food court and it also continues to work on the Bob Marley One Love experience. This expansion project is expected to contribute positively to ECL’s bottom line, thereby driving shareholder value, once completed.

(Sources: JSE and NCBCM Research)