JFP Records Loss In Q1

• Furniture Manufacturer, JFP Limited recorded a net loss of $14.87Mn for the first quarter ended March 31, 2023, relative to a profit of $34.91Mn in the corresponding period of 2022.
• Revenue for the quarter was down by 31.3% yoy to $75.77Mn, due to delays beyond the control of JFP’s production department. Two key factors included changes to the design/build process and the logistics required to return to the work environment inside a local international airport. Cost of sales increased by 1.2% which, when combined with the falloff in the topline, resulted in a 45.2% decline in gross profit. As a result, the gross margin shrunk from 70.1% to 55.9%.
• Administrative expenses increased by 18.5% in Q1, driven by higher staff costs due to a larger staff complement.
• Despite having a challenging first quarter, the company is expected to rebound in the coming quarters. The company inked a commercial deal with Total Office, a Trinidadian office supply company, in March 2023 that will create a regional distribution chain for JFP and a manufacturing arm for Total Office. The partnership will give JFP a foothold in the regional office furniture distribution trade.
• JFP stock price has increased by 4.60% since the start of the calendar year. The stock closed Thursday’s trading session at $1.80 and currently trades at a P/B of 11.4x which is above the Junior Market Manufacturing Sector Average of 2.9x.

(Sources: JSE and NCBCM Research)