Forced to make positions redundant

Margaritaville (Turks) Limited is reporting a big drop in revenues of 99 per cent for the six months ended November 30, 2020, leading to net loss of US$805,000.

Revenues for the period under review plummeted to US$40,451 while revenues for the quarter amounted to US$20,034. The food and entertainment company emphasised that, “with no revenue to support expenditure, there are even greater efforts at cost containment. We had to initiate redundancy proceedings on behalf of some employees during the quarter to be compliant with local labour laws and also because some permits for work expired after the declaration of the Corona pandemic in March 2020”.

Cost of sales decreased by 96 per cent for the six-month period to US$40,451 while the decline for the quarter was also 96 per cent to total US$20,034. As a result, there was no gross profit relative to the US$2.89 million reported as at November 2019.

There was also no gross profit for the second quarter relative to the US$1.36 million posted in 2019. There was also no other operating income for the six months ended November 30, 2020.

Containing expenses to a minimum

Total expenses decreased by 67 per cent for the period in review to US$805,006. This decrease was associated with a 76 per cent decline in the company’s administrative expenses to US$533,819 compared to US$2.18 million in 2019.

Additionally, the company reported no promotional expenses for the period relative to the US$28,937 reported in the prior year’s corresponding period. Depreciation and amortization closed the six-month period at US$146,187 compared to US$113,128 in 2019 while management fees amounted to US$125,000, which was the said amount recorded for the comparable period in 2019.

However, for the second quarter ended November 30, 2020, total expenses decreased by 70 per cent to US$366,919. Consequently, operating loss for the first six months of the 2020 financial year amounted to US$805,006 when compared to the operating profit of US$445,312 reported 12 months prior.

Operating loss recorded for second quarter

Operating loss for the second quarter totalled US$366,919 versus an operating profit of US$128,010 in the previous comparable period. There was no finance cost incurred for the first six months ended November 2020.

As such, total comprehensive loss for the six months amounted to US$805,006 relative to total comprehensive income of US$445,312 reported in November 2019. While for the quarter, Margaritaville (Turks) Limited total comprehensive loss amounted to US$366,919 relative to a profit of US$128,010 in the previous comparable quarter.

The six-month loss-per-share was US$0.0119 compared to earnings-per-share of US$0.0066 reported in 2019, while the loss per share for the quarter amounted to US$0.0054 compared to the 2019 earnings per share of US$0.0019.

The company noted that, “this has been an unprecedented journey to date. There is no determined date for resumption of cruising, but the commencement of vaccination gives us renewed hope. We feel confident of recovery with the continued support of our shareholders and stakeholders. Please continue to keep safe by observing protocols of COVID-19.”

Balance Sheet Highlights

Margaritaville (Turks) Limited as at November 30, 2020, recorded total assets of US$4.45 million versus US$6.16 million in 2019, a 28 per cent decline. This was mainly attributable to ‘Owing by related companies’ for the period which fell to US$214,026 when compared to US$1.74 million documented in 2019.

Cash and bank balance registered an 87 per cent decrease to end at US$12,040. Additionally, development costs fell from US$79,993 in November 2019 to US$32,373 as at November 30, 2020.

However, the total asset base was tempered by a 14 per cent increase in the company’s ‘Trade and other receivables” which closed the period at US$91,456.