Revenues and profitability surging

Durrant Pate/ Contributor

With the COVID-19 pandemic passing, Margaritaville (Turks) Limited (MTL) continues its strong rebound.

The entertainment and restaurant company, which is publicly listed in Jamaica but operates out of Grand Turk in the Turks and Caicos Islands was bleeding during the pandemic, as its operations grinded to a halt. However, since then MTL has been recovering strongly. 

For the nine-month period ended February 28, 2023, MTL recorded revenues of US$4.98 million, an increase of US$4 million from the US$975,061 reported in February 2022. Revenues for the February quarter amounted to US$2.20 million, up from US$974,015 in 2022. 

The management is highlighting that “revenue for the quarter of US$2.20 million represents the highest quarterly revenue ever reported by the company and resulted in an average spend rate per passenger of US$7.78.” 

Strong Q3 performance

Regarding performance over the last quarter, MTL indicated that, “a total of 283,113 passengers cruised into the Grand Turk Port for the third quarter on 85 vessels, an average of 3,330 passengers per vessel.” Cost of sales increased to US$1.33 million, up from US$245,450 in 2022, which resulted in a gross profit of US$3.65 million (2022: US$729,611). 

The management in its nine-month report to shareholders notes that “Cost of Sales (COS) ratio of 26.06% for the quarter is satisfactory given the inflationary environment that the company has been operating in. The year-to-date ratio is marginally higher at 26.64% but is trending downwards. At the 6 months mark the COS ratio was above 27.0 per cent.”

The company continues to review prices and ingredients to provide the best ingredients at the best prices for our business. Total expenses increased 110 per cent for the period under review to US$3.11 million (2022: US$1.48 million). 

The drivers of this increase in total expenses include Administrative Expenses which increased 129% to $US2.88 million (2022: US$1.26 million) and promotional expenses which increased 195% to US$26,253 (2022: US$8,887).

Returning to profitability

Consequently, MTL reported an operating profit of US$537,432 compared to a loss of US$754,844 for the comparable period in 2022. Operating profit for the quarter was US$343,589 compared to an operating loss of US$139,564 in February 2022.

Finance costs for the nine-month period was US$15,614 (2022: nil), while third quarter finance costs amounted to US$42,004 (2022: nil). The company reported no taxation charge for the period.

As a result, MTL reported a nine-month net profit of US$1.18 million compared to a net loss of US$776,593 in 2022. Net profit for the quarter amounted to US$725,182 compared to a loss of US$166,861 booked twelve months prior.

Best winter tourism season on record

The return to profitability is credited to the best winter tourism season on record with the management stating, “The winter tourist season, to date, has been one of the better ones on record. The passenger counts are nearing pre-Covid19 totals and the spending patterns are much improved. We anticipate that this will continue for the rest of the fiscal 2023 year and into fiscal 2024.”

MTL as at February 28, 2023, recorded total assets of US$5.67 million, an increase of 33% when compared to US$4.26 million as at February 28, 2022. This was mainly due to ‘Owing by related companies’ for the period totalling US$1.77 million (2022: US$ 273,108).

Total stockholders’ equity as of February 28, 2023, closed at US$3.48 million, a 51 per cent increase from US$2.30 million for the corresponding period last year. This resulted in a book value of US$0.052 (2022: US$0.034).