Revenue up by a mere 1% in 2022 in spite of the rental rate increase

Durrant Pate/ Contributor

Real estate company Stanley Motta Limited (SML) could have ended 2022 in the red had it not been for an increase in rental rate.

In spite of the increase, the company ended the year only with a 1% increase in revenue, which closed at J$499.37 million compared to J$492.62 million in 2021. For the fourth quarter ended December 31, 2022, revenue went down by 0.01%% to J$125.95 million in 2022 compared to J$125.95 million in the previous year.

The management reports that the marginal revenue growth was as a result of “an increase in rental rates for a third of the space and the net effect of a movement in the Jamaican dollar during the year.” 

Administrative expenses were relatively flat at J$179.77 million (2021: J$179.61 million), while other operating income totalled J$11.79 million (2021: J$40.13 million).

Net profit up for the year

Net profit for the year went up by J$50 million to J$848.58 million (2021: J$798.30 million) after incurring taxes of J$9.99 million (2021: $4.95 million). Net profit for the last quarter dropped to J$674.88 million from J$714.31 million in 2021.

Total comprehensive income closed the year at J$840.57 million, down from the J$877.29 million recorded for 2021, while total comprehensive income for the December quarter was down to J$699.32 million relative to J$721.39 million in 2021. Finance costs of J$89.65 million (2021: J$102.92 million) were recorded for the period while for the last quarter, finance cost almost tripled to J$32.91 million, up from J$11.40 million booked during the comparable period in 2021.

Stanley Motta explains that, “finance costs of J$74.4 million for 2022 includes a one-time cost relating to the refinancing of the USD loan. It also includes non-cash adjustment relating to IFRS 16 (Leases).”

Revaluation gain on investment property grew 11% to J$616.83 million compared to J$554 million in 2021. As such, profit before tax grew 7% to J$858.57 million for the year relative to J$803.25 million in 2021. 

As for the December quarter, pre-tax profit closed at J$681.11 million versus J$715.13 million in the prior corresponding quarter. Earnings per share (EPS) for the year totalled J$1.12 (2021: J$1.05). 

Balance Sheet at a glance

Stanley Motto’s stock price closed trading on Wednesday (April 26, 2023) at J$5.80 with a corresponding P/E of 5.18 times. As at December 31, 2022, Stanley Motto had total assets of J$7.19 billion, up from J$6.52 billion in 2021. 

The increase in total assets was as a result of the increase in ‘Investment Property’ which increased to J$6.86 billion in 2022 from the J$6.17 billion booked in 2021. Shareholders’ Equity of J$6.08 billion was reported (2021: J$5.43 billion), which resulted in a book value per share of J$8.02 (2021: J$7.17).