JFP Reports Strong First Quarter Results

  • JFP Limited’s (JFP) net profit to rose more than three folds to $34.91Mn for the three months ended March 31, 2022. 
  • This performance was driven by a 70% increase in revenues and a 8% decline in direct costs due to the increased efficiency of its operations. Revenues rose as customers brought capital projects back on stream. This resulted in gross profit increasing by 168% and its margin rising from 17% in 2021 to 33% in 2022. 
  • Administrative expenses increased by 46.4% over the period mainly due to transaction costs related to the initial public offering and fees associated with the change of the name to JFP Limited. Despite higher administrative expenses, operating profit increased by 237%. 
  • As the country continues to rebound on the back of the relaxation of restrictions by the government, JFP expects the strong performance in Q1 to continue in the coming quarters, especially as it considers the confirmed jobs in hand. It also has plans to take advantage of opportunities in the international market, whilst still paying keen attention to the domestic market. With these factors supporting the outlook for profitability, management expects to see an outturn reflective of its best year in its 37 year history. 
  • JFP’s stock price has increased by 41% since listing in February 2022. The stock closed Wednesday’s trading session at $1.41 and currently trades at a P/E of 34.9x, which is above the Junior Market Manufacturing Sector Average of 20.0x. JFP’s high P/E relative to the sector suggest that the expected growth in earnings may already be reflected in the stock price.

(Sources: JSE and NCBCM Research)