The Initial Public Offer of shares in VM Investments Limited the immediate parent company of VM Wealth Management (VMWM) will open on Monday December 11 and is priced at $2.45 per share.
The annual report of Victoria Building Society stated that 2016 turned out to be another record breaking year for VM Wealth Management, as net profits after taxes of $326 million surpassed the previous record of $310 million in 2015. VMWM’s total operating revenue was $808 million, virtually the same as in the previous year. Revenues comprised mainly of Net Interest Income of $248 million, gain from investment activities of $279 million and net fees and commissions of $280 million. Third party assets under management increased by $4.4 billion or 55 percent, from $8 billion in 2015 to $12.4 billion in 2016. This was due mainly to increased promotion and the introduction of our new unit trust product with 6 new portfolios – three US$ bond portfolios, one J$ bond portfolio, one local equities portfolio and a real estate portfolio.
DEVON BARRETT, MBA, is the Group Chief Investment Officer & Chief Executive Officer, Victoria Mutual Wealth Management.
The VM Investments issue is adding to a very busy December, for IPOs and this is likely to be followed January with another busy slate of Initial Public Offerings. Planned issues by Mayberry Investments that were expected in December, may be put off until January, IC Insider.com has been informed. Sygnus Capital Investments is the other that could be listed in January.
Archives for December 2017
VM Investments IPO December 11
More gains for Jamaican$
Jamaica’s foreign currency market activity returned to normal on Friday with trading at midday showing buying and selling almost even, unlike the previous two days when selling was well below buying. On Friday at midday, dealers purchased US$7.7 million at an average rate of J$125.24 and sold US$6.96 million at an average of J$125.98.
At mid-day on Thursday dealers purchased US$15.39 million at an average rate of J$125.49 while selling US$7.72 million at an average of J$126.05.
On Friday, the rate of exchange to buy the US dollar by the public, declined for the fourth time for the week to $125.98 as dealers sold US$30.35 million in US dollars, compared to US$38.51 million at an average rate of $126.08 on Thursday.
US currency purchases amounted to US$30.77 million on Friday, at an average rate of $124.73, compared to Thursday, with US$32.67 million at $125.
Dealers’ purchased US$34.27 million, versus US$42.48 million on Thursday in all currencies in Jamaica’s Forex market and sold just US$32.6 million compared with US$46.15 million sold, previously.
The selling rate for the Canadian dollar jumped to J$98.60 from J$95.16 at the close on Thursday. The selling rate for the British Pound slipped to J$169.10 versus J$169.72 previously and the euro gained value against the Jamaican dollar, moving to J$150.96 to buy the European common currency, versus prior selling rate of J$148.55.
NCB Buying 50.1% of Bermudan bank
NCB Financial Group today announced the acquisition of majority shares in the Clarien Group, a Bermudan based financial group in which Portland Private Equity holds 17.92 percent interest.
Edmund Gibbons Ltd with retain 31.98 percent of the shares. The transaction has received approval from Bank of Jamaica and the Bermuda Monetary Authority provided a no objection letter, the release from NCB states but final approval is subject to the Ministry of Finance. James Gibbons a director of the group expresses the view that the linkage will enable expansion of their offering locally and globally.
In 2016, Portland Private Equity pumped in B$$12.6 million into Clarien to meet capital needs based on tighter regulatory capital requirements as well as a swelling bad debt position amounting to 14 percent of their loan portfolio. The bank is said to have made B$$500,000 profit in 2015.
According The Royal Gazette, Clarien said its loan portfolio had shrunk by $66.8 million in 2015 to $809.7 million by the end of the year. This was attributed to a trend of borrowers paying down mortgage debt.
Clarien has more than eight decades of banking history in Bermuda and is said to be the largest bank in the country.
NCB recently raised US$250 million on the local market for regional expansion, this acquisition seems to be one that was on their radar when the funds were being raised, but based on the amount Portland injected the acquisition by NCB could cost around US$40-50 million, a mere dent in the amount they raised in the summer of 2017, but with earnings of $500,000 in 2015, unless profits picked up considerably since, which seems unlikely with the acquisition by NCB, the amount paid is most likely considerably far less.
For the fiscal year to September NCB made profit of J$19.1 billion or US$146 million up from J$14.45 billion in 2016. Gross revenues for 2017 fiscal year amounted to J$75.7 billion.
Only 1 stock fall on TTSE – Friday
The Composite Index gained 1.81 points to 1,282.26, the All T&T Index advanced 1.85 points to 1,750.94 and the Cross Listed Index gained 0.24 points to close at 109.67.
Trading ended with 189,047 shares changing hands at a value of $3,309,055 compared to Thursday’s trades of 233,449 valued at $4,648,226.
IC bid-offer Indicator| The Investor’s Choice bid-offer ended with 4 stocks with bids higher than last selling prices and 6 with lower offers.
Gains| The last traded prices of securities rising are Guardian Holdings with gains of 5 cents, to close at $16.55 with 11,300 shares being exchanged, Massy Holdings added 10 cents to settle at $49 with 26,836 shares valued at $1,314,263 trading and National Enterprises ended at $9.75, rising 5 cents with 1,765 shares.
Losses| The sole security changing hands is Sagicor Financial after losing 8 cents to close at $7.87 trading 22,496 shares.
Firm Trades| Stocks with last traded prices remaining unchanged of the close of trading are Ansa McAL with 2,028 shares at $63.03, Clico Investment closed at $21 with 6,400 stock units, First Citizens held firm at $32 with 2,147 units changing hands, Grace Kennedy ended at $3.10 trading 70,435 shares trading, L.J. Williams B closed at 70 cents with 2,000 stock units. NCB Financial Group exchanged 3,585 shares at $6, One Caribbean Media closed at $14 with 7,800 units, Republic Financial Holdings settled at $101.50 with 1,360 shares, Scotiabank remained at $60 with 590 units and Trinidad & Tobago NGL held firm at $25 trading 30,305 stock units valued at $757,631.
GWest IPO is here
The initial Public Offer (IPO) of shares in the Montego Bay based GWest Corporation is now out with 169.7 million shares offered for sale at $2.50 each. The offer opens on December 7 and is scheduled to close on December 21.
With FosRich and Wisynco opening next week as well it could result in record of 4 IPOs being opened within the same week on the Jamaica Stock Exchange. During July, Express Catering opening on July 12, Stationery and Office Supplies that opened on July 19, Proven Investments with a rights issue opened on July 3, Productivity Business Solutions with an ordinary share issue and a preference share issue that opened on July 5.
GWest offer includes 36,000,000 Shares reserved for the lead broker, JMMB Securities or its clients, 64,000,000 Shares reserved for Jamaica Money Market Brokers’ Pension and Client Funds Investment Management Unit. 19,400,000 Shares are for GWest clients and suppliers and 600,000 Shares for independent directors, the Mentor and employees of the Company. This leaves 69.7 million shares for applications by the general public. If any of the Reserved Shares in any category are not subscribed by the persons entitled to them, they will be made available for subscription by the general public.
If the Invitation is successful in raising at least J$250,000,000 and the Shares will be admitted to trade on the Junior Market of the JSE.
The primary purpose of the Company is to provide integrated medical health care services and facilities. The Company established 5 medical businesses under the common “GWest Medical” brand. GWest Corporation owns the GWest Centre, a 4-storey multipurpose commercial complex catering primarily to medical professionals and medical services and in which its owned services will be located. The GWest concept is to provide a wide range of complementary international quality best practice medical services in one location,
The Company will be providing the following medical services to complement those offered by owners and lessees in the GWest Centre:
1. General Practitioner and Specialist Suite (operational since June 2017)
2. A 2,200 square feet Urgent Care Centre (operational since November 2017)
3. Medical Laboratory (to be opened by January 2018)
4. A 5,000 square feet 8-Bed Inpatient Unit (to be opened by September 2018)
5. In addition, its 100% subsidiary company GWest Surgery Centre Limited will own and operate an 8,500 square feet Outpatient Surgery Centre (to be opened September 2018), including two modern operating theatres and two procedure rooms.
The Company has approximately 18,111 square feet of space leased to tenants for periods of 3 to 10 years with lease rates denominated in United States currency, ranging from US$20 to US$22 per square feet. The lease payments are subject to annual increases at a rate of up to 0.5% per annum.
Directors include Dr. Konrad Kirlew, chairman, Dr. Leyford Doonquah, Dennis Samuels businessman Denise Crichton-Samuels managing director of Cornwall Medical and Dental Supplies, Peter Pearson, former partner PriceWaterhouseCoopers. Elva Williams-Richard, Chartered Accountant, Wayne Gentles, Accountant, and Mark Hart Businessman and Wayne Wray who is the mentor and director.
The shares are really based of forecast which are vastly different than the historical results. For the year to March 2017 profit reported was $181 million but it includes a large gain on revaluation of the unsold property, amounting to $205 million. The profit was mainly based on income of sale of property. A loss of $29 million was made in the six months to September and for the full year to March 2018 a loss of $111 million is projected, swinging sharply to a profit of $166 million in 2019 and $388 million in 2020 as revenues rise from an estimated $158 million in 2018 to $803 million in 2019 to $1.2 billion in 2020.
Net book value is just $287 million, representing 324,848,485 shares, with net book value of just 88 cents per share, the stock is priced at 3 times book value which can be considered high for a company yet to start showing profit from ongoing operations. The stock is also priced at a high PE of nearly 7.5 times projected 2019 earnings which is way above most other stocks in the market, with a renowned operating track record.