CrediScotia buyout to boost LasFin’s profit

Lasco Financial

Lasco Financial Services doubles its $500 million loan portfolio with the acquisition Scotia Jamaica’s Micro Finance Company Limited which trades as CrediScotia. According to a release from Lasco “the deal was executed on Monday November 13 upon the signing of the share purchase agreement.” 
CrediScotia is a wholly owned subsidiary of Scotia Group Jamaica which entered the Microfinance sector in November 2011 and currently serves its customers from its seven branches islandwide.
Jacinth Hall Tracey, Managing Director of LFSL explains that the move is part of a larger strategic plan for Lasco Financial to continue its focus on expanding its loan portfolio.
“It is a great opportunity for Lasco Financial Services. We have been developing opportunities incrementally to serve our customers who are in need of micro financing, this move immediately gives us the reach and scale as we will immediately double our loan portfolio and number of clients as well as branches across the island. This merger allows us to maximize on the synergies of both companies and will create one formidable company.
CreditScotia will become a wholly owned subsidiary of LASCO Financial Services and will continue to operate independently of the LFSL Group.

Lasco Financial profit jumped sharply for 2017 Q2.

As such, the acquisition will not see any disruption to the business, employees or clients, the release from Lasco stated. That will only be for a while to allow things to settle, eventually, the attractiveness of economies of scale and the savings to be reaped will be too enticing to be ignored.
The consideration was not announced but could be in the region of $500 to $1 billion.
Lasco Financial recently reported profit of that more than doubled in the September quarter, from $44 million to $100 million with the six months results showing profit of $167 million versus $102 million in 2016. The company saw revenues rising to $396 million form $272 million in the second quarter and $715 million for the half year, from $533 million in 2016. While revenues grew rapidly in the period cost were contained well below increases in revenues. For the full year to March 2017, Lasco made net profits of $192 million.
IC forecast was for earnings of 30 cents for this year and 60 cents for the next fiscal year, but this latest move would push earnings higher with 2018/19 enjoying a full year of benefits. At the end of September Lasco had loans and receivables of $1 billion on its books and cash funds amounting to $480 million.
Lasco’s stock closed trading at $4.90 on the Junior Market of the Jamaica Stock Exchange on Tuesday.

Supreme Ventures jacks dividend to $844M

Supreme Ventures has pushed up the dividend payment fresh after the major changes in ownership and recent board changes to $844 million.
The new board declared an interim dividend of 14 cents per share payable on December 4, 2017 to shareholders on record as at November 20, 2017 and a special dividend of 18 cents per share to be paid on the same day as the interim dividend. The ex-dividend date will be November 16. On august 9, a dividend of 16 cents was paid and 14 cents per stock unit was paid on May 31.
The new directors who were appointed to the board effective October 23, following increased ownership by Mayberry West Indies Limited to 8.56 percent, Bamboo Holdings of 1.2 percent and Mark Berry to 1.05 percent of the company are Ansel Howel, Christopher Berry, Gary Peart. Paul Hoo former chairman of the boards resigned as the company’s chairman on the 4th of November.

Paramount adds chlorine & bleach

Paramount Trading expanding into Chlorine and bleach processing.

Paramount Trading is expanding its operations by offering chlorine and bleach products for contract manufacturing, the company reported.
“The Company recently completed construction of the infrastructure required for a new chlorine and bleach plant at its 6 East Bell Road, Kingston 11 location, which will be outfitted with state of the art equipment and advanced technology.
The Company plans to commence operation of the plant in February 2018,” the release from the company states.
The Company also advises that on 26 October 2017 it entered into an Asset Sale Agreement to acquire bleach plant equipment and other assets from Seprod, for its new chlorine and bleach operations. This acquisition is in line with the Company’s goals to continuously strengthen its presence as a manufacturer in the chemicals market, and will complement the Company’s existing offerings.
Paramount Trading, enjoyed a big turn-around in profit for the first quarter to August this year, with an increase of 126 percent, to $34 million from a 31 percent increase in revenues to $331 million.
The directors’ report that accompanied the August quarterly results stated that they have “an optimistic outlook for the rest of the year and is very excited by the opportunities that will be realized. The construction of the blending plant and laboratory, in conjunction with Alllegheny Petroleum is slated to be complete during the next quarter.”
The stock currently trades at a PE ratio of 15 with the price at $3 on the Junior Market is in against the line with the market. What is true, is the nimbleness of management to identify new income generated opportunities that makes staying close to the stock potentially profitable.

Lasco Distributors drop to $7

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Lasco Distributors shares dropped to $7 with 257,123 units trading after the courts handed partial judgement in its case for damages against Pfizer resulting from an injunction from selling the drug Salts of Las Amlodipine in 2005.
Lasco’s claimed US$300 million but the court is saying that the amount is too high based on the evidence presented.
In an interview with Lascelles Chin in 2014, he confirmed that the amount was sales estimated to be lost. In such cases the amount to be claimed would be loss of profits. From all indications, the loss is unlikely to be more than 50 percent of this amount. Based on the exchange rate of J$59.06 used to compute the inventory losses from disposal of the drug for Medimpex, the loss is likely to be priced using this rate with interest to be computed at the local interest rates.

Lasco damages to be computed

Lasco Distributors who won the case against Pfizer for damages resulting from an injunction preventing Lasco from selling Salts of Las Amlodipine in Jamaica from 2005 until 2014 is awarded J$155,738 for disposal of inventories.  
The major part of the claim, that of loss of profit, is to be computed and presented on the November 24. The court awarded interest to be computed at a rate of 8.23 percent from 2005 to 2017 on the disposal of the inventory at the time the injunction was made.
Medimpex has been awarded US$77,000 to be converted at the rate of J$69.06 to the US dollar, for inventories with interest to be computed. The Judge states that the claims by the two Jamaican firms are too high based on the evidence while the amount suggested by Pfizer was too low. Lasco’s claim was for US$300 million in lost sales plus interest and cost and Medimpex US$15 million.  The award for partial damages was handed down by Justice Viviene Harris today after presentations by Pfizer, Lasco and Medimpex, a third party to the claim.
Lasco who won the case in the Jamaican courts ultimately won the matter after Pfizer appealed the decision to the Privy Council in the UK. Based on the ruling Lasco resumed sale of the product in 2012.
The suit claimed that Pfizer was the registered proprietor of Jamaican Patent No. 3247 granted by the Governor General of Jamaica on the 22nd January, 2002 to Pfizer’s agent, Maurice Robinson for the protection of the invention “Salts of Amlodipine/Amlodipine Besylate. Robinson assigned the Patent to Pfizer on the 22nd March 2000.
The Company began to sell “Las Amlodipine” which contained Salts of Amlodipine in Jamaica in May, 2002. In 2003 Pfizer joined the Company in a suite that Pfizer had commenced in Jamaica in 2002 under action No. P040 of 2002, to protect its rights under the Jamaican Letters Patent and the Company was constrained to cease selling Las Amlodipine by an injunction granted on the 31st March, 2005 in that action. The weight of the defense mounted by the company was that under the provisions of the Patent Act of Jamaica, the Jamaican Patent was not in force when the Company started to market its own product, Las Amlodipine since an earlier patent No. 18266 granted to Pfizer in Egypt had expired on the 30th March 1997.

Lasco Distributors products.

The court in 2009 found that the case for Pfizer for an infringement of Jamaican Patent No. 3247 failed for the reason that it was not valid and subsisting because Letters Patent 19266 for the same substance filed in Egypt in March, 1987 had expired on March, 1997 prior to the grant of Letters Patent 3247 in Jamaica on 22nd January, 2002. For this reason the court gave judgment in favour of the Company.
Lasco had previously committed to pay a portion of the amount to shareholders as dividend but has so far not stated the likely amount.
Lasco Distributors is listed on the Junior Market of the Jamaica Stock Exchange and traded at $8.01 on Thursday and was priced for a big settlement.

Jamaica’s unemployment chopped to 11.3%

More Jamaicans were employment in July this year, than those that did a year ago, accordingly 29,200 or 2.5 percent more persons gained employment by July, raising the total persons employed to 1,216,200 up from 1,187,000, recorded in July 2016.
Increased employment, resulted in the unemployment rate for July 2017 declining to 11.3 percent, 1.6 percentage points lower than the rate of 12.9 per cent for July 2016 and is also down from the 12.2 percent achieved in April this year, The decrease was driven by a decline in the unemployment rate for both males and females.
The unemployment rate for males decreased from 9.5 per cent to 8.0 percent while that of the female decreased from 16.9 per cent to 15.2 per cent. The size of the July 2017 labour force increased over the corresponding period in 2016 with the number of persons in the Labour Force being 1,371,200 persons, an increase of 8,000 (0.6 percent) compared with the 1,363,200 recorded in July 2016.
This report presents the key findings of the July 2017 Labour Force Survey which was conducted during the period July – September 2017 with the reference week being June 18 -24, 2017.

Employ,ment increased strongly in the hotel sector.

According to Statin, the occupation group ‘Service Workers and Shop and Market Sales Workers’ showed increase employment of 8,400 persons (3.1 percent), between July 2016 (269,200) and July 2017 (277,600). The group ‘Skilled Agricultural and Fishery Workers’ increased by 8,300 persons from 188,600 in July 2016 to 196,900 in July 2017.
The industry group “Hotels & Restaurants Services” increased by 11,000 (11.4 percent) moving from 96,400 in July 2016 to 107,400 in July 2017. The largest increase in the number of males employed (6,800) was in the industry group “Agriculture, Hunting, Forestry and Fishing” moving from 145,200 to 152,000 representing a 4.7 per cent over the period. For females, the industry group “Hotels & Restaurants Services” accounted for the largest increase of 8,300 (14.9 percent) over the period, moving from 55,700 in July 2016 to 64,000 in July 2017.

Carib Cement Q3 profit $748m

Carib Cement silos.

The Jamaican based Caribbean Cement, sole producers of cement in the country, is reporting profit of $748 million after taxation of $99 million for the September quarter.
Profits arose from revenues of $4.18 billion, up from sales of $3.68 billion in 2016, due mainly to a 15 percent increase in volume sales locally. The result compares to a loss of $81 million in the similar quarter last year. For the nine months to September, profit after tax ends at $1.8 billion versus $973 million in 2016 and well ahead of the $1.3 million reported for the 12 months to December 2016. Revenues for the nine months, amounted to $12.26 billion, up from $12 billion in 2016.
Cost were mostly kept within the levels incurred in 2016 except for a sharp increase in fuel and electricity cost that jumped from $530 million to $759 million in the quarter and moved from $1.87 billion to $2.2 billion for the nine months, but repairs and maintenance fell to $254 million from $358 million in the 2016 third quarter but was slightly down for the nine months at $650 million.
Cement ended the quarter with cash at $1.6 billion after $1.57 billion was expended on additional fixed assets.
Earnings per share for the quarter amounted to 88 cents and $2.13 for the nine months, with the full year looking to exceed $3. Importantly, the results should be looked at not so much for the out turn for 2017, but what it means for full year earnings in 2018. IC expects demand for cement to continue to rise as the economy gathers steam and the company renegotiates the leasing arrangement for equipment that is expected to lower the cost in that area going forward, pushing earnings well over $4 per share. The stock closed on the Jamaica Stock Exchange on Wednesday at $29.01.

Is war about to break out for SVL board room?

War seems about to break out over board room composition at Supreme Ventures, as the largest block of shares in the company, recently underwent a major ownership change.

Accordingly, the current board issued a release on the matter today. The board noted the recent reports of the $2.9 billion block share transaction buy out of Supreme Ventures Limited (SVL), by Zodiac International Investments & Holdings Limited and Mayberry Investments.
The company confirms that it has received correspondence from Mayberry West Indies Limited for an Extraordinary General Meeting (EGM) to pass a resolution to remove seven current members of the SVL Board.
The current list of Directors include SVL’s Chairman, Paul Hoo, as well as Peter Chin, Richard Foreman, John Graham, Steven Hudson, Ian Moore and James Morrison.

Mayberry crossed 40m C&W shares.

The letter, sent jointly under the signatures of Mayberry West Indies’, Castries, St Lucia, Bamboo Holdings Limited and Konrad Mark Berry, also outlines the intent to appoint seven (7) new Directors to the SVL Board, namely Christopher Berry, Gary Peart, Nicholas Mouttet, David McConnell, Peter McConnell, Ansel Howell and Lance Hylton.
In acknowledging the developments, Chairman Paul Hoo stated, “We have been made aware of the intent of major shareholders to have the EGM and effect some changes at the Board level. The discussions are ongoing, and as such I cannot comment too much at this time. What we can definitively say is that the SVL Board holds the interest of its shareholders as paramount, and even as we deal with the issues arising out of these developments, we are reiterating our continued commitment to exercise our fiduciary responsibility to all shareholders, as well as to protect the image and reputation of our company and our committed team.”
According to SVL President & CEO, Ann-Dawn Young Sang, “Our dedicated team continues to remain focused to build and grow our great company.”
There have been recent reports in the media of the significant shareholder transactions in the last couple of weeks. Based on these transactions, the ownership interest of SVL’s major shareholder, Zodiac Caribbean Ventures Limited – former name, Intralot Caribbean Ventures Limited – (ICVL)) has been reduced from 49.896 percent to 38.3245 percent. ICVL will now be fully owned by Zodiac International Investments & Holdings Limited a company registered in St. Lucia. Mayberry is said to have recently picked up a block of 300 million units or around 11.375 percent of the company’s shares.

Bulls take charge of Exchange Place

Bulls at large in down town Kingston again

The Main Market of the Jamaica Stock Exchange closed at another record on Friday with 21 securities changing hands in the main market and 3 in the US dollar market and 22 in the Junior Market.
At the close, the JSE All Jamaican Composite Index jumped 8,028.94 points to a record close of 313,990.54 and the JSE Index to surged 7,315.27 points to 286,080.89. The Junior Market rose 48.58 points to end the week at 3,034.13. The US dollar Index fell 2.29 points to 183.01.

Friday’s move pushed the market outside of the medium term channel it has been trading in since 2014 and if the price of NCB holds, the break out for the market will be significant as it move on to the 360,000 points level.
NCB Financial traded at a new record of $107 and is ahead of the $102 it traded at in Trinidad on Friday, up until today it trailed the price of J$100 it was trading at in the twin island state. Berger Paints traded at $14, after news broke on Thursday that only 6.6 million shares were sold by minority shareholders to Ansa Coating following the company’s mandatory offer of $10.88 per share. Attempts were made to trade it as high as $17.50 but the price exceeded the 30 percent limit it could trade at for the day and was cancelled at the close of the market. Trading closed with bids to buy Berger ranging from a low of $11.02 to a high of $14 to purchase 259,773 shares, 204,458 units are on sale from a low of $16.75 for 41,583 units to mostly 89,388 at $22.
For the year to date, the All Jamaican Composite Index is up 49.4 percent and the JSE Index 48.8 percent.
In the foreign exchange market at midday dealers bought US$13,372,228 at J$127.31 and sold US$11,367,821 at J$127.74.

J$127.77 mid-day rate for US$

Authorised dealers bought US$9,913,199 at an average rate of J$127.137 up to mid day on Thursday and sold US$5,243,960.45 at an average of J$127.769.

On Wednesday at midday, the selling rate of the US dollar was $127.85, with US$12 million being sold. In Thursday’s session dealers bought C$6,640,074 at J$102.817 each and sold just C$98,944.26 up to the same time.