Lasco Distributors shocker
The company advised that the formal order was signed by Justice Vivene Harris and filed on November 24, 2017. LASD has further advised of the Company’s intent to file an appeal.
The amount awarded for damages and interest up to November 3, 2017, is way below the US$311 million the company claimed plus interest.
At the time of the Initial Public Offering in 2010 the prospectus stated “no provisions have been made in the Company’s accounts for the impact of the outcome of this decision and the accounts contained in this prospectus do not take it into account. It is the expectation of the Company, based on legal advice it has received, that its lost sales of the product to date (estimated to be $400 million) are likely to be recovered in the event that it succeeds in this matter but it is difficult to quantify the amount of damages that could potentially be awarded to the Company as they will continue to accrue until the matter is decided.
The amount awarded which should be profit that would have be lost as a result of the loss of sales may not in reality be far from the profit lost to 2010 but there would be loss of sales thereafter.
Last week, Lasco Distributors advised the Jamaica Stock Exchange that a director sold 2,042,774 shares on November 11, and on November 24 that a directors sold 21,054 shares during the period November 13-14, 2017.
CrediScotia buyout to boost LasFin’s profit
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.
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 Insider.com 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 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
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.
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.
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
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 Insider.com 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.
Bulls take charge of Exchange Place
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.