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Remittance inflows to Jamaica hit a record for January, with total inflows of US$255.5 million this year following an increase of US$9.5 million or 3.9 percent in total of US$246 million in 2024.
The previous best January for inflows was in 2023, when total inflows amounted to US$248.6 million, data released by Jamaica’s Central Bank show. Remittance inflows to Jamaica in 2024 amounted to US$3.358 billion.
Shares of Atlantic Hardware and Plumbing were listed on the Junior Market of the Jamaica Stock Exchange on Friday, with trading in 1,024,225 between $1.10 and a low of 83 cents when trading in the stock was halted for breaching the exchange circuit breaker rule, with the price having dropped 17 percent to 83 cents from the $1 IPO price.
At the halting of trading in the stock, ahead of the suspension just after 10 this morning, only one share was traded at 83 cents and 2,050 above $1 at the start. Demand for the stock was slow and selling lukewarm, with 1.409 million shares on offer for sale.
Trading will resume three minutes after 11 this morning. Atlantic brings listing back to 48, following the delisting of tTech recently.
Since 2010, around 60 companies have listed shares on the JSE with new shares to the public. The vast majority of them split the shares to facilitate meeting the JSE rules or for greater liquidity of the shares. One would have thought that qualified accountants would by now be fully conversant in computing the correct number of shares and the average where applicable, thus computing the correct earnings per share. That is not the case. The JSE gets and vets financial reports and is clueless about what is happening with many of the financial reports put out by companies. If they did, they would not allow Omni Industries to report critical information that is incorrect in their financials for three quarters without revisions, now the audited statements have also incorrectly reported it.
Omni did so for their quarterly reports since listing in the early summer. Their auditors compounded the error by issuing financial statements with serious errors.
In February last year, the company converted 20.09 million shares into 2.25 billion units by splitting each issued stock. In May, 250 million new shares were sold to the public, increasing the total issued shares to 2.5 billion units and the weighted average to 2.47 billion units. In a strange twist, the company reported an average number of shares at just 1.402 billion units, a figure the auditors have unfortunately used as well.
The critical factor is that the earnings per share are overstated. This is crucial as many investors use EPS to value stocks. The market average is now around 15 2024 earnings, so at 9 cents, some may consider the stock to be undervalued at 94 cents, it traded today. If the correct EPS of 5 cents is used, the stock would be valued at nearly 21 times 2024 earnings and is well above the market average, too vastly different pictures.
In addition, neither the company nor the auditors have reported the appropriate earnings per share for 2023 nor the correct average number of shares issued.
Accounting standards require that the average number of shares in issue is the weighted number of shares outstanding during the period. The company split the 20.9 million shares before the IPO into 2.25 billion units; as such, the average issued shares cannot be less than this plus the average for the new shares issued.
The audited report shows a profit of $127 million and an EPS of 9 cents for 2024. In reality, EPS for 2024 is around 5 cents and 6.7 cents for 2023.
In another matter that is not related to Omni, auditors are computing deferred taxes at 25 percent on revaluation surplus on land and buildings. That would be in order if gains on disposal of land and buildings were taxed at the rate of income. Such an application is blatantly incorrect as the only amounts that will be taxed would be amounts relating to capital allowances already claimed on buildings and not lands. The applicable tax would be a transfer tax, which is at a far lower rate than income tax.
Only 500 million shares were offered at $1 each of which just 100 million units were earmarked for the general public. Applications for all reserved shares have been fully allotted. The General Public pool was oversubscribed and applicants will be allotted the first 100,000 shares applied for and 64.48 percent of the balance, JMMB Securities, the brokers for the issue stated in a release on Friday.
The shares are expected to be listed and begin trading on the Jamaica Stock Exchange Junior Market by April 4, the JMMB Securities release stated.
Despite the fall in December last year, remittance inflows into Jamaica continue to be resilient with just a 0.4 percent slippage to US$3.357 billion, compared to the inflows of US$3.37 billion in 2023. Inflows for 2024 are the lowest in four years but remain well above the U$2.98 billion inflows in 2020, the year of a major surge that pushed the amount just under the $3 billion mark it has been at since that year.
Jamaica’s decline in 2024 compared adversely with growth of 8.6 percent for Guatemala, 2.3 percent Mexico and 1.7 percent for El Salvador, the Bank of Jamaica (BOJ) release disclosed.
According to the data released by BOJ remittances in 2023 amounts to 17.4 of the country’s GDP and is down from 24 percent in 2021.
Total revenues excluding expected credit losses for the year ended January 31, 2025, grew by $2.2 billion to $17 billion, for an increase of 14.9 percent over the prior year period, primarily driven by growth in loans leading to an increase in net interest income of $1.1 billion or 10 percent as well as an increase in other revenue of 26.2 percent.
Other income, other than interest income, increased by $1.2 billion or 26.2 percent. Net fee and commission income for the period amounted to $2.2 billion. an increase of $672 million or 42.9 percent, primarily driven by the higher volume of client transactions and activities.
Total loans increased from $275.7 billion to $313 billion, an increase of 13.3 percent over the $276 billion in January 2024 but flat with October last year. Growth over January 2024 “includes a 12 percent increase in Scotia Plan personal loans and a 24 percent increase in mortgage loans. Commercial loans also increased by 5 percent over the prior year period,” the release from Scotiabank stated
The Board of Directors approved a dividend of 45 cents per share for the first quarter, payable on April 17, to stockholders on record at March 26.
Atlantic Hardware & Plumbing Company, a 30-year-old wholesale distribution company is offering 499,999,800 shares at $1 each for subscription. Just 200 million will be available to the public as JMMB Group is set to convert loans into shares. The shares are slated to be listed on the Junior Market of the Jamaica Stock Exchange. The company with a staff complement of 35 is located at 105-107 Marcus Garvey Drive. The issued share capital is currently 1.95 billion ordinary units. Construct Group owns 975 million units, Lumber Depot 682.5 million units and General Accident 292.5 million shares. The offer opens on the 27th of February and is scheduled to close on the 13th of March and will most likely close well ahead of the closing date, with only 100 million available for the general public.
The lead broker is JMMB Securities, an affiliate, the holder of a convertible bond, is entitled to exercise the conversion option for up to 300 million shares at $1 per share.
The net proceeds of $470 million will be used to repay debt, this includes the conversion of JMMB convertible bond representing 300 million units.
At the end of September last year borrowed funds surged to $1.34 billion compared to just $177 million at the end of 2023 as the company embarked on a share buyback, in a classic engineering exercise to get it to fit into the Junior Market capital size.
Revenues in 2023 amounted to $1.4 billion with a profit of $147 million before tax. Revenues declined from the 2021 and 2022 levels of $1.67 billion with profit before tax of $318 million and $290 million respectively. Revenues of $440 million were generated in the September quarter up 30 percent from $339 million in 2023 and for the nine months to September, revenues climbed by 12 percent to $1.23 billion from $1.1 billion in 2023. Profit for the quarter before taxation was $18.7 million versus $69 million and for the year to September 2024 – $84 million compared with $236 million in 2023.
In January, this year, Atlantic sold real property on Ashenheim Road in Kingston. The net sale proceeds will be used to repay approximately $230 million of existing indebtedness. Borrowed funds should fall to around $200 million from the combination of the IPO proceeds and internal funds. Accordingly, interest cost that was $48 million in the September quarter should drop around $20 million annually.
The PE ratio works out at 12.5 times earnings which is unlikely to move the stock much with the market average currently around 13 but there several that are trading above 15. This is not one those companies that has a great future ahead of it and most investors should look elsewhere for better prospects.
Remittance inflows for 2024 to November amassed US$3.059 billion, an increase of just 0.1 percent over the similar period in 2023. It seems set to exceed the US$3.3 billion generated in 2023. If achieved, it would be the first year since the massive increase in 2021 that there has been an annual increase.
A total of 326 bids were received by the central bank amounting to $62.42 billion, with rates ranging from 7.98 percent down to 5.5 percent. The highest submitted bid had a rate of 7.90 percent, but the highest rate obtained by successful investors was 6.2 percent. Today’s rate is up from 5.94 percent at last week’s auction when only $6.5 billion was offered, with bids of just over $32 billion.
At the end of the auction the total amount of 30 days CDs that are outstanding amounts to $126.5 billion and is down from $129.5 billion last week.
Remittances inflows to Jamaica which ended at US$2.4 billion in 2019 surged to US$2.9 billion in 2020 peaking at US$3.497 billion in 2021 and have remained above $3.3 billion since and are on track to match the US$3.37 billion received in calendar year 2023.
“Remittances from the United States accounted for 67.7 percent of total flows, down from 69.5 percent share recorded for October 2023. Other source countries which contributed a notable share of remittances for the month were the United Kingdom 11.0 percent, followed by Canada 10.7 percent and the Cayman Islands 6.2 percent”, data released by Bank of Jamaica (BOJ) show.
“Jamaica’s decline of 0.1 percent for the calendar year to October 2024, compares to growth of 8.6 percent, 2.3 percent and 0.8 percent recorded for Guatemala, Mexico and El Salvador, respectively, BOJ stated.