2nd buy out for Access Financial in a year

Junior market listed micro financier, Access Financial Services has acquired the loan portfolio, fixed assets and trade name of Micro Credit Limited, a release to the Jamaica Stock Exchange revealed. The acquisition is the second make by the company in just over a year.
The CEO of Access Financial, Marcus James, says “the acquisition is in keeping with the company’s overall expansion plan to grow its share of the local micro lending market. The business combination will see MCL continuing to serve the micro credit customers using its existing methodologies which have been proven both locally and internationally in that segment of the market resulting in above average portfolio performance. The alignment of the two entities will also result in efficiencies of scale.”
MCL was established in 2003 and has 6 branches islandwide. Christopher Williams, Proven Investments CEO stated earlier this month, that MCL was around the same size as Damark which were acquired by Access in May 2016 at a cost of $180 million which included, the loan portfolio of $148.7 million.
In 2015, Access acquired the loan portfolios of Asset Management Company and Appliance Traders for just over $500 million.

Junior Market drops on Tuesday

tTech, one of ICI Insider.com top selections for 2017, traded back at its 52 weeks’ high of $9.


Trading on the Junior Market returned to more normal levels on Tuesday with 2,845,419 units valued at $10,795,016, down from 9,306,111 units valued at $117,381,126 passing through the market, on Monday with Caribbean Flavours accounting for nearly 9 million shares valued at $114,648,038.
Trading ended with 14 securities versus 17 on Monday leading 6 stocks rising and 5 falling. Jetcon Corporation closed at a 52 weeks’ high and tTech closed back at a 52 weeks’ high reached in early February as selling in the stock has almost dried up. The market index dropped 33.27 points to 3,156.56, the lowest level since the market closed at 3,131.63 points on April 24 this year. The market closed with 4 stocks having bids higher than their last sale prices and 4 closed with lower offers.
The Junior Market ended trading with an average of 203,244 units for an average value of $771,073 compared to 547,418 units for an average value of $6,904,772 on the previous trading day. The average volume and value for the month to date rose to 549,408 units valued at $2,376,886 compared with 576,036 units valued at $2,500,410, previously, in contrast, May closed with averages of just 89,339 units at $596,722.
At the close of the market, Access Financial closed at $46.20 with 300 units changing hands, Blue Power dropped $5 to close at $50 with 2,700 units changing hands, Caribbean Cream rose 5 cents in trading 13,300 units to end at $7.45, Caribbean Producers gained 2 cents in trading 2,551,000 units to end at $3.05. Eppley had 2,006 units changing hands to close at $12, Honey Bun had 500 shares changing hands to close with 1 cent gain to $6.12, Jamaican Teas traded 28,514 shares and slipped 1 cent to end at $4.30, Jetcon Corporation rose 40 cents to end at a 52 weeks’ close of $15.60 with 37,154 shares trading, ahead of the stock starting to trade with a 3 for 1 split on Thursday. Knutsford Express traded 38,791 shares to end at $16 with a fall of 30 cents, Lasco Distributors fell 20 cents and ended trading 106,185 units at $7, Lasco Financial fell 15 cents with 10,270 shares changing hands to end at $3.85, Lasco Manufacturing ended with 48,300 shares trading closed at $4.55 after rising 1 cent. Main Event ended trading with 2,686 shares at $5.88 and tTech ended with 3,713 units changing hands back to the all-time high reached on February high of $9 after climbing 45 cents on Tuesday.

Berger to have new owner

Berger Paints Jamaica along with the Berger Paints in Trinidad and Tobago and Barbados will have new owners, later this year as Ansa Coatings International (ACIL), a subsidiary of the sprawling Trinidad and Tobago conglomerate, ANSA McAL Group entered into an agreement with Berger International Private Limited to acquire Lewis Berger (Overseas Holding) Limited.
Lewis Berger (Overseas Holding) owns 51% of the issued share capital in Berger Paints Jamaica. Berger Paints Trinidad and Tobago is 70 percent owned by its parent Lewis Berger and is listed on the Trinidad and Tobago Stock Exchange and last traded on June 12, at TT$4.05, but trades infrequently. Berger Paints Barbados Limited is owned fully by the parent company.
The combined Berger Caribbean business net sales is put at US$35 million, a statement by Ansa McAl states. The completion of the transaction is subject to conditions set out in the agreement between BIPL and ACIL. ANSA Coatings and its subsidiary, produces, market and distributes coatings in the categories of decorative and architectural, wood finishes, automotive, light and heavy duty industrial and marine under the following brands: Penta, Sissons, Glidden, Nexa Autocolor, Aquabase Line, Devoe and International.
Group Chairman and Chief Executive of the ANSA McAL Group, A. Norman Sabga noted that the acquisition will further enhance the Group’s position in the Caribbean architectural coatings market. “Berger is best known for its well-positioned paint brands throughout the region. The architectural coatings industry has enjoyed a period of healthy innovation over the last decade.

Carib Beer brewed in Trinidad by Ansa McAl Group

Through this acquisition, we hope to address an expanded customer base with a broader suite of product offerings and superior levels of customer service and support”, Sabga concluded.

At this stage it is unclear exactly how the new owners when the deal is concluded will move forward with the expanded paint group. The acquisition has far reaching ramification for ANSA Coatings. This means that products imported into Jamaica from Trinidad can be produced in the plant in Jamaica while the two plants in Trinidad can be merged into one, both actions would result in significant savings and improved profit margins. The Barbados could be served by exports out of Trinidad.
ANSA McAL is a diversified Public Conglomerate, listed on the Trinidad and Tobago Stock Exchange, with subsidiaries in Trinidad and Tobago, Barbados, St. Kitts and Nevis, Guyana, Grenada and the USA and involved in the manufacturing, brewing, insurance, finance, real estate, media, shipping, trading/distribution and automotive and industrial equipment retailing sectors.

Jamaica abounds with opportunities

Attentive shareholders at Jetcon recently held 2017 AGM

The successful performance of Jetcon Corporation since listing in 2016, reveals the rich opportunities that exist in Jamaica for Jamaicans to better themselves financially, chairman of the company, John Jackson said, in addressing shareholders at the company’s first Annual General Meeting, as a public company.
Jackson went on to state “ordinary Jamaicans need adequate education, need to corporate with and trust one another, share our assets in an organized manner and the sky is the limit to what can be achieved’. “Many opportunities exist for Jamaicans to profit from, however, they need to learn how to find them.” This means, with greater financial sophistication born out of knowledge, coupled with the advent and buoyancy of the Junior Market, ordinary Jamaican families can capitalize on various financial prospects that exist in the country”. The success of Jetcon and other newer businesses in the country suggests the need for an intervention of the Jamaican authorities to educate Jamaicans on the immense opportunities that exist to lift their quality of life through financial education and investments by pooling of their financial resources.
Jackson was speaking against the back drop of Jetcon Corporation’s doubling in profits for 2016 with preliminary data to May 2017, showing revenues rising by 75 percent and profit of approximately 150 percent over 2016.

Fantastic Year for Jetcon

Jetcon Corporation at listing in March 2016.

“Fantastic” was how John Jackson, Chairman of Jetcon Corporation described the company’s 2016 financial year. He assured shareholders that 2017 is expected to be even better based on results to date.
The chairman was addressing Jetcon‘s first Annual General Meeting (AGM), since being listed on the Junior Market of Jamaica Stock Exchange. The Company’s 2016 Audited Financial Statement, which was discussed and approved at the AGM, highlighted Jetcon’s the progress achieved in 2016, with the company’s performance helping to push the stock price from its initial listing of $2.25 in 2016, to $14.88 on the day of the meeting, for a gain of 570 percent. The AGM which was held at the Knutsford Court Hotel on June 14, was attended by approximately 75 of the more than 500 members of Jetcon’s shareholders and representatives from the Jamaica Stock Exchange and the media.
“When we met in at the start of January of 2016 to discuss pros & cons of listing, I was not sure we would be here today”, Chairman John Jackson confessed in his opening remarks.
The company’s 2016 revenue growth which has far surpassed the initial internal forecast of 30 percent, ended with an overall increase of 64 percent. 2016 ended with earnings per share of 54 cents and a solid 49.4 per cent average rate of return on capital which moved up 2.8 percent ahead of 2015’s 46.6 percent.
With profits more than doubling in 2016, the 2017 revenues up 75 percent in May and the preliminary profit up approximately 150 percent, the company is actively seeking additional space to expand the business.
The chairman acknowledged the enjoyed shared benefits of Jetcon being listed on the Junior Market. He noted that the listing has contributed to the growth of the company’s public relation and publicity. “The advent of the Junior Market is God sent & will revolutionize corporate Jamaica and enrich many ordinary Jamaicans”, Jackson further urged the relevant authorities to educate Jamaicans about the opportunities and benefits investing in the stock market provides for the betterment of the Jamaican quality of life and thus making Jamaica, the place of choice to live, work, raise families, and do business.
Jetcon Corporation was founded in 1994 by Managing Director, Andrew B. Jackson and opened and closed its IPO on March 14, 2016 and hold the distinction of being the first pre-owned car dealership to be listed on the Jamaica Stock Exchange (JSE).

Main Event inadequate Q2 report

Three directors of Main Event, including the mentor who is respossible to ensure compliance with teh JSE rules.

The 2017 junior listed Main Event Entertainment, made a loss in the last six months of the 2016 fiscal year, ending the year with a profit of $56 million, down from $64 million for the six months to April.
The latest figures from the entertainment company for 2017, show a profit of $75 million for the half year and $51 million for the April quarter.
The figures reveal seasonal differences in the operation, with higher revenues and profit in the first half and lower revenues and losses or minimal profit in the second half. The Jamaica Stock Exchange rules require that seasonality in operations is to be reported on, in a listed company financial report. There is total silence on this issue in Main Event’s report, leaving investors to guess what the second half will be like, it should not take the stock exchange rules to put to this. Good investors’ relations suggest that this is absolutely needed in this situation of wide variation in the two periods. Astonishingly, a review of the company’s prospectus gives no indication of seasonality of revenues and earnings.
The directors’ report accompanying the half year results, speaks to a reduction in direct expenses due to continued investment in fleet and transportation solutions, and rental equipment and human resources. At the same time administrative cost had a big increase due mainly to increased transportation and fleet management costs. It appears that these added costs should be treated as a part of direct cost and not administrative.
Revenue in the April quarter at $319 million was flat with the 2016 out turn but the half year rose 8 percent to $652 million. The data to date show no indication that the second half year results will show much if any improvement over the outcome for 2016 except for the removal of taxes.
At the initial public offer in January the issued share capital was 240,004,000 shares and 60,001,000 shares were issued to the public, resulting in an average number of shares issued for the April quarter of 300,005,000 units but only 270 million units for the half year. The report shows the fully issued number of shares at the end of April is used in computing earnings per share (EPS) for all periods.
The effect is that the reported in the interim results are wrong and in effect understated as the number of shares used in the computation is overstated. Instead of earnings per share of 25 cents for the half year it is 27.7 cents and for the 2016 period 26.8 cents and not 21 cent. The earnings for the 2016 April quarter, is 17.2 cents and for the full 2016 fiscal year 23.5 cents.
There are clearly weaknesses in the report and its handling, but worse it is also showing weaknesses in the overall management inclusive of the directorate.
The company expended over $107 million on fixed assets, increased borrowed funds by a mere $10 million more than at the end of October with cash ending at $65 million from just $19 million at the end of October.
With the interim results ending at 28 cents per share, it is going be challenging for earnings for the full year to be much higher than 35 cents IC Insider.com is forecasting for the year to October, barring a sizable rise in revenues. It could go on to earn 50 cents for 2018, IC Insider.com’s forecast shows. At the current price of $6 on the Junior Market of the Jamaica Stock Exchange the PE ratio is 17, suggesting that the price may revolve around this level for a while.

Q2 profit up 26% for CAC 2000

Air-conditioning contractor, CAC 2000 enjoyed a moderate 5.6 increase in revenues for the second quarter to April this year to $266 million, but profit climbed 26 percent after tax to $27.5 million.
Profit for the half year net of tax rose 6.5 percent to $51.6 million from an increase in revenues of 18 percent to $568 million. Earnings per share was flat at 40 cents for the half year but rose from 18 cents to 21 cents for the second quarter.
Profit before taxation just inched up in the half year to $51.4 million from $50.3 million in 2016 while the second quarter moved from $23.6 million to $27.3 million.
Gross profit margin for the latest quarter dipped to 37.25 percent from 38.3 percent in 2016 and to 35.8 percent for the half year to April this year from 37.8 percent last year. Administrative and other expenses rose to $147 million from $128 million for the half year and from $69 million to $70 million for the quarter. Interest cost dipped a tad in both the quarter and the half year ending at $7.8 million for the six months period and $4 million for the quarter.
Current assets amounted to $742 million including cash of $110 million and current liabilities of $261 million which includes accrual of $68 million for court awarded damages and provision for legal cost, while borrowed funds stood at $158 million. The issue is that the provision included for interest is far too low and when agreed to, will end up hitting the company’s profit by a tidy sum.
The stock traded at $7.50 on the junior market of the Jamaica Stock Exchange on Tuesday and has a PE ratio of 10 times earnings well below the Junior Market average of 13. The company results suggest that the business is at a fairly mature stage.

No progress for Scotia Investments

Scotia investments (SIJL) has been in transition for a long time from their original business based substantially on repos, to one based on pool funds. In the latter half of 2016 the company showed strong signs returning to pathway of growth but the latest half year results have put that on hold, at least for the time being.
A big part of the investment banker’s problem is the strangulation the Scotia Culture has placed on clients that is driving business away. Examples of this is the length of time it takes to place stock brokerage orders and its execution, or the inability now to get statement of accounts.
The company’s half year report, shows profit of $451 million for the period ended April 2017 compared to $457 million for the prior period, in 2016 from revenues of $2.3 billion, a reduction of $64 million in the corresponding period in 2016. The net profit for the second quarter to April this year, ended at $302 million, down from $339 million for the same quarter in 2016 from revenues of $1.14 billion compared to $1.19 billion in 2016.
SIJL earned 71 cents per share in the April quarter, down from 80 cents in the 2016 period and $1.07 for the half year compared to $1.08 in 2016. At the rate of growth for the half year, it looks as if profit for the full year should hoover around the $3.19 earned in 2016.
Total Comprehensive Income for the half year amounted to $546 million, compared to $663 million reported for the same period last year and for the quarter $454 million versus $468 million.
Total revenues for the six months from pool management funds fees grew 18 percent in the half year over that of 2016 while fees from pension and portfolio management, increased year over year by 34 percent.
Net Interest Income after impairment losses for the period was $685 million, a reduction of $60 million from $745 million in the corresponding period last year.
Other Revenue, comprising fee income, securities trading gains and net foreign exchange trading income, rose by $32 million to $866 million for six month period, above the same period last year, but was down slightly for the quarter to $463 million from $481 million in the previous year’s quarter.
Operating Expenses for the 2017 half year ended at $889 million, compared to $913 million for the corresponding period last year and $385 million for the April quarter versus $395 million in 2016.
Total assets stood at $67 billion at the end of April while financial assets under administration not included in the financial statements, amount $193 billion versus $169 billion in 2016
A dividend of 45 cents per share was declared payable July 20, 2017, the same amount being paid for some time. The stock traded at $36.50 on the Jamaica Stock Exchange on Friday.

JSE stocks mostly fall on Friday

Salada Foods traded at a intraday high of $11 on Friday.

Trading in the main market of the Jamaica Stock Exchange was cut in half from the levels on Thursday at the close on Friday. The market indices trended lower as the All Jamaica Composite Index declined 315.07 points to close at 260,622.24, the JSE Market Index fell 287.07 points to 237,456.38 and the JSE US dollar market index dropped 13.20 points to 200.00.
At the close of trading, 26 securities changed hands in the main market with 1 trading in the US dollar market, leading to 8 stocks advancing and 13 declining. Trading in the main market ended with 3,645,879 units valued at $88,098,872 changing hands compared to 6,887,167 units valued at just $169,323,809 at the close on Thursday. Trading in the US dollar market accounted for 57,934 units valued at US$15,021.
IC bid-offer Indicator| At the end of trading in the main and US dollar markets, the Investor’s Choice bid-offer indicator reading shows 10 stocks with bids higher than their last selling prices and 1 with lower offers.
The main market ended trading with an average of 140,226 units valued at $3,388,418 for every security traded compared to an average of 255,080 units valued at $6,271,252 on Thursday. The average volume and value for the month to date ended at 139,772 units with an average value of $4,238,293 compared with an average of 139,696 units with an average value of $4,379,939 on the previous trading day. The average volume and value for May ended at 358,008 units and $9,037,303.
In market activity, Barita Investments closed at $7, losing 2 cents with trades of 10,000 units, Berger Paints exchanged 7,127 shares at $18.75, Cable and Wireless traded 242,780 stock units at $1.25, Caribbean Cement gained $1 to close at $28 trading 12,532 shares, Carreras advanced $4, in closing at $89, with 4,347 shares changing hands, Grace Kennedy closed at $43, gaining 3 cents with 47,920 units trading, Jamaica Broilers exchanged 83,960 shares at $17.65, Jamaica Producers closed at $16, with 84,225 units changing hands. Jamaica Stock Exchange rose 20 cents to close at $7.20 trading 64,439 shares, JMMB Group closed at $21, after climbing $2 in exchanging 38,443 units, Kingston Properties closed at $11.26, after losing 23 cents with an exchange of 4,977 units, Kingston Wharves closed at $30.50, with a loss of $1.50 trading 5,684 shares, Mayberry Investments lost 1 cent to close at $5.07, in trading 800 units, NCB Financial Group gained 50 cents to close at $71.50, after exchanging 886,407 shares, 1834 Investments lost 9 cents to close at $1.45, with 10,292 shares changing owners. PanJam Investment closed at $34, after losing 70 cents with an exchange of 31,750 shares, Pulse Investments lost 50 cents, closing at $16.50 while trading 1,000 shares, Radio Jamaica closed at $1.66, with a loss of 4 cents, exchanging 793,322 shares, Sagicor Group gained 3 cents and closed at $34.38, with an exchange of 18,650 shares, Sagicor Real Estate Fund traded 40 cents lower to close at $10.40 with 28,250 shares traded. Salada Foods exchanged 101,650 shares to close at $10, after trading at a 52 weeks’ high of $11, Scotia Group closed at $42.01, with a loss of $1.79 exchanging 276,255 shares, but closed with the bid at $43.75 to buy just 100 shares, Seprod lost 40 cents to close at $29.50 trading 2,454 shares, Sterling Investments gained 40 cents to close at $15.50, with an exchange of 10,150 units while Supreme Ventures lost 1 cent to close at $7.49, with 27,681 shares changing hands. Proven Investments lost 0.04 US cents exchanging 57,934 ordinary shares to close at 24 US cents and JMMB Group 7.5% preference share closed at $1.15, with trades of 850,784 units.

 

16% rise in Scotia Group Q2 profit

Scotia Group reports a 14 percent increase in profit compared to the period in 2016. The banking group added $718 million more in profit to $5.7 billion for the six months to April 2017 over 2016.
Net income for the second quarter rose 16 percent to $3.4 billion, versus $2.94 billion in the same period in 2016. Total revenues for the April quarter amounted to $16.7 billion while in 2016 the group generated revenues of $11 billion while revenues for the six months ended at $23 billion versus $21 billion.
“The positive movement was achieved through increased loan and transaction volumes across our business lines,” the Group stated in a report accompanying the results. Net interest income after impairment losses for the six month period was $12.2 billion, $399 million or 3 percent above the same period in 2016
Net fees and commission income amounted to $4.4 billion, driven by higher transaction volumes and the growth in our credit card, merchant services, and asset management business. Insurance revenue increased by 31% given the growth in core insurance business and actuarial reserve release from changes in assumptions on valuation of the portfolios. Net gains on foreign currency activities and financial assets amounted to $1.3 billion based on trading volumes,” the Group stated.
Operating Expenses amounted to $11.1 billion for the six month period, an increase of $300 million or 3 percent compared to prior year. Salaries and staff benefit costs increased by $201 million, which was offset by lower other operating expenses of $87 million. Asset tax increased by $112 million or 12% to $1.1 billion due to the increase in the Group’s assets.
Impairment losses on loans amounted to $975 million, up $367 million from last year as higher write-offs on unsecured retail loan portfolio grew by $7 billion or 4 percent year over year, with loans after allowance for impairment losses, increasing to $164.2 billion.