SOS dividend consideration sends stock price flying

Stationery & Office Supplies announced that the board of directors will consider the payment of a dividend at a meeting to be held on August 9, 2022 and with the stock price closing at a 52 weeks’ high of $15 and seems to be heading higher.
The company last paid a dividend of 16 cents per share on December 7 last year. The early announcement caught the market by surprise as investors bought 303,359 shares up to a 52 weeks’ high of $15, with the stock closing with the bid at $15.84 and the offer at $17.90 and gaining 135 percent for the year to date.
The likely early payment is signalling that the company could be switching to twice a year payout as well as the fact that the good results evident in the first quarter is continuing into the rest of the year.
Some observers are of the view that the dividend announcement by itself was unlikely to move the stock price by the amount in today’s trading and think investors are sensing a stock split.

SOS to make early dividend payout

With the stock price having risen and seems set to go higher the price is clearly entering into a split territory, considering that there are just 250 million shares issued with the top 10 holdings accounting for 90 percent and leaving only about 25 million units that are likely to trade short term. The possibility of a stock split coming up for discussion at the meeting considering a dividend seems probable but such an action if it were to occur would have to be communicated to the Jamaica Stock Exchange ahead of any meeting at which it was to be approved.
The March quarter profit rose 90 percent to $105 million over that for 2021 and ICinsider.com forecast earnings of $1.70 for the current year.

Barita to pay $666M in dividend

Barita Investments will be paying an interim dividend of 54.6 cents per stock unit on June 30, 2022, the company advised.

The company’s Board of Directors approved a Resolution on June 9, 2022, for the payment to shareholders on record at the close of business on June 23, 2022, and will cost $666.3 million.  The stock will trade ex-dividend on June 22, 2022. The company last paid a dividend of $3.029 per stock unit on October 7, last year, to shareholders on record at the close of business on September 23, 2021.

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Elsewhere, Scotia Group reported financial results with a net income of $4.4 billion for the six months ending April 2022, down from $4.48 billion in 2021 for the same period.
The Directors of Scotia Group approved a dividend of 35 cents per stock unit in respect of the second quarter, payable on July 20, to stockholders on record on June 28. The dividend amounts to $1.09 billion amounting to 42 percent of the profit on 83 cents per share in the April quarter.

Caribbean Cement and poor management

Investors entrust capital to public companies with the expectation that their interests will be properly protected, but that does not appear to be the case with local investors at Caribbean Cement Company. Last year against to outcry of local investors the company rammed through fees for royalty to be paid in addition to management fees already be paid to Cemex, the ultimate parent company.

Caribbean Cement proposed a $1.50 dividend per share in August

Last month, the company proposed a meeting to consider the payment of a dividend that was not managed appropriately by the company, neither before nor after the meeting.
The Board of Directors Caribbean Cement Company advised shareholders that a meeting of the board that was held on May 26, 2022, recommended presenting an ordinary resolution to shareholders to declare a final dividend of $1.5032 per share payable on August 15, 2022. 
That is a great development, considering the company last paid a dividend in 2004, but the wider public was deprived of such price sensitive information. To compound the problem, the company haled the meeting and kept the information for a week before communicating the decision to the exchange, even though the rules require immediate release of the decision immediately after the meeting.
In an article reporting the decision of the board, the company through its secretarial department took issue with the article stating that they seem to have breached the JSE rules that require that any meeting to consider the payment of a dividend must be communicated to the JSE at least 7 days ahead of the meeting. So far no such notification was posted on the Stock Exchange’s website up to Tuesday evening.
The company provides the evidence of two letters addressed to the Jamaica Stock Exchange notifying that a meeting would be held initially on May 23 another dated May 20 indicates a change in the date to May 26. None of these letters are yet on the Jamaica Stock Exchange’s website.
A spokesperson at the JSE confirms that the letters were in fact received but that it is the responsibility of the respective companies to ensure that the notice is uploaded to the JSE portal from which the relevant staff would approve the same to be uploaded to the website.
While the JSE was informed by letter technically, the company is in breach as they did not follow up to ensure the information was received and in fact posted to the website what was very sensitive information considering this is the first time that the company would be considering a dividend payment since 2004 when they last paid one amounting to 7 cents per share amounting to $60 million.
Based on the price movement in the market last week it appears that the information was already in the market.
While Caribbean Cement cannot escape responsibility for the matter not being communicated to its shareholders on a timely basis, The JSE cannot escape some blame either. Once the letters were received they should have followed up with the company since it was not on the portal.
No one seems to be following up on electronic communication in this modern era. The handling above, epitomizes, what seems like today’s communication practice that assumes once an email is sent, the other party must have read it, and therefore there is no need to follow up.
Cement traded at $67 on the 16 of May, the next day the last price fell to $64.80 and then to $61.50 on the 18, bouncing to $63 on May 19, but back to $60.51 on the May 24. On the 26 and the 27, the price moved up to $63 and moved to $69.70 on the first of June and traded at $66 on June 6, and jumped to $74 on the 7th.

Big dividend payout by Caribbean Cement

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Caribbean Cement Company is set to make a sizable dividend payment in August. The Board of Directors advised that a meeting of the board that was held on May 26, 2022, recommended to present an ordinary resolution to shareholders to declare a final dividend of $1.5032 per share payable on August 15, 2022. 
The proposed payment represents 29.475 percent of the profit of $5.10 per share for 2021. The proposed record date is August 4, 2022, with an ex-dividend date of August 3rd. The recommendation will be made to shareholders at the Company’s next Annual General Meeting.
The company seems to have breached the JSE rules that require that any meeting to consider the payment of a dividend must be communicated to the JSE at least 7 days ahead of the meeting. So far no such notification was posted on the Stock Exchange website.
The payment if approved would amount to $1.28 billion and would represent the first such payout since 2004 when 7 cents per share was paid amounting to $60 million.

Dividend payment lifts QWI stock 25% in days

QWI Investments‘ shares gained 14 percent in 2021, with the price closing at 88 cents, a level it remained at until the company announced on February 8, the holding of a board meeting to consider a dividend on Valentine day, February 14, investors have since pushed the price over $1 for a rise of 25 percent at the high of $1.06 it traded at on Wednesday.
At the close of trading on February 7 the price close at 85 cents and ended at 90 cents the next day and closed at $1.01 on the 9th.
At the board meeting, the company approved a dividend of 3.5 cents per share amounting to $47.78 million that will not be subject to taxation, payable on April 7. The board also approved and announced a dividend policy of paying out 20-25 percent of profits annually as dividends in two separate payments. The dividend to be paid is equivalent to just over 4 percent on the pre-announcement stock price and translates to an annual return of nearly 25 percent.
The stock has since climbed to $1.06 in trading on Wednesday morning the first day of trading after the information was disclosed to the Jamaica Stock Exchange, but closed at $1.04 after trading 3.26 million shares.
The gains in the stock since the initial announcement is 24.7 percent as a result investors in the stock before February 8, will enjoy a near 50 percent return if the price remains at these levels after the stock goes ex-dividend in mid-March.
The company continues to record gains in net asset value, with a record $1.56 on February 11, up 11.4 from $1.40 at the end of December and 16.4 from $1.34 at the end of September last year. That translates to a profit of $300 million after provision for taxation from September up to the end of last week and if is sustained would result in an additional payout. The announced dividend policy could be a major game-changer for the stock that has languished below $1 since eh decline in the market in 2020 as the dividend yield could make it an attractive income producer for investors.
The Chairman of QWI Investments is the principal of ICInsider.com.

Profit surged 533% in Q2 at Paramount

Profit surged 533 percent in the 2021 November quarter, at Paramount Trading, to $29 million from just $4.5 million in 2020 after tax, but profit for the six months to November, popped by a much slower 141 percent to $48 million from $20 million in 2020. Notwithstanding the growth in the second quarter, the company is far from the profit made in the 2016 fiscal year of $173 million, with an average quarterly profit of $43 million.

Paramount Trading

Sales revenue jumped 30.8 percent for the quarter, to $401 million from $307 billion and climbed 15 percent for the half year, to $770 million from $669 million in 2020.
With profits hitting $101 million in 2017, the company has suffered since, with profit dropping to $53 million in 2020, rising in 2021 to $64 million. The current year seems on track to better the 2017 performance based on results to date.  
Gross profit rose 30 percent in the November quarter to $130 million from $100 million in 2020, but just 11 percent for the half year, with $241 million realized versus $216 million in 2020. Gross profit margin slipped in the first half of the year, to 31 percent from 32 percent in 2020 and declined in the November quarter to 32 percent from 33 percent in 2020.
Administrative expenses rose 5 percent to $91 million in the quarter and increased just 3 percent in the six months to $181 million. Marketing and sales expenses fell 19 percent to $3 million in the quarter but rose 8 percent for the half year to $5.6 million while Finance cost rose 6 percent in the quarter to $13.4 million from $12.7 million in 2020 but fell 6 percent in the half year from $25.8 million to $24.3 million.
According to the company’s Chairman, Radcliff Knibbs in his report to shareholders on the half year results, “Paramount’s improved performance was achieved by employment of a robust growth strategy.” He went on to state, “we will continue to pivot our operations to take advantage of any possible opportunities that may arise.” He concluded that “we expect that our strategic objectives will be realized through strong income growth and cost containment.
Gross cash flow brought in $75 million but after addition to fixed assets and repayment of loan, the net cash position ended at $41 million, pushing cash resource to $302 million at the end of November. Shareholders’ equity stood at $844 million with long term loans at $454 million and short term at $47 million. Current assets ended the period at $948 million inclusive of inventories of $468 million, receivables of $346 million, cash and bank balances of $124 million. Current liabilities ended the period at $437 million. Net current assets ended the period at $511 million
Earnings per share came out at 2 cents for the quarter and 3 cents for the year to date. IC Insider.com is forecasting 12 cents per share for the fiscal year ending May 2022 and 20 cents for 2023. The stock that is now added to IC Insider.com TOP15 list at 11th position, traded at $1.37 on Friday, up 44 percent from a low of 95 cents in 2021 on the Junior Market of the Jamaica Stock Exchange with a PE ratio of 11 times 2022 earnings and 7 times 2023 projected earnings. Net asset value is 55 cents with the stock selling at 2.5 times book value.  The stock price has clearly broken the long term declining trend but faces some short term resistance now around $1.40, but the recent results could well allow it to break free of that level.
The company paid a dividend of 4 cents in January 2021 and again in January 2022 amounting to $62 million.

BOJ frees up banks’ dividend payments

Bank of Jamaica is advising that with immediate Effective, Financial Holding Companies and Other Deposit-Taking Institutions can choose to resume the distributions of dividends to shareholders owning more than one percent of issued shares that was declared for their 2019 and 2020 financial years.
Dividends for 2021 can be declared and distributed to all shareholders. Jamaica’s central bank reported the change after reaching an agreement with the financial institutions to resume dividend declarations and distribution.
The central bank has, however, stated that there are still significant uncertainties associated with the COVID-19 pandemic, but BOJ continues to urge financial institutions to remain prudent in their decisions to declare and distribute dividends.
The central bank stated, “the agreement to resume dividend declaration and distribution reflects the fact that the quantum of loans that were afforded payment accommodations since the onset of the COVID-19 pandemic has fallen. In addition, BOJ believes that the worst of the impact of the pandemic on the economy is behind us, although the economic outlook remains uncertain. In this context, the Bank of Jamaica is of the view that the financial system has adequate capacity to absorb unexpected losses that could arise as the crisis unwinds. BOJ’s views about the evolution of system risks in 2020 are contained in more detail in the recently released report on Financial System Stability for 2020.”

Seprod distributing cash and kind

The Jamaica Stock Exchange-listed Seprod Limited will be paying shares a dividend split between cash and shares in Eppley Caribbean Property Fund in October.  
The Board of Directors of Seprod decided at a meeting held on September 17 at which an interim dividend on the capital of the Company will be payable on October 19, to Shareholders on record on September 30. The ex-dividend date is September 29, 2020. The dividend will comprise Cash of 30 cents per share. In addition, 15,447,465 shares recently purchased in the Eppley Caribbean Property Fund – Value Fund will also be distributed at a ratio of 0.02171 CPFV Shares for every Seprod share held. The Company last paid a dividend of fifty cents per share on January 31 this year.
Seprod shareholders owning less than 20,000 shares will receive cash instead of CPFV Shares in proportion to their holdings. Cash payments in place of CPFV Shares will be based on the closing price of CPFV Shares on the Jamaica Stock Exchange on September 17, 2020, of $57.48.
On September 8, Eppley Caribbean Property Fund – Value Fund advised the JSE that they completed the acquisition of 105-107 Marcus Garvey Drive, a 3.4-acre parcel of land located in New Port West containing two buildings, including a cold storage facility, totaling over 86,000 square feet. ECPF’s acquisition was structured to have the effect of purchasing the property using 15,447,465 newly issued shares as consideration at a price equivalent to its NAV per share. The property is fully tenanted.
The move will broaden the number of shareholders in the Eppley Caribbean Property Fund but will most likely increase the supply on the market as several investors try to offload the stock they get.

Halting bank dividends to cut US$ demand

Investors in Jamaica will be hit hard by the Bank of Jamaica (BOJ) decision to halt the payment of dividends for 2020 by financial holding companies and deposit-taking institutions.

Shareholders at and banking groups will be hit hard by the BOJ decision to stop dividend payments for 2020.

Several Jamaicans who rely on dividends from financial institutions will find that their income will be slashed from a source they have come to rely on for decades and especially now that there are few other investments that can provide the same level of return with interest rates in the country so low currently.
According to Jamaica’s central bank, the decision is done ”with a view to conserving capital and further enhancing licensees’ lending and loss-absorption capacities.” “Bank of Jamaica, after consultation with the boards of financial holding companies (“FHC”) designates, wishes to confirm the mutual understanding that FHC designates and deposit-taking institutions (“DTI”) will suspend the distribution of profits by way of declaring dividends in any manner (cash or stock) for the 2020 financial year, until further notice. It is also our understanding that FHC designates and DTIs will similarly postpone the distribution of any unpaid dividends declared for the 2019 financial year.
What does this all mean? Sagicor Group declared a dividend of forty cents per share payable on May 6, 2020, to shareholders on record on April 24. With this latest development, this dividend cannot be paid out in 2020 or until the central bank lifts the restrictions.
The move, although not stated, is much more a foreign exchange control measure in disguise to halt the payments of dividends in US dollars to the majority shareholders who are overseas. The move will result in more than US$50 million not leaving the country for the rest of the year.
Scotia Group, Sagicor Group and NCB Financial Group are three of the country’s largest entities with deposit-taking subsidiaries. All three have large overseas majority shareholders with Scotia Group overseas holding at 73 percent. While the release is silent on is the matter of conserving foreign exchange.

Blue Power to split in two

Blue Power will split into two separate companies, the directors of the group decided on, to enhance prospects for growth of the two divisions.
The “Board of Directors considered the issue of growth of the two divisions of the Company and has reached the conclusion that having the Lumber Depot Division operate as a separate company will enhance its prospects for growth through acquisitions of and or mergers with other companies in related lines of business. The same considerations would apply to the growth of the Blue Power Soap division.”
In order to effect this move, an Extraordinary General Meeting will be held following the Annual General Meeting on August 14, to consider the matter.
Shareholders will be asked approve the issue or transfer of shares in a newly created subsidiary, Lumber Depot Limited, to the group’s shareholders on record as at August 1, with the intent that after such actions, shares in New Lumber Depot shall be held by the shareholders of the group in proportion to their existing holdings..
Blue Power shareholders will also vote to transfer the business, assets and relevant liabilities of the Lumber Depot Division to the new Company.
The directors approved the payment of a dividend of 2 cents per share on August 12. The record date is July 25 and the ex-dividend date, August 9, 2019.
The last audited financial statements, show the Lumber shop division with sales to April this year of $1.197 billion and profit of $74 million, while the Soap division recorded sales of $469 million and profit of $85 million. In the previous year, the Lumber division recorded sales of $1.07 billion and profit of $62 million and the Soap division had sales of $440 million and profit of $53 million.
The assets of the Lumber shop amounts to $222 million at the end of April with liabilities of $54 million. The soap division had assets of $761 million and liabilities of just $31 million.
The two divisions are involved in two completely different business with little synergies. The two companies should have their own management and boards, suited to move the separate companies to much higher levels of operations and profits.
The stock last traded at $6 on the Junior Market of the Jamaica Stock Exchange on Thursday.