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 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 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

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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.

Scotia Group to pay $7.6b in dividends

Scotia to make big payout.

Scotia Group will be paying a whopping $7.6 billion in dividend in July. According to the latest quarterly report by the banking group the directors approved an interim dividend of 51 cents per share and a special dividend of $1.94 per share.
The directors state that the special dividend is to payout years of accumulated surplus that has built up over the years. The payments comes against the drop ground of net profit for the April quarter coming in a $3.295 billion versus $3.3 billion in 2018 and $5.6 billion compared to $6.76 billion year to date in 2018 with the latter being boosted by one off gain from sale of a subsidiary of $753 million.
The group reports an eleven percent growth in its loan portfolio to reach $189 billion from $171 billion in April 2018, but just 3.4 percent since October last year.
The decision to make the special payment is not surprising with the sharp cut in cash reserves requirement at the country’s central bank and the low levels of interest rates that currently prevail in the economy.

Big jump in Witco profit

West Indian Tobacco last closed at $110.

Profit before tax jumped a strong 37 percent at the Trinidad based West Indian Tobacco to TT$145 million for the three months period ended March 2019, up from $106 million in 2018.
After providing $45 million for corporate taxes profit rose 38 percent to $100 million.
The impressive results arose from a sharp 21 percent climb in revenues to $227 million and a decline in cost from 36 million in 2018 to $32.4 million in the latest quarter. Also contributing to the improved results, was an rise in gross profit margin to 77.8 percent from 75.3 per cent in 2018 that resulted in gross profit rising 25 percent to $177 million versus $141.5 million in 2018.
The Board approved the payment of a first interim dividend of 83 cents per share payable on June 11 to shareholders on record at the close of business on May 21. Earnings per share climbed to $1.19 from 86 cents in 2018. For the full year, earnings should hit $6.40. The stock that is listed on the Trinidad and Tobago Stock Exchange last traded at TT$110 at a PE of 17.

Twice a year dividend for Wisynco

Shareholders at Wisynco 2018 AGM.

Wisynco declared a dividend of 7 cents per share payable on February 26, 2019 to shareholders on record at February 12, 2019.
The company in its report to shareholders accompanying the half results, states, that “going forward dividends will be declared semi-annually, with the first interim dividend being in January and the final dividend in July of each year.”
Wisynco reported a 36 percent rise in net profit for the December quarter to $776 million and 30 percent for the half year to $1.54 billion.

NCB hikes dividend 29%

NCB hiked dividend to 90 cents from 70 cents in 2018.

NCB Financial hikes dividend 29 percent, to $2.2 billion or 90 cents per share, as profit from ongoing operations jumped 40 percent in the first quarter to December last year to $5.7 million before taxation.
Profit after taxation and one-time gains, resulted in net profit of $7.4 billion for the first quarter of the 2019 financial year, slightly lower than the prior year’s results that included a gain (negative goodwill) of $4.4 billion relating to the acquisition of Clarien Group. Profit for the latest quarter, includes a gain of $3.3 billion from the disposal of 326,277,325 JMMB Group shares at $28.25 per share.
The strong improved results climbed on the back of 24 percent in net income, to $20.7 billion from $16.7 billion in 2017, offset by a 21 percent increase in expenses. Included in expenses is loan loss provision of $1, up from just $146 million in 2017 and seems tied to the need to adjust loan provisioning in line with new Accounting Standards. Depreciation and amortization cost almost doubled to $1.3 billion, from $667 million in 2017. Other operating expenses jumped 29 percent to $6 billion from $4.7 billion in the prior year. The big improvement in revenues flowed from increases in net interest income from $7.55 billion to $9.85 billion, an increase of 30 percent, while exchange trading delivered a third more, at $4.2 billion.
Retail and Small Business Banking segment profit grew a strong 36 percent to $1.34 billion, but Payment Services fell just 2 percent to $1.2 billion. Corporate Banking jumped sharply by 76 percent to $1.25 billion, Treasury and Correspondent Banking was up by just 14 percent to $1.65 billion. Wealth, Asset Management and Investment Banking, grew attractively by 39 percent to $1.2 billion, Life Insurance & Pension Fund Management rose 29 percent to $1.3 billion while General Insurance moved from a loss of $107 million to a profit of $227 million.

NCB giving back to the community.

The Group’s loans and advances, net of provision for credit losses, rose 16 percent to $373.5 billion. NCB stated that “the growth was driven by our Jamaican that increased by 22 percent or $50.4 billion. Non-performing loans totalled $18.5 billion as at December 2018 (December 2017: $15 billion) and represented 4.9 percent of the gross loans compared to 4.6 percent as at December 2017.”  Customer deposits grew just 7 percent to $461 billion. The varied growth rate between loans and deposit is a strong positive for profit as the revenues climb faster than cost.
The group re-launched a revised take-over to acquire up to 32.01 percent of the outstanding shares of Guardian Holdings which, when combined with NCB’s existing 29.99 percent holding will bring the total to 62 percent. The profit of the group will get a further boost from this acquisition. IC has updated the earnings per share for 2019 to $14 from continuing operations and with the stock price at $145, the PE is just over 10 times earning making the stock BUY RATED with a 2019 target price of $225.

JSE – directors cannot override AGM decision

Palace Multiplex in Montego Bay.

Palace Amusement shareholders approved a dividend of $2 per shares at the annual general meeting held in December last year with the record date of January 7 and payment to be made on January 18.
IC was informed that the Jamaica Stock Exchange stopped the payment. In discussion with the JSE they indicated that the company did not comply with the rules of the exchange to inform them of the dividend. Accordingly, the change in dividend payment was to allow for the public to have notice of the ex-dividend date.
That of course is only partially true, while the company did not advise the exchange when the directors were to meet to approve the dividend and what was the outcome of the meeting. The exchange had adequate notice of the payment from October 31. The exchange JSE staff did nothing about the information that they got and approved for posting on their website.
The company’s directors’ report clearly states that the dividend had an xd dividend date of January 4 with the payment to be made on January 18. The annual report was posted on the JSE website from October. The directors, report along with the audited report were put to the meeting for acceptance which was done.

Andre Tulloch, head of the JSE regulatory arm.

Shareholders after approving the directors’ report, approved the resolution for the payment of the dividend, effectively agreeing to ex dividend and payment dates as set out in the directors report.
In the wisdom of the Jamaica Stock Exchange, they ignored the supremacy of the AGM and forced the company to submit information to change all the dates relating to the dividend. They failed to understand that the directors have no powers to change what the shareholders approved, and if a change is to be made, then the directors would need to call a general meeting to get shareholders to make the change. The correct remedy would have been some reprimand not a call for a non-legal action.
The requirements of the JSE is that any meeting at which a dividend is to be consider should be communicated to the JSE no later than 7 days before the date of the meeting and within 48 days of the meeting the decision taken. This was not done by Palace, but the JSE who had notice of the declaration from the end of October, did nothing about it for more than two months.
On 17 January, a posting on the JSE website showed that the record date was changed to January 31. The posting stated the “Palace Amusement (PAL)  has advised that following decision made at their Annual General Meeting in December 2018, to pay a dividend of $2 per stock, the payment will be made on February 8, 2019, to the shareholders on record as at January 31, 2019,  The ex-dividend date is January 30, 2019.”
The added problem is that shares were traded in January after the xd date of January 4. The seller would have expected to collect the dividend that was approved. It also means that cheques already drawn, may have to be redone, to record the new record date.
The JSE has clearly, made a huge error in this matter and should immediately correct it, to prevent a messy situation from getting worse. You cannot correct a wrong by another wrong.