Jamaica Producer’s appetite for acquisitions

Jamaica Producers sale of 30 percent of JP Snacks Caribbean, for  $720 million add to the group’s cash pile for the Group bringing it to just over $6 billion.
The total amount of financial resources provide good ammunition to undertake a sizeable acquisition, locally or overseas.
In an exclusive interview with Jamaica Producers’ Managing director, Jeffrey Hall, IC Insider.com gleaned that the group has a number of plans under its belt. Hall stated that all their businesses are doing well, but The Group is looking growth opportunities in infrastructure and Manufacturing. The low cost of and abundance of local capital is opening up possibilities for local businesses not seen for a long time, Hall stated. However, the group is not about to take on just about any business.
Tortuga International Holdings Company 62 percent subsidiary of Jamaica Producers is one such acquisition the group did a few years ago. The company manufactures the rum cake for sale with the main target being the overseas residents. The company produces rum cake in Jamaica for all the markets except Cayman suffered a fall in revenues in 2018. Tortuga International had revenues of $879 million in 2018, down from $907 million in 2017, according to the group’s audited accounts. Hall attributes the decline to the effects that hurricanes in the region on tourism traffic to some countries within the region.
“Tortuga will launch Mamajuana Rum Cake in the Dominican Republic in the second quarter of 2019 and Vanilla Rum Cake un Mexico in the third quarter of the year Hall told IC Insider.com.  
Producers delivered $816 million profit for shareholders of the group up from $662 million in 2017 from a 21 percent increase in revenues to $19.6 billion compared to $16.2 billion in 2017, at the same time gross profit rose below the increase in revenues at 16.4 percent. Segment results show JP Foods and Drinks division revenues rising 29 percent to $11.3 billion from $8.8 billion in 2017 and delivered segment profit that rose 36 percent to $378 million while the logistic segment comprising mainly Kingston Wharves grew revenues 11 percent to $8.3 billion for a 26 percent rise in profit $2.7 billion.


JP sells 30% of JP Snacks to Wisynco

Jamaica Producers former HQ

Jamaica Producers Group and Wisynco Group entered into an agreement that see the transfer 30 percent of the shares in JP Snacks Caribbean (‘JP Snacks’) to Wisynco Group.
JP Snacks Caribbean is a holding company that will own the “JP St. Mary’s” brand and JP’s tropical snack manufacturing operations in which JP will hold the remaining 70 percent of the shares.
“The goal of the partnership is to bring to consumers in Jamaica and internationally, a wide range of innovative Caribbean snacks and tropical foods. Wisynco will bring to the partnership, their expertise in marketing,

Wisynco Group

manufacturing and importantly, their best in class distribution network. The transaction values JP Snacks at $2.4 billion and sees Wisynco investing $720 million for a 30 percent interest, a release from both companies stated.
The release further stated that “the business will seek to strengthen distribution in existing markets in the USA, Canada, the Caribbean, the UK and Central America, in addition to seeking new markets. JP St. Mary’s snacks will continue to be the flagship product line of JP Snacks through its banana, plantain, cassava and breadfruit chips, as well as similar product lines for the Spanish language markets.
Jamaica Producers Group is a Jamaican-owned multinational, with its primary businesses infood and logistics. JP owns and operates the market leading fresh juice manufacturer, supplying

Jamaica Producers to introduce a new line of banana chips.

Holland, Belgium, Scandinavia and other markets in Northern Europe. Through its Tortuga International subsidiary, JP Group operates a Jamaica- based bakery that supplies Tortuga Rum Cake to over 15 countries. JP Group’s logistics interests include Kingston Wharves, the regional multi-purpose port and JP Shipping Services based in the UK. JP also owns JP Farms, Jamaica’s leading banana farm, which is the largest private sector employer in St. Mary, Jamaica.
Wisynco is the maker of WATA, CranWATA, BOOM Energy Drink and BIGGA soft drinks. In addition to its owned brands, Wisynco is the exclusive local bottler for the Coca- Cola Company, as well as third-party beverage brands such as Squeezz and Hawaiian Punch and also distributes portfolios for Red Bull, Tru Juice & Freshhh, Dr. Pepper, Worthy Park Estate, Kellogg’s, General Mills, Nestle and others.

Up to $50m loan to buy Wigton shares

NCB Capital Markets will be providing investors up $50m in margin funding to assit with buying of Wigton’s shares in the IPO.

Investors in Wigton Windfarm initial public offer of shares will be able to access up $50 million in loan financing from NCB Capital Markets (NCBCM) to fund up to 50 percent of the purchase, NCBCM’s CEO Steven Gooden informed IC Insider.com.
The Wigton IPO, is generating lots of interest, amongst Jamaicans, residing locally and overseas and should pull in around $6 billion before expenses for the sellers, PetroJam. It will be one of the larger issues, to hit the Jamaican capital market.
In addition to providing margin funding to assist in purchasing the new IPO issue, NCBCM online portal, dubbed ‘GoIPO’ and created in conjunction with the Jamaica Central Securities Depository , will be available for their investors to use in making application for the shares. The application will allow investors with accounts at NCBCM, to easily fill out application forms as the system will automatically populate the form with the other information for persons with login access codes.
The GoIPO was born out of the major challenges that NCB encountered when they brokered the Wisynco IPO.
Investors with login codes can use them to access NCB system and access accounts that will fund the application. The system will be show the Wigton IPO application from which the appropriate application form is to be fill out. The required information will be the sum being invested. The system will compute the number of shares being applied for and the applicant will identify the account that the funds will come from.

Wigton IPO with propectus expected in a day or two.

Persons having no login code will have go online and fill in name, JSCD account number and TRN and enter the sum they are investing and method of payment as well as upload a photo ID to go with the application.
The new system will eliminate the need to visit a locations to deliver applications and significantly reduce errors associated with manual processing.
Of the GoIPO solution, platform is encrypted, providing security and confidentiality to users, who can access the digital portal once they have a JCSD number. Gooden said, too, that as selling agents of the IPO, NCBCM possesses the largest distribution channel within the broker space and clients who do not wish to apply digitally are encouraged to complete and return their forms to NCBCM locations islandwide.
NCBCM say that investors can apply through the NCB system to apply for shares to go into other brokerage accounts.

How the east was won?

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Annmarie Vaz winner of the East Portland seat.

Anne Marie Vaz increased her party’s support by a stunning 58 percent, over the JLP’s haul in the 2016 General Election to win the East Portland by-election on Thursday with just 11 votes less than 10,000.
At the same time, Damion Crawford only pulled out 5 percent more votes than was polled for the PNP, in 2016. The story gets increasing bad for the PNP and it is not just in this election. The writing was on the wall for years but poor candidature, by the JLP lent the view to many onlookers, that East Portland was safe PNP territory. The 2007, results with the PNP winning by less than 800 votes, should have sent a clear warning to them that things were changing rapidly.
In this latest election, the number of new voters on the list, grew by 5.6 percent, but Crawford’s increase of 4.8 percent was less than the rise in registered voters. Looked at differently, he picked up just 354 votes more than in the 2011 elections or only 3.8 percent more. On a net basis, he garnered only approximately 25 percent of new voters, while Vaz got 75 percent. This is consistent with a pattern seen island wide since 1993 and is one that is not likely to change, anytime soon.
The Labour party was able to get out their 8,000 voters of 2011 and add 24 percent more voters to it, in addition to commandeering the vast majority of new voters, the vote tally at the end of the preliminary count suggests.
The results on the surface is a major about turn for the seat. Closer examination of the numbers for a longer period tells a clear tale. The huge 2019 increase is due to a below performance for the JLP in the 2016 elections, when the votes by the party sank by a hefty 22 percent and  well against the national trend. The trend since the 1993 elections, suggests that the natural growth in party support should have seen them polling over 9,700 votes, just below the numbers she got in the latest polls.
The data also points out that the trend is indicating that the JLP should have polled around 2,000 more votes than they did, this time around.  Those voters are there in their corner based on the growth in support, reflected in the average gains in votes cast in prior elections. This bit of information is also reflected in public opinion voting survey data.

Eppley Carib Property considers JSE listing

Eppley Caribbean Property Fund is now being managed by Eppley, a Jamaican listed company

Eppley Caribbean Property Fund SCC announced its intention to cross-list the cellular shares of the Value Fund (“the Value Fund Shares”) on the Jamaica Stock Exchange.
The Value Fund Shares are currently listed on the Barbados Stock Exchange and the Trinidad and Tobago Stock Exchange and the believes that cross-listing the Value Fund Shares on the Jamaica Stock Exchange will enhance liquidity and make them available to wider universe of investors.
The Board of Directors has authorized ECPF’s fund managers, Eppley Fund Managers Limited, to evaluate the process of cross-listing the Value Fund Shares with the support of ECPF’s attorneys, investment bankers and other professional advisors.
If a decision is made by the Board of Directors to cross list the Value Fund Shares, Eppley expects that the cross-listing is likely to take place by the end of the second quarter of 2019 subject to any relevant regulatory approvals.
Eppley Caribbean Property Fund SCC (“ECPF”) is a closed-end mutual fund that invests in real estate across the Caribbean. ECPF has two segregated cells, namely the Value Fund and the Development Fund both of which are listed on the Barbados Stock Exchange and the Trinidad & Tobago Stock Exchange

Major capital increase for Barita?

If one of the resolutions to be put to shareholders of Barita Investments at the upcoming Annual General Meeting set for March 21 is anything to go by, the company is set for some major changes.
According to the notice of meeting, shareholders are being asked, to approve a major increase in the authorized capital of the brokerage house, to 15 billion units up from 1 billion currently. The increase will result in the creation of 13.5 billion new ordinary shares and 500 Million preference shares.
The meeting is being asked to give Directors authority to dispose of the newly created shares in such manner as they think most beneficial to the Company. The company did not state the purpose of the added shares.
The company by the end of March, will be issuing new shares to existing shareholders, following the approval of a right issue, 10 new share for 17 existing ones at $15.50 each. The proceeds of the rights issue will take the issued capital up by 262.28 million units to 708 million shares. At this level the shares will not be very liquid and the company will need to split the stock to help improve liquidity.
The rights issue seems to be just one of a series of moves by the company to increase the number of issued shares. In 2018, IC Insider.com suggested that the company was set to issue rights to existing shareholders as well as the likelihood of splitting the stock. The move to increase the authorised capital seems poised to fulfill the splitting of the stock. The odds favour a stock bonus that could well result in issued shares moving to between 2.1 billion and 2.8 billion units. Such a move would result in more liquidity for the closely held stock and not the most liquid on the market. A stock split that

Barita Investments shareholders seem poised to get a stock split sooner than later.

would use of just 2 billion of the increased share capital, suggests that there is much more to the move than the annual report speaks to. This publication is of the view that one or more major regional financial institutions are likely to buy into Barita well ahead of the final quarter of 2019. The move would result in Conerstone, the current major shareholders reducing their percentage holdings. Barita could well go back to the market to garner funds from a wider cross section of investors and thereby increasing the number of investors in the company.
At the end of December, Barita shareholder’s capital was $3.05 billion with total assets of $19 billion. The company reported profit of $108 million after foreign exchange and trading gains of $156 million up from a loss of $39 million in 2017.

Barita rights issue closes in March

Barita Investments – 2018 best performing JSE stock.

Barita Investments held an Extraordinary General Meeting on January 17, 2019 and passed the Resolution to issue up to 262,280,484 ordinary shares as a Rights Issue to Stockholders and gave the power to the directors to set the other terms.
Subsequent to the meeting, the directors agreed the terms of the issue with offer opening on February 25 and closing on March 18 to shareholders on record at February 5 at a price of J$15.50 per share. Shareholders will be entitled to ten shares for every seventeen shares owned on the record date. Shares not taken up by existing shareholders will be available to other shareholders who apply for excess shares. The deadline for applications for any excess shares is March 25.
Barita’s stock has been trading in the $50 region for sometime, spurred partially by announcement of the rights issue plus other positive developments for the company, including new business.
Barita’s share was the best performing on the Jamaica Stock Exchange in 2018, with gains of 593 percent.

CMP flouting law – no AGM for 11 years

For the nine months to December 2007 CMP Industries reported profit of $5.2 million representing an improvement over the results for the similar period in 2006. The company had $23 million in cash and no interest bearing debt.
From all indications, CMP was generating rental income from property owned at Marcus Garvey Drive that been rented successfully since. By now, the company should have piled up a large amount of cash with several years having passed, are those funds been well managed? That is a big question. Shareholders have no way of knowing since the company has not presented any new financial information nor held a general meeting to update them.
The 2007 results are the last that minority shareholders have received, when the company was listed on the Jamaica Stock Exchange. Apparently, Cash Plus owned entity acquired the majority shares but the Trustees in Bankruptcy has taken control over the company but has supplied no updates on the company finances nor called a general meeting of the company. That leaves the company in breach of the companies Act that require annual general meetings to be held annually.
Recent contact with the Trustees in Bankruptcy indicates that they are controlling the company to realise funds to pay off debtors of Cash Plus. If that is true and it can’t really be so unless they sell the shares of the controlling interest, as the company belongs to all shareholders and any cash inflow if distributed has to be done equally to all shareholders as CMP is not indebted to Cash Plus debtors.
CMP Holdings Limited, was incorporated under the laws of St. Lucia, and which owns and controls approximately eighty percent (80%) of the shares in CMP Industries in 2007 sold the shares to Castelo Holdings, was said to have acquired 80 percent interest in CMP.
CMP shares were suspended from trading on the JSE in 2008, pending an offer to minority shareholders that never came. Minority shareholders need to know what is happening to their investment in the company and the Trustees in Bankruptcy cannot continue to flout the law.

Sterling comments on rights issue

Sterling Investments

Thanks very much for your feedback and observations IC Insider. Here are a few facts to aid the analysis:
1. SIL shareholders have known about the upcoming rights issue for over 3 months, the longest notice given by any company in the last 2 years!
2. SIL shareholders voted at an EGM on October 8, 2018 to conduct a rights issue. All shareholders, large and small, had a chance to physically attend the meeting and vote on the resolutions proposed. The Board welcomed the decision of the shareholders to do the rights issue and take advantage of great investment opportunities available in the global marketplace!
3. On December 12, the company published the details of the rights issue on the JSE website and the allotment formula for all shareholders. The notice informed shareholders that they would be able to purchase 2 shares for every 3 shares they owned. It also stated that the rights would apply to all shareholders that owned shares as at December 27, 2018. We received many calls from excited shareholders who wanted to participate!
4. SIL placed 2 full page advertisements in the newspaper to remind shareholders: On December 27, 2018 Sterling Investments Limited placed an ad in the Gleaner advising shareholders that the information was available on the JSE website, the SIL website.

Marion Ross of Sterling Investments.

5. On January 3, 2018 the JCSD mailed letters to shareholders with the forms they needed to complete. These forms are also available on the JSE website. Some shareholders have confirmed receipt of the documents and some shareholders may not have received them yet due to delays in the local postal service.
6. Sterling Investments remains committed to ensuring all shareholders are given equal and sufficient opportunity to participate in this great investment company. Existing SIL Shareholders will have until January 18th 2019 to renunciate their rights and can apply for shares in the excess pool until January 25th.
7. We are grateful to IC Insider.com for their shareholder advocacy.
Publishers’ comments: thansk for the feedback. While SIL took steps to inform shareholders it does not chnage the facts that the information that was mailed, was sent out late and had critical pages missing or pages with only partial information thereon.

Another stock exchange fiasco

Sterling Investments

The Jamaica Central Securities Depository (JCSD) finds itself in another fiasco regarding the issue of new shares, following the mess up of the recent Seprod share issue where amounts originally allocated to investors were changed.
The latest mess is the documentation and their dispatch for the rights issue of Sterling Investments shares. The notice for the issue that opened on January 4 and closes on January 11, was only posted on January 3, clearly late for some investors.
The lateness of course is a problem the company could easily fix by extending the deadline date. So far, no official position to extend the deadline date, has been taken. The latest bit of information reaching IC Insider.com, suggests that the date will have to be pushed back.
Two documents were sent to shareholders. A cover letter, describing the issue and mentioning that shareholders can apply for excess shares over their allotment. The application forms sent did not include the page for shareholders to

The Jamaica Stock Exchnage subsidiary

apply for excess shares (page 4). That of course is not the only problem with the forms. In addition, part of page 1 with instructions is missing, also cut off are sections of pages 2 and 5. In short, the application forms included reflects a level of sloppiness in its execution and does not reflect well on those responsible for the job.
It unclear how the company and the JCSD will deal with the matter, but it appears that the proper way would be the sending of the corrected forms to shareholders and extend the deadline date.
The capital market needs to clean up its act if it is not loose credibility.