Split & rights issues for Sterling

Sterling Investments coming with split and rights issue.

Sterling Investments is considering a 5 for 1 stock split and a rights issue of ordinary shares to existing shareholders.
The company will hold an Extraordinary General Meeting at the Knutsford Court Hotel, on October 8, to consider the an increase in the authorized share capital by the addition of 1,850,000,000 ordinary shares and to approve the issue up to 2,000,000,000 ordinary shares currently un-issued, by way of a Rights Issue, on terms to be decided by the directors, including the number and price of the shares.
November 14 is the expected date for the commencement of the rights issue, Yanique Leiba-Ebanks advised IC Insider.com.
“Proceeds of the rights will be used to fund private equity and investment in some local stocks. We have been participating in IPO share issues that have done well for the fund,” Leiba-Ebanks said. So it will be more of that, going forward along with the focus on leveraged fixed income investments.

Yanique Leiba-Ebanks – AVP Pensions & Portfolio Investments
Sterling Asset Management

The issues were necessary as the company has just under 300 shareholders with limited interest in trading the stock by the general public. The company was encouraged recently to split the stock and issue more shares to broaden the shareholdings to provide a platform for more liquidity for the stock that trades infrequently.
Sterling’s fortunes will be boosted with net profit that grew by 20.5 percent in the 2018 half year, to $52 million and $27 million in the June quarter, from $25 million, in the similar period in 2017. Sterling has 59.15 million shares issued and enjoyed earnings of 87 cents for each share for the half year.
Others to expect splits from are, Barita Investments and they could well have a rights issue to fund acquisitions and other expansion and new products such a margin facilities. CAC2000 with the stock price rising into the mid-teens, Stationery & Office Supplies with the stock price expected to be priced in the teens sooner or later is expected to split by 2019. At the annual general meeting held earlier this year, shareholders were informed that the board had be looking at it but no decision was make. Access Financial directors and NCB Financial indicates that they don’t see any benefit to their company in doing a split but it only a matter of time that they will be forced to, the same applies to Palace Amusement. Some investors are of the view that with Derrimon Trading splitting  when the stock got in the teens that Caribbean Flavours is likely to follow. Investors should not ignore the possibility of Berger Paints and ISP Finance joining the queue in the near future.

Wisynco adds $2.5B in sugar & rum sales

Wisynco brand Wata to benefit from 3 new production that is now in operation.

Wisynco Group, is set to lose revenues and profit with the ban on single use plastic straws and Styrofoam but the contract to distribute sugar and rum manufactured by Worthy Park should add $2.5 billion to revenues.
The sugar and rum revenues will more than make up for the cut in revenues of approximately $1 billion per year and profits by an insignificant $70 million information released by the company to Jamaica Stock Exchange suggests.
Investors in the company’s stock could not get enough after it listed in December last year, driving it to a high of $13.81 for a then rich PE of more than 20. With the PE below 10 times the current year’s earnings and set to go to 20 by 2019, investors are dumping the stock at a PE of 8. But now they should be holding and buying more, as the stock has few that are likely to deliver better returns in the next twelve months.
According to the company, plastic straws represent less than 0.1 percent of the Company’s revenue and Styrofoam represents 4 percent of the company’s revenue and approximately 3 percent of the company’s net income. Investors seem to be concerned about the impact of the ban on the company’s operations and profit. With earnings of 62 cents for the 2018 fiscal year and 15 cents in the June quarter, investors may not be seeing a boost in profit to come to warrant holding the stock.

Wisynco Group

IC Insider.com spoke with the company’s CEO William Mahfood, advises of a number of positive developments that bode well for the future fortunes of the group. The company on Friday released information on a new distribution agreement with Worthy Park Estate (WPEL) for the distribution of WPEL’s spirits and sugar. Wisynco advised that the distribution of WPEL’s spirits will commence on November 1 and will include the ‘Rum-Bar’ and Worthy Park Estate brands of spirits. The distribution of WPEL’s sugar will commence on January 1, 2019, the start of the new sugar crop.

The new products could add around $750 million to gross profit. According to Mahfood the company has just added three new production lines to alleviate production capacity constraint and is expected to help increase sales around 20 percent. The expanded capacity will facilitate expanded production of Wata, carbonated products and juices. “New process has cut the production cost of plastics by more than 50 percent and this will result in significant cost savings,” Mahfood said. Importantly, Mahfood expects revenues from existing product lines to be up 20 percent for the fiscal year. Add to that, revenues from the new contract resulting in revenues probably increasing 30 percent in the period ahead.
IC Insider.com projects profit of approximately $4 billion or earnings per share of $1.10 and that should push the stock to $20 in 2019. IC Insider.com is placing the BUY RATED stamp on the stock.

Plastic ban to have minimal impact – Wisynco

Wisynco, traded the most shares on tuesday.

Wisynco Group will see little impact in the recently announced ban on plastic bags, plastic straws and Styrofoam, to take effect between 2019 and 2020 a release by the company stated.
“The areas of impact for Wisynco include plastic straws and Styrofoam, which the Company manufactures. Regarding plastic straws, it is proposed that this ban take effect on January 2019. Plastic straws represent less than one tenth of 1 percent of the Company’s revenue and the ban will therefore have no impact.”
“Regarding the ban on Styrofoam for local manufacturers, though there is still some uncertainty, it is currently proposed that this ban take effect on January 2020. Styrofoam represents 4 percent of the company’s revenue and approximately 3 percent of the company’s net income.”
For the fiscal year ended June 2018, Wisynco recorded profits attributable to shareholders of $2.3 billion or 62 cents per share on a normalized basis for the year from a 14.8 percent rise in revenues to $24.54 billion compared to a profit of $1.97 billion or 55 cents per share on a normalized basis for the corresponding prior in 2017.
Revenues for the June quarter grew 15.2 percent to $6.49 billion over the $5.63 billion generated in the 2017 corresponding quarter.
The group benefited from improved profit margins in the quarter and for the full year while general expenses rose at a much slower pace than the increase in revenues. In the quarter Selling, Distribution & Administrative Expenses for the quarter totaled $1.86 billion or 3.4 percent more than the $1.79 billion for the corresponding quarter of the prior year and for the 12 months it rose 8.5 percent to $6.37 billion.
Wisynco Group stock that has been under selling pressure from the start of May, when it was trading at $10.72, gained 20 cents to close at $9 with 320,465 shares changing hands on Thursday, on the Jamaica Stock Exchange. The stock is selling at less than 10 times 2019 earnings and remains one of the better buys in the market.

85% of Scotia’s transactions now online

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Scotia Group branches now being used less with more use of electronic banking by customers.

Scotia Group is reporting major breakthrough in customers switching much of their banking operations outside the banking halls.
According to the banking group in their report to shareholders, “We continue to simplify our operating model to focus on growing our core businesses, enhancing our digital capabilities, and reducing our structural costs.”
Scotia stated that “Our digital strategy continues to deliver new milestones as evidenced by a 24 percent increase in the number of mobile banking customers.” mobile, online, ATM and Point of sale continue to grow and now account for more than 85 percent of all transactions as at July. The banking group is reporting lower operating cost and fee income as a result of the switch.
The sharp fall in branch transactions come against and 7 percent increase in total to $535 billion over assets on the books in July 2017.

Harris Group buys Antiguan paint business.

Harris Paints Group, the parent company of Jamaican B-H Paints, recently purchased the assets of Lee Wind Paints in Antigua.
The Harris group of companies was established in Barbados in 1972 and is one of the Caribbean’s manufacturers of architectural finishes, building products and industrial coatings.
The group expanded with the acquisition of Brandram-Henderson (B-H Paints) in 2006, a Jamaican paint manufacturer that was founded in 1961.
Harris employs over 200 people across the region, and manufactures paint in Barbados, Dominica, St. Lucia, Guyana and Jamaica. The group distributes paints and related products to over 15 countries in the Caribbean.
Ian Kenyon, CEO-Harris Paints Group, said that the company looked forward to establishing a new manufacturing facility, increasing their investment in the country and that it would provide important strategic access to new export markets such as the BVI, US Virgin Islands, as well as Turks and Caicos.
Over the past six years the Harris Group has seen consistent profitable topline growth across its operations. Kenyon said that these results were achieved despite some very challenging conditions. “The Caribbean has experienced difficult economic times in many of the markets and this has been compounded by the recent severe weather systems across the region, yet our teams in each of the 15 countries we currently sell to, have responded magnificently and have been very successful in achieving profitable market growth and increasing shareholder value. He added, “we are very optimistic about our future as we have built very strong springboards for growth with our investments in infrastructure and have a very exciting portfolio of new product and service innovations ready and primed to launch over the next few years”
This year, the Harris Group also invested and successfully implemented a new state-of-the art enterprise resource planning (ERP) system that integrates all manufacturing plants and functions across the Caribbean, including at the B-H facility in Kingston, providing improved business efficiency and a comprehensive digital platform that will strengthen their marketing capability.

Understanding Jamaica’s fx market part 3

Stanley Motta list Wednesday

58 Half Way Tree Road owned by Stanley Motta.

After more than a month from closing of initial public offering (IPO) in July, Stanley Motta will be listed on the main market of the Jamaica Stock Exchange on Wednesday.
The company successfully raised $4 billion from the sale of 757,818,862 ordinary shares to the public at $5.31 each. The shares will start trading after the listing of the company when trading commences at 9:30 in the morning. NCB Capital Markets, was the lead arranger and broker for the initial public offering that closed on July 20. The issue was just subscribed to, with NCB Capital Markets picking up a relatively small amount of the units.
Stanley Motta own property at 58 Half Way Three Road in Kingston with rentable space of 200,000 square feet and is said to be the Caribbean’s largest technology park, which is set to employ more than 5,000 Jamaicans within the Business Process Outsourcing (BPO) and technology industry, working for international brands like Alorica and Amazon.
Rental income for a full year is likely to be in the order of US$2.5 million with most expenses picked up by tenants, it should net out around the same amount tax free. The yield on investment will translate to just under 7 percent.

Derrimon buying Woodcats International

Staff at Derrimon Trading.

Derrimon Trading signed an agreement to buy Woodcats International with the transaction set to close within thirty days.
Woodcats was founded in 1999 by Christopher Collings and reached of $450 million in the 2017 financial year. products include: export pallets, warehouse pallets, wooden crates, sawdust, and landscaping mulch with in heat treatment and pallet repair.
Revenues for the Derrimon Trading first quarter March this year, climbed 27 percent to $1.94 billion above the $1.53 billion reported for the 2017 quarter and led to a big hike in profit.
The company reported a strong 45 percent jump in its first quarter results, from $35 million to $52 million or 21 cents per share to March this year, but profit could have been even higher had they not incurred finance cost which jumped 56 percent to $38 million from $25 million in 2017.
Derrimon stock traded 236,050 as high as $25 on Friday on the Jamaican Stock Exchange but ended at a record close of $24 to be up 243 percent for the year. The company is expected to approve a  stock split of 10 to 1 at their upcoming annual general meeting slated for August 22.

Republic makes bid for Cayman biggest bank

Demand rises for Republic Financial Holdings

Trinidad’s Republic Holdings has made an offer through its wholly-owned subsidiary of RBTT Barbados Republic Financial Holdings to acquire between 51 percent and 74.99 percent of the issued shares of Cayman National Bank.
The offer is priced between US$6 to US$6.75 per Cayman National share representing a premium between US$3 to US$3.75 per share as compared to the closing price of US$3 per Cayman National share on 3 August. The offer price is around 10 times earnings which is very attractive to republic as profit has been growing nicely for last year and the current year. The acquisition would allow Republic to merge Cayman National with Republic’s Cayman operations.
Cayman National has total assets of CI$1,558,692,523, up from $1,464,852,010 at June 2017. Total Comprehensive Income for nine months to June 2018 is CI$16,062,080 and is up from CI$10,841,267 in 2017.
The Offer remains subject to a number of conditions, including completion of due diligence by RBTTBL and recommendation by the Board of CNC for the Possible Offer.
Cayman National was Established in 1974 and is the largest financial services company based in the Cayman Islands, providing banking, trust and company management, fund administration, and wealth management services to clients locally and around the world, from the Cayman Islands, and the Isle of Man, with an office also in Dubai. Cayman National is publicly traded on the Cayman Islands Stock Exchange and comprises: Cayman National Bank Ltd., Cayman National Fund Services Ltd., Cayman National Securities Ltd., Cayman National Bank (Isle of Man) Limited and Cayman National Trust Company (Isle of Man) Limited and Cayman National (Dubai) Ltd.
RBTTBL was established in 1999 and is a licensed offshore international financial business operating pursuant to the International Financial Services Act, CAP. 325 of the Laws of Barbados which primarily conducts investment and investment management services. RBTTBL’s registered office is located at Republic Bank (Barbados) Limited, Independence Square, Bridgetown, Barbados. RBTTBL is a wholly-owned subsidiary of Republic Financial Holdings Limited. RBTTBL currently has wholly-owned subsidiary in the Cayman Islands, Republic Bank (Cayman Limited).
About Republic Bank (Cayman) Limited:
Republic Bank (Cayman) Limited was established on 13 January 1992 and currently holds a Trust License and an Unrestricted Class B Banking License under the Banks and Trust Companies Law of the Cayman Islands, as amended. Republic Bank (Cayman) Limited also holds a Mutual Funds License and is a registered Excluded Person for purposes of the Securities Investment Business Law of the Cayman Islands (SIBL-EP).
RFHL is listed on the Trinidad and Tobago Stock Exchange and has over US$10 billion of total assets. RFHL, along with its subsidiaries and associated companies, provides commercial banking and related services. These include investment banking, mortgage financing, securities trading and related activities, trustee services, credit card operations, foreign exchange and trade finance services as well as deposit taking and lending operations. Through its subsidiaries and associated companies, RFHL has operations domiciled in Barbados, Ghana, Suriname, Grenada, Guyana and St. Lucia in addition to Trinidad and Tobago.

Financiers bullish on Carib tourism

Entities eyeing the Caribbean region and in need of financing should be encouraged by findings by top accounting firm KPMG included in their annual survey on financing for the sector amongst banks and non-banks.
“Confidence levels of banks increased yet again for an amazing ninth year in a row,” the survey stated and went on to indicate that “confidence levels of non-banks also increased.” “Overall non-banks remain more confident than banks registering 7.43 out of 10 in terms of their level of confidence versus 7.11 out of 10 for banks. For both banks and non-banks to exhibit these high levels of confidence would be very positive at any time but for them to do so following what can only be described as a catastrophic 2017 hurricane season for the region, represents very welcome, positive news,” the KPMG report stated.
“Canadian headquartered banks have for many years been the primary financiers of developments in the region’s tourism industry. However, it is now firmly established that the landscape has changed, although the Canadian banks remain very much part of that new landscape. The consensus view appears to be that they are “back in the market but more selective than before”. Other “players” are predominantly local banks who are increasingly participating in syndicated deals, U.S. funds, pension funds and insurance companies and development banks who are also active in the marketplace,” the survey finding went ion to say.