Scotiabank wins Service Award

Press Release, 3rd July 2013 | Scotiabank Jamaica scored high marks to cop this year’s PSOJ/Jamaica Customer Service Association’s (JaCSA) Service Excellence Award. The Bank emerged as one of three large companies with top scores in leadership strategy and governance, service standards, the existence of a service charter and its deployment throughout the organisation. The awards were held recently, in Kingston.

Rosemarie Voordouw, Director Customer Experience stated that customer insights and feedback; people; technology & processes; and governance are the pillars of Scotiabank’s customer service strategy. The judges’ report acknowledged this focus, noting that the company demonstrates world class practices in its delivery of customer service throughout its branches and contact centre, and that rich Service Excellence systems were “alive and integrated into the fabric of the organisation”.

Scotiabnk_psoj trophy150x150The judges report also stated that “passion for service excellence is rife among leaders and other employees”. This shows up in Scotiabank’s practice of continuous customer feedback measurement which includes daily, monthly and quarterly monitoring via surveys. The survey results form the basis action planning to address service gaps. Scotiabank’s strategy of creating a team dedicated to monitoring customer service delivery, and the well-defined complaint resolution process, also came in for commendation by the PSOJ/JaCSA team the bank said.

$2.85 for JSE shares, is it worth it?

The Jamaica Stock Exchange (JSE) prospectus to raise $107,865,000 is now released to the public for consideration with the issue scheduled to open at 9:00 am, Friday 5th July 2013.  The Invitation is scheduled to close at 4:00 pm, Friday 19th July, subject to the right of the Company to close the Invitation at any time after it opens.  The total amount of shares being made available will be 38.25 million units comprising 28 million being issued directly by the Jamaica Stock Exchange and 10.2 million by JMMB. JMMB is selling the shares they acquired when they took over the Capital Group, which put their holding at 18.18 percent, well above the threshold of 10 percent any one investor is allowed to hold as stipulated by the JSE articles.

The issue price | IC Insider computes that the stock carries a value around 10 times 2013 earnings, based on the assumption that trading activity continues for the rest of the year at the rate experienced in June. For the 12 months to December last year, profit of $93 million was reported but that figure included revenue from the sale of a board seat to Proven Wealth Management for $60 million, as well as large fee income from the purchase of Lascelles’ shares that were acquired by Campari last year and to a lesser degree the shares traded when Capital & Credit was acquired.

Existing capital | There are currently 112,200,000 (formerly 28 million) ordinary shares in issue and the new shares will bring the issued capital to 140 million units.  The shares have a book value of $5.52 but earnings per share based on 2012 profit will be just over $0.83 and that figure is inflated by the non-recurring income mentioned above.

jse_logo150x150Profit after tax amounted to $5.8 million compared to a loss of $6.1 million in 2012. For the quarter ending March, the JSE’s income rose 8 percent to reach $69.5m compared to $64.4m in 2012. Other Operating Income increased by $5.5m or 32% over the same period, primarily due to an increase of $5.3 million in revenue from the JSE regional conference. Investment income of $22 million jumped $14 million over 2012 due largely to the gains on US dollar investments as a result of devaluation of the Jamaican dollar.

Positives | The number of shares to be issued is relative small but shareholding is limited to 10 percent of issued shares. The preference shares which was a debt instrument was repaid and these funds replace the amounts paid out. The stock market is not at its most buoyant but with interest rates having declined below ten percent and government slashing the fiscal deficit, rates could go lower. This development ultimately makes stock market investments more attractive and drive up trading volumes and therefore fee income for the exchange. The stock exchange plans for more instruments to be traded on the exchange but there are no imminent new listings that are known. The stock exchange is showing signs of greater activity this year but it has not reached a level to ensure that the JSE makes an operating profit. The JSE will benefit from listing fee income if the value of shares rise, as the annual listing fees are tied to the value of each company’s shares that are outstanding at the start of each year.

Negatives | The number of shares to be issued will not ensure a good level of liquidity for the stock, which will keep bigger investors away. There are no rules preventing existing shareholders from selling their holdings in partially or in full thus increasing the volume that could become available to the wider public. Short term profit prospects are not exciting suggesting that the stock is not very attractively priced relative to the rest of the market. The company has an oversized board of 19, resulting in an unnecessary waste of funds and an unwieldy structure that makes it more difficult to properly run board meetings and by extension, the company.

Revenues | The Company derives its revenue from a range of sources including the JSE cess, calculated on the value of each market transaction, fees charged for listing companies at the initial stage, annually, as well as any supplementary listings, membership, transactions, the registrar and trustee fees paid to its subsidiary company JCSD, amongst others, income generated from the provision of conferences, seminars and the e-Campus. The JSE has recently entered into a Memorandum of Understanding with the Bank of Jamaica to work towards the development of a fixed income trading platform for Government of Jamaica securities and corporate bonds. It is also conducting research into the development of exchange-traded products and other exchange-related products.

In summary | Stock markets are cyclical in nature resulting in peaks and troughs in earnings flowing from bull and bear markets. At this juncture, the market is in the process of moving into a bull market. Investors who buy the shares now are essentially buying at the lower end of the market. The levels of trading currently are a fraction of what they have been in the past, so the potential is huge going forward. The change in interest rates and the focus of government on controlling the fiscal deficit will ultimately have a huge impact on the fortunes of the stock exchange. Investors should not be looking for any big pay day any time soon from this stock.

Major management changes at D&G

Desnoes & Geddes Limited (DG) has advised that Jed Dryer, Finance Director, has come to the end of his three year rotation at Red Stripe and will be transitioning to a role in Miami as Finance Director for Projects commencing July 1, 2013. Dryer will remain on the boards of DG and Celebration Brands Limited.

Vernon Douglas, Group Financial Controller at Red Stripe will be Acting Finance Director effective July 1, 2013. As a result of the reorganisation of the operations in D&G, the role of Human Resources Director will no longer exist as of June 30, 2013. Lisa Lewis, Human Resources Director, Red Stripe will therefore no longer be working in this capacity as of June 30, 2013. Lisa will be resigning from the Board of Directors and Board of Trustees for the pension plan as at that date. She will be working as HR Director for Projects, Diageo WestLAC, from July 1, 2013 to September 30, 2013. After September 30, 2013 she will be leaving Diageo to pursue other interests.

D&GRedStrip_Banner600x250Ali McLennan, former Diageo Global Beer, People and Talent Manager, will be Acting Head of HR for the company effective July 1, 2013. Marguerite Cremin Chung, Head of Corporate Relations will be taking the role of Head of Corporate Relations for Central America and the Caribbean effective July 1, 2013. Her replacement will be the subject of a future announcement. Daan De Kroon, Head of Red Stripe International & Licensed Brewing will be taking up the role of Export Director, Ypioca, Brazil. His replacement will be the subject of a future announcement.

Profit | Desnoes & Geddes reported improved results for the nine months to the end of March this year with profits after tax being up 30 percent to $1.050 billion, but in the latest quarter profits was down 18 percent to $243 million after tax. The company took a $152 million charge in the third quarter for making workers redundant, flowing from the decision to transfer the sales and distribution of its products to Celebration Brands, a joint venture company with Pepsi. The company’s management indicates that the amount written off in the quarter is 50 percent of the total separation cost.

Overseas production | The results reflect the decision last year to switch the production and sales of Red Stripe to the USA. Export sales are down as a result, but so is cost relating to exports. Local sales grew to $2.67 billion up from $2.56 billion in 2012 and for exports it was $564 million in the current fiscal year versus $450 million.

Scotia Insurance enters 15th year

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[Press release dated June 26, 2013] Scotia Jamaica Life Insurance Company Ltd (Scotia Insurance) marks its 15th year with more than 200,000 policy holders, assets in excess of J$50B, and in 2012, recorded over J$4.1billion in new premiums.

Hugh Reid, President of Scotia Insurance, attributed the company’s success over the last fifteen years to the dedication and commitment of its staff, loyalty of its customers and keen attention to developing products that respond to customers’ needs. “We did all the right things very early, including developing a world class team, listening carefully to our customers and investing heavily in research so that we were able to provide exactly what the market needed, “Mr. Reid said. But a major part of the success it the association with the original parent company, Bank of Nova Scotia, which provides a ready source of customers as well as a strong sense of sfability.

Scotia Insurance’s most well-known product is ScotiaMINT, an interest-sensitive universal life insurance policy and long term savings plan that includes tax-advantaged benefits when invested for five years or more. This product, which heralded the birth of the Company in June 1998, had $41 billion in assets as at December 2012.

Scotia_Hugh Reid150x150Scotia Insurance now offers eight products including the market leading ScotiaBRIDGE, an approved retirement scheme (ARS).  The company has been the ARS market leader every year since 2009 when ScotiaBRIDGE was launched and now has more than J$2.4 billion under management.

Other products offered by the Company include two new whole life products launched last year: Lifetime Security – designed to provide beneficiaries with financial support in the event of death, personal accident or terminal illness and its companion, Life Shelter, which provides coverage for final medical and funeral expenses.

One of the traditionally areas for Scotia Insurance is the provision of Credit Insurance to Scotiabank retail customers who have loans and credit cards. There has been consistent double digit growth in this area which Mr. Reid attributes to increasing awareness among consumers of the importance of a contingency plan their credit facilities, in the event of death or critical illness.

“As we look forward to the next fifteen years, Scotia Insurance will continue its aggressive product expansion which has seen six new products launched in the four years since 2009. The company has acquired a new core life insurance administration system and this platform will allow us to develop new products faster and more efficiently. We look forward to the future knowing that our work and contribution helps to make individuals and families more secure in planning and shaping their lives,” Mr Reid said.

Insider trades

A director of Lasco Distributors Limited sold 200,000 of the company’s shares on June 14, 2013.

A director of Lasco Manufacturing Limited sold 200,000 of the company’s shares on June 13 & 14, 2013

Blue Power Group Limited advised that two senior managers sold a total of 159,995 shares during the period June 17 – 21, 2013.

Scotia Group Jamaica Limited advised that a senior manager purchased 2,792 SGJ shares on June 24, 2013.

A senior manager of Sagicor Investments Jamaica advised that they sold 20,000 S shares on June 21, 2013.

A related party to Honey Bun (1982) advised that they sold 5,000 Honey Bun shares on June 25, 2013.

CPJ denies major customs breach

Statement released by Caribbean Producers Ltd | It has come to our attention that recent newspaper articles and press reports refer to breaches of the Customs Act by a major importer operating out of Western Jamaica that is listed on the Jamaica Stock Exchange.

While these reports do not name our Company, CARIBBEAN PRODUCERS (JAMAICA) LIMITED as the entity in question, we wish to advise our shareholders and the wider public that we consider such reports to be erroneous.

The Company is a leading food service company and hotel supplier in Jamaica. It sources its products from some 30 countries and imports thousands of unique items in up to 100 containers per month. The Company considers that it has worked closely with the Customs Department and the Ministry of Finance in establishing and growing its business during the course of the last 18 years.

CaribbeanProducers(CPJ)280X150Contrary to the press reports, the Company continues to have the status of ‘AUTHORISED ECONOMIC OPERATOR’ (AEO), which is granted by the Jamaica Customs Department. Changes to the AEO program were introduced by the Customs Department and the Company, along with other AEOs, will need to comply with certain requirements leading to security certification by 31 October 2013.

More recently, one of the suppliers of the Company mislabelled a relatively small number of cases of pork products that the Company inadvertently imported in a large container containing a total of approximately 500 cases of pork bellies. This matter is under discussion with the Customs Department and the relevant supplier has admitted its liability, which arose due to their error, and has offered to pay any fines on behalf of the Company, which the Company believes will not exceed J$1.1M.

Any other information published by the press in relation to the Company’s position as regards the Customs Act, including references to potential fines in the region of J$3 billion, is not correct. The Company is committed to being a good corporate citizen and responsible publicly traded company, operating within the law and with regard to the principles of good governance.

Reports of Insider trades

Trades by directors or persons or entities connected with company can be a powerful tool as to what may be taking place in a company. That may not always be the case as it all depends on the reasons for each action.

In the Jamaica, there are some companies that have ‘connected parties’ whose trading in the company stock may tell a story as to what can be expected down the road. For example, Mayberry Investment is one company that buying by insiders usually sends a strong message for future prospects. Jamaica Broilers is another company where insider buying and selling more often than not, sends a good message. We list below recent insider trades. Investors can make of them as they see fit.

JMMB | Jamaica Money Market Brokers Limited advised that a connected party sold a total of 5,000,099 JMMB shares during the period June 10 – 13, 2013. Also a connected party sold a total of 426,500 JMMB shares during the period June 4 – 12, 2013.

Honey Bun | Honey Bun (1982) Limited advised that a Director sold 5,000 Honey Bun shares on June 13, 2013.

Sagicor | Sagicor Life Jamaica Limited (SLJ) has advised that an Executive sold 2,000,000 SLJ shares on June 12, 2013.

PanJam | Pan-Jamaican Investment Trust Limited (PJAM) has advised that a director sold 14,200 PJAM shares on June 14, 2013.

MIL | Mayberry Investments Limited (MIL) advised that a related party purchased 26,400 MIL shares on June 14, 201 and that another trade purchase took place by related parties of 238,853 MIL shares during the period June 10 — 11, 2013 and another purchase of 6,739 MIL shares took place on June 5, 2013.

TCL | Trinidad Cement Limited (TCL) advised that two senior managers purchased 207,365 and 99,000 TCL shares on May 14, 2013 and June 4, 2013 respectively and that a person connected to a senior officer purchased 100,000 TCL shares on June 14, 2013.

JAMT | Jamaican Teas Limited has advised that a party related to a director purchased 18,948 shares during the period May 21, 2013 to June 6, 2013.

PURITY  Consolidated Bakeries Jamaica Limited has advised that a Senior Manager purchased 18,300, 000 in the company on May 31, 2013.

Digicel joins the rate cut race

Following on the announcement last week by Cable & Wireless to cut all prepaid rates to $2.99 across all networks and to overseas, Digicel Jamaica unveiled a range of new plans that involves the lowest rates per minute. The new plans goes into effect at 12.01am on Friday morning.

Customers are now able to choose from one of six plans that best suit their individual needs a release from the company said.

Digicel’s line up of plans includes the Brawta Plan, the Gimme Five Extra Plan, the Double Bubble Plan and the $2.99 Plan all with per second billing plus the $2.49 Plan and $2.89 Sweet Plan with per minute billing.

Digicel Jamaica CEO, Barry O’Brien commented; “We asked our customers what they wanted and the answers we got were great value, lots of choice and more freeness.”

The details of each plan as provided by Digicel are:

Digicel_logo150x150The Brawta Plan and Gimme Five Extra Plan see customers getting even more freeness than they got with Gimme Five. Customers will now get 55 minutes of free Digicel Talk, 200 free Digicel Texts, 10 MB of free Data with free Nights, 55 free International minutes, monthly free Credit and Cash Back after talking for five minutes, sending five texts or topping up with $200 or more.

The Double Bubble Plan with per second billing sees customers getting double the value of their credit every time they top up with $200 or more. But that’s not all. Double Bubble customers will also get 10 minutes of free Digicel Talk, 10 free Digicel Texts and 25 free International minutes once they have talked on net or internationally for five minutes or sent five texts.

The $2.99 Plan with per second billing means customers get a great low rate on net and to the other mobile network at any time.

The $2.49 Plan with per minute billing is perfect for those customers who make longer calls and want the lowest rate in the market. Both of these new $2.99 and $2.49 Plans come with 25 free International minutes after the first five minutes.

Best suited to customers who like making long calls, the $2.89 Sweet Plan with per minute billing offers 10 minutes of free Digicel Talk, 100 free Digicel Texts, 10 MB of free Data with free Nights, 25 free International minutes, free Credit and Cash Back to customers once they have talked for five minutes, sent five texts or topped up with $200 or more.

Digicel Jamaica CEO, Barry O’Brien, continues; “We know that everybody loves freeness and presently over half our customers talk time is free and over 90% of Digicel texts sent are free.  For example, with the new Gimme Five Extra Plan, with Free after 5, a customer now gets 200 free texts which equates to $600 of free texts when you spend $15.”

To guarantee the customer experience, Digicel invested $7 billion in network improvements and upgrades last year and a further $3 billion investment is planned for this year.


New president at Scotia International

Rick Waugh announces his retirement from Scotiabank effective January 31, 2014. Brian Porter, former chairman of Scotiabank Jamaica, to take on role of President and CEO effective November 1, 2013.

(TORONTO) May 31, 2013Scotiabank Chief Executive Officer Rick Waugh today announced his intention to retire as CEO effective November 1, 2013 after 10 years in the role and 43 years with the Bank. He will remain a Director of the Board and assume the role of Deputy Chairman of the Bank until January 31, 2014.

The Board of Directors has appointed Brian Porter to the role of President and Chief Executive Officer effective November 1, 2013. Brian was appointed to the role of President on November 1, 2012, and just prior to that was Group Head, International Banking, overseeing all of the Bank’s personal, small business and commercial banking operations in more than 55 countries outside of Canada. Brian was also Scotiabank’s Group Head of Global Risk Management and Treasury. He joined Scotiabank in 1981, and has held a variety of other management positions, including Deputy Chairman of Global Banking and Markets.

“Rick Waugh has guided Scotiabank through a period of tremendous growth, generating exceptional returns for shareholders and employees during some very turbulent times. His focus on customers, diversification, emerging markets and risk management along with his strong values, has shaped the growth and direction of the Bank over the last ten years,” said John Mayberry, Chairman of the Board.

scotiabanklogo150x150The Board expressed its confidence in Brian Porter appointing him President in November 2012. Mayberry added, “We are pleased to take the next step in succession today by confirming him in the role of President and CEO effective November 1, 2013. Brian has a tremendous range of experience across the Bank, including the critical role of Chief Risk Officer. The Board is confident in Brian’s ability to continue to produce strong results and build on the straightforward and proven business model that has worked so well for customers, shareholders and employees.”

“I want to congratulate Brian Porter on his appointment to President and Chief Executive Officer,” said Rick Waugh, CEO, Scotiabank. “He has had an exceptional career at Scotiabank. Brian and the management team bring the right experience, values and culture to ensure our Bank’s continued success.”

“It is a distinct privilege to have been entrusted with the role of President and Chief Executive Officer, and I would like to thank the Board of Directors and Rick Waugh for their confidence in my ability to continue to deliver superior, consistent and predictable results for all of our stakeholders,” said Brian Porter, President, Scotiabank.

Scotiabank is a leading multinational financial services provider and Canada’s most international bank. With more than 83,000 employees, Scotiabank and its affiliates serve some 19 million customers in more than 55 countries around the world. Scotiabank offers a broad range of products and services including personal, commercial, corporate and investment banking. In December 2012, Scotiabank became the first Canadian bank to be named Global Bank of the Year and Bank of the Year in the Americas by The Banker magazine, a Financial Times publication. With assets of $754 billion (as at April 30, 2013), Scotiabank trades on the Toronto (BNS) and New York Exchanges (BNS). For more information please visit

UDC sells hotel shares for US$11.2m

The Urban Development Corporation (UDC) has concluded the sale of its 50% stake in Bloody Bay Hotel Development Limited (BBHDL) to Village Resorts Limited (VRL), which owned the other 50% of the company. VRL, in response to the UDC’s offer, had expressed its desire to exercise its pre-emptive right to acquire the UDC’s shares in BBHDL in June 2011. Cabinet approved the sale of the shares to VRL in January 2013 and the sale transaction was finalized in March with the signing of an agreement on 27 March 2013.

The gross transaction proceeds realized by the UDC was US$11.2M, which included US$9.5M for the real estate and related fixed assets, and US$1.7M representing UDC’s share of cash and other liquid assets of BBHDL at the date of the sale agreement.

BBHDL’s principal asset was Breezes Grand Resort & Spa, Negril, (formerly Grand Lido Negril) a 210 suite all-inclusive property located in Negril, Hanover.

NegrilBreezes150x150VRL secured an agreement to sell the hotel’s real property and other assets owned by BBHDL to BBNH Resorts Limited, which will further develop and expand the hotel utilizing lands acquired through the sale transaction. BBNH is an affiliate of Blue Diamond Hotels & Resorts Inc. The expansion will be in accordance with the UDC’s overall plans for the development of the area.

Blue Diamond’s portfolio of hotels also includes, in addition to Breezes Negril, the former 350-room Breezes Trelawny/Starfish Beach Hotel purchased in June 2012, which will re-open as Royalton White Sands in October 2013. With the acquisition of Breezes Negril now complete, Blue Diamond has rebranded the property as the Grand Lido Negril Resort & Spa. The same name was used by former owner SuperClubs when the company opened the resort in 1989 before rebranding it as a Breezes property in 2009.

“The Grand Lido brand has long been synonymous with top-quality accommodations, service, cuisine and beach settings. This is the first resort to be relaunched under our Grand Lido brand,” said Jordi Pelfort, managing director of Blue Diamond.

Blue Diamond is a division of the Toronto-based Sunwing Travel Group.