More growth for Grace

March 10, 2021 by

Fresh from a record-breaking profit performance in 2020, Grace Kennedy announced the signing of an agreement to acquire all the shares of Scotia Insurance Eastern Caribbean Limited subject to regulatory approval.

Grace Kennedy HQ in Kingston

Scotia Insurance operates in seven countries in the Eastern Caribbean: Anguilla, Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines. Scotia Insurance offers credit protection regionally to customers of Scotiabank on personal loans, residential mortgages, personal lines of credit, personal and small business credit cards.
According to Don Wehby, CEO of Grace Kennedy, “the operation is profitable but not highly profitable”. Grace’s ownership is likely to result in lower operating cost and a vehicle to do business in other countries and for other financial institutions.
In an investors briefing on Monday, Wehby stated that the proposed acquisition is one of ten that the group is looking at currently, at various stages of assessment or negotiation, including some being stress tested and others at the legal stages.
Wehby in answer to a question on the growth rate of 2020 continuing into 2021 confirmed, that it will as the 2020 growth was achieved after years of work to lay the foundation for it to happen.
tTech limited is a Junior Market that seems set to benefit when the acquisition is concluded, the extent of its involvement will depend on the technology in use and whether the acquisition will continue to utilize the current infrastructure or not. tTech is a major Information Technology supplier to Grace.
Grace is listed on the Jamaica Stock Exchange and currently trades at $90.99, the shares are trading on the Trinidad and Tobago Stock Exchange at TT$4.50, in line with the JSE price.

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Barita acquires 20% of Derrimon Trading

February 26, 2021 by

Barita Investments now owns 20% of the issued shares of Derrimon Trading Company following the closing of the Derrimon additional public offer of shares, Barita disclosed in a release to the Jamaica Stock Exchange.

Barita headquarters.

Commenting on the investment, Jason Chambers, Director of Barita and Chief Investment Officer of Barita’s parent company, Cornerstone, said: “The Board of Directors of Barita and the leadership team of Cornerstone are very satisfied with this investment as Derrimon embodies several of the characteristics we typically look for in assessing investment opportunities. DTL has built up an enviable track record of growth and value creation, and the management has demonstrated their ability to achieve scale both organically and through the successful integration of several accretive acquisitions. Barita has, over the course of the last two-plus years, established significant capacity to expand its portfolio of investments into sectors that are viable alternatives to traditional ones that are now fully priced in our view and therefore not likely to generate alpha for our shareholders in the medium to long term. This minority acquisition should be seen as a by-product of our increased investing capacity as we prudently seek to unearth both value and growth-oriented investment opportunities within the context of the current global investment landscape.”
Chambers continued, “We also note the diversification factor that this investment adds to our portfolio as it provides exposure to the real sector via a company which has recently begun an international expansion.

Mayberry tried trading 420m Derrimon Trading shares but the transaction was disqualified.

At Cornerstone and Barita, our goal is to positively impact the lives of our stakeholders through the tireless pursuit of opportunities that provide solid risk-adjusted returns throughout their investment horizons. We believe this investment is aligned with that ethos and we look forward to collaborating with the team at DTL to the mutual benefit of our collective stakeholder groups.”
Paula Barclay, General Manager of Barita, in commenting on the Company’s investment in Derrimon, stated: “At Barita, we continuously seek out unique strategic opportunities to build shareholder value while balancing the interests of our clients, team members, and other key stakeholders. We are confident that our association with a company like Derrimon will only contribute positively to our overall future performance. Consummating this investment took significant effort from the team at Barita and I would like to take this opportunity to extend my gratitude to them for their hard work.”
Barita Investments is a publicly-traded Securities Dealer listed on the Jamaica Stock Exchange and majority-owned by Cornerstone Financial Holdings.
Derrimon Trading is listed on the Junior Market of the Jamaica Stock Exchange and distributes dry and frozen bulk commodities. It also operates retail outlets and Supermarkets.
The shares of Barita are trading at $81.14 and Derimon at $2.56 on early Friday morning after the release.

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Tropical Battery IPO oversubscribed

September 28, 2020 by

oThe Tropical Battery issue of 325 million ordinary shares at $1 each opened on Tuesday, September 22, was oversubscribed. The company exercised the option to close the offer early at the end of the opening day.
The offer comprised shares sold by existing shareholders and by the company. The net proceeds that the company will get will be for expansion and upgrading of the operating facilities and working capital needs.
Earnings per share are around 7.7 cents, putting the stock is price value at a PE ratio of 13 times 2020 earnings, leaving little or no room for short term gains, with it, priced 19 percent above the market average.
NCB Capital Markets, brokers for the issue advised that applicants of reserved shares will be allocated in full while applications in the General Public Pool will receive the first 50,000 units plus approximately 30.6499 percent of the excess shares they applied.
All monies to be refunds will commence next week Wednesday, September 30, will be processed as per their instructions on the GoIPO platform. Refunds to all other applicants will be made to the respective broker.
The company is t listing on the Junior Market of the Jamaica Stock Exchange with the profit for the next five years not subject to corporate taxes and the following five year period resulting in taxes paid at 50 percent of the regular rate.
The listing will take the number of Junior Market companies to 41 and the 44th company to be listed on that market since 2010.

Filed Under: Company News, General Business News, Initial Public Offers

More US$ for NCB Financial Group

September 28, 2020 by

NCB Financial Group went to the international market to raise US$175 million in funds from the issuance of diversified payment rights for payments due from correspondent banks, up the amount taken to US$250 million.

NCB Financial Montego Bay branch

According to the banking group in a release on September 22, “the Board of Directors of National Commercial Bank Jamaica has approved an upsizing of the Securitization of its Diversified Payment Rights to up to, Two Hundred and Fifty Million United States Dollars following an oversubscription of the transaction.” The transaction will be rated by FITCH Ratings and placed in the International private placement market by Westwood Capital LLC, as Arranger.
The transaction will swell the pool of foreign currency the bank will have at its disposal for lending or investing. At the end of the 2019 fiscal year ending September, NCB Group owed just US$50 million but owed US$309 million on Merchant voucher receivables.
NCB Group is listed on the Jamaica Stock Exchange and owns the majority of shares in Guardian Holdings, a Trinidadian based listed company and Clarien Bank in Bermuda.

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IPOs are back the Tropical issue

September 15, 2020 by

Just when investors thought COVID 19 had killed off IPOs for this year, suddenly pops up, Tropical Battery‘s long-promised initial public offer. The prospectus for the issue is now available to the public.
The issue for 325 million ordinary shares at $1 each of with up to 187.5 million units reserved for priority applications, opens September 22 and is scheduled for closing on September 30, subject to the right of the Company to close it earlier.
The Company intends to apply for the shares to be listed on the Junior Market of the Jamaica Stock Exchange, subject for at least $260 million being raised, by way of this invitation.
The total issued shares following the offer will be 1.3 billion units, with the parent company owning 75 percent. That will allow enough shares to be in the public hands to facilitate adequate liquidity in the stocks for some time.
The Company generated profit before tax of $87 million from revenues of $1.74 billion in 2019, a decent increase of 18.6 percent higher than in 2019 and a pretax profit of $45 million from revenues of $1.47 billion in the prior year, to September or 8.6 percent above the 2018 sales.
Gross operating revenue for the nine months to June this year increased nine percent to $1.36 billion from $1.25 billion in 2019, with profit before taxation falling from $67.6 million to $62 million.
Future growth, the Company says, “will come primarily from the addition of new product lines, i.e., Renewable Energy Batteries, Oils and Lubricants, Tyres, etc., organic growth of existing products, expansion and the renovation of our retail stores.”
The proceeds of IPO will be split equally between the selling shareholder and the Company, resulting in $162.5 million going to each, net of cost.
The Company plans to use the amount collected for expansion and working capital purposes, including but not limited to new product lines, expansion and renovation of retail stores, including an expansion of the parking area at the retail store at Grove Road in St Andrew. Completion of the buildout of and relocating to the new warehouse, head office and retail store at Ferry, Acquiring and install information technology systems for greater efficiency and improve customer experience and expansion of Mobile delivery fleet of vehicles.
Total shareholders’ equity at the end of June stands at $593 million, while our long term liabilities fell by to $315 million with the total interest-bearing debt of $415 million. The Company is owed $190 million by a related party and is interest-free, but payable on demand.
With earnings per share around 7.7 cents, the stock is priced around a PE ratio of 13 times 2020 earnings, leaving little or no room for short term gains.
NCB Capital Markets are the brokers for the offer. Unfortunately, for investors, there are no forecasted earnings included in the prospectus to help to guide them. This practice leaves a lot to be desired and it is fulltime, the authorities step up to the plate and ensure that all prospectuses include forecasted data for a least three years. That is not asking too much in the drive to build a developed capital market.

Filed Under: Company News, General Business News, Initial Public Offers Tagged With: , , , ,

10 to 1 stock split for Caribbean Flavours

August 21, 2020 by

Caribbean Flavours and Fragrances (CFF) is set to split their stock, subject to the approval of shareholders at a meeting to be held to consider the matter.
The company will hold a special board meeting on August 27, to consider the approval of resolutions to increase the authorized share capital and approve Stock Split.

Caribbean Flavours a Derrimon’s subsidiary

Based on the release from the company, the approval by shareholders will result in the authorised share capital moving from just 91.452 million shares to 2,6 billion, by the creation of an additional 2.509 billion shares. Each existing issued share will be subdivided into 10 ordinary shares with effect from the close of business on September 23. The split will result in the total issued shares increasing from 89,920,033 shares to 899,200,330 shares.
The company should consider increasing the authorized share capital to an unlimited amount that will not cost them any more funds in doing so and would give them greater flexibility. CFF recently released quarterly results with revenues rising 42 percent in the June quarter to $161 million, with profit before tax rising 18 percent to $30 and revenues rose 37 percent for the six months to $311 million, with pre-tax profit rising by 23 percent to $49 million.
The stock closed trading on Friday at $14.95 with just two lots of stocks on offer at the close.

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NCB starts group rationalization

July 2, 2020 by

NCB Financial Group announced the commencement of the streamlining of the group’s insurance portfolio. The move is in keeping with one of the rationales for acquisitions, to maximize returns from combining two or more entities.

NCB Financial Head Quarters in Kingston

According to NCB “in a bid to strengthen its Jamaican insurance portfolio and optimise its product and service offerings and customer experience, NCB Financial Group has begun the process of streamlining the insurance business currently offered by its competing subsidiaries – NCB Insurance Company and Guardian Life”.
NCB Insurance made applications to the Financial Services Commission seeking approval for the transfer of NCB Insurance of insurance and annuities business portfolio to Guardian Life and for the NCB Insurance to become licensed dealer under the Securities Act and to be registered as an insurance agent under the Insurance Act.
The submission also indicates that the application for approval of transfer of business and the application for registration as an insurance agent are contingent upon each other. If approved, these applications will allow NCBIC to discontinue its business as an insurance underwriter, retain and continue to operate its business as a Pension Fund Administrator and Investment Manager, while selling insurance products as an exclusive agent of Guardian Life under a new company name.
Other areas that investors can look forward to for cost-cutting will be in administrative costs, marketing, while the merger of the investing arms locally and overseas will bring enormous benefits.

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Traffic returning to Highway2000

June 16, 2020 by

Toll transactions for the first two months of 2020 were increased 2.1 percent increase over to the same period last year at Trans Jamaican Highway, the company reports in a news release to stakeholders.
The impact of national measures taken to limit the spread of the Coronavirus weighed on motorway traffic since mid-March 2020. “The decrease in traffic for March was 19.3 percent following the closure of schools, all-island curfews and the ‘work from home’ order issued by the Government of Jamaica for non-essential workers,” the release stated. According to the company, April, “saw a significant decrease of 52 percent when compared with April 2019, due to additional measures introduced such as the lockdown of the parish of St Catherine, which started on April 15.”
“The end of this confinement on May 1, was immediately followed by an increase in traffic on the motorway, as the decline fell to 34.2 percent when compared to May 2019. The trend being observed thus far for June 2020 is down 20 percent compared to the previous year,” the statement continued to say. The company estimates that the overall decline for the first semester of 2020 will be close to 20 percent.
“It is to be noted that the initial forecasts for 2020 showed traffic growth of around 1 percent compared to 2019 where the number of transactions were 24.2 million (66,223 vehicles per day)”, the statement concluded.
The company’s stock is listed on the Jamaica Stock Exchange and closed trading on Tuesday at $1.33 on the Main Market, down from the IPO price of $1.41.

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QWI recovers 26% of lost value

April 13, 2020 by

QWI Investments‘ net asset value (NAV) per share surpassed the $1 mark again in hitting $1.01 per share at the close of the markets on Thursday. The NAV is up 26 percent from the lows reached in March.
The share price tumbled over the past month with the fall in the overall market, in sympathy with the fall in the net asset value per share to a low of 80 cents on March 20 but recovered some lost ground to close on April 3, at 93 cents per share. The stock traded on the Jamaica Stock Exchange as low as 63 cents on March 10 with that price proving to be a bottom so far. The price moved upwards to close on Thursday at 83 cents for a rise of almost 32 percent since the low in March.
The Company’s investment portfolio is invested in stocks that are listed on the Jamaica Stock Exchange, USA stock exchanges, with a few stocks that are listed on the Trinidad and Tobago Stock Exchange.
The local stock market has seen a V-shaped recovery over the past three weeks, and if this continues into the fourth week, it could result in more gains in the NAV for the Company. The stock is listed on the Main Market of the Jamaica Stock Exchange.

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Sweet River delisted from Junior Market

February 10, 2020 by

Sweet River Abattoir and Supplies became the first Junior Market company to have its shares delisted from the Junior Market of the Jamaica Stock Exchange.
The delisting is effective on Monday, February 10, 2020. According to the Jamaica Stock Exchange, “the delisting is in accordance with Junior Market Rule 505 (14) (a) (i) and the Company’s failure to remedy Board Level and financial requirements breaches.
Sweet River was listed in2014 and the shares were undersubscribed, leaving the company short of critical working capital to function properly, as it embarked on building out a new abattoir. The targeted in the IPO was to raise $180 million from the sale of 46.6 million shares to the public, but subscribers only applied for approximately 30.6 million shares amounting to $118 million. Recently, the company’s land and buildings were auctioned off and acquired by the purchaser for far less than the more than $300 million they are recorded on the books.
Sweat River ran up losses of $124 million up to June 2019, according to the last interim report the company released to the JSE and had a net worth of just $19 million.

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