Company News — Page 148

Trinidad PE moving slowly

January 3, 2014 by IC Insider.com

Friday, 3rd January 2013 | The only significant movement to take place during the week on the Trinidad Stock Exchange is the continued rise in the stock price of First Citizens but that had little effect on the potential gains for the company as shown on our PR Chart. The stock closed the week at a record $72.61 price.

For others that had gains during the past week, the movements were even less impactful on potential gains. Trinidad Cement’s gain during the week helped to reduce the gains going forward while Republic Bank keeps inching up but still has much room to cover before it becomes fully valued.

By the looks of the IC Insider PC Chart to start off the New Year, the Trinidad market is poised to enjoy another year of healthy gains for some stocks.

The Top Stocks with potential gains by PE Ratios are Trinidad Cement leading with 291%, Berger 206%, Guardian Holdings 202%, National Flour 178%, Neal & Massy 133%, Point Lisa 116%.

Stocks with less than 100% potential gains are Republic Bank, OC Media, Prestige, Agostini and Citizens Bank, who has given investors over 96% gains (including dividends) in the 5 months since listing as an IPO in August, 2013.

Filed Under: Company News, Stock Market, Stocks to watch, TTSE Market Tagged With: PE Ratios, TTSE

Knutsford Express share allotment

December 31, 2013 by IC Insider.com

Knutsford Express Services’ IPO of 20,000,000 ordinary shares at the price of J$5,11 per share was oversubscribed on Friday December 27,2013 with only 66 applications received.

All Reserved Share applicants will receive 100% of the amount of the Shares for which they applied. Applicants for the general pool with 5,000 or less units will receive the full amount. The remaining applications will be allocated at approximately 97.477 percent of the application amount. Refund cheques will be available for collection from Proven Wealth Ltd on Monday January 6, 2014.

The Jamaica Stock Exchange voted today, Tuesday December 31, to block the listing of the company’s shares that should have started trading this morning. IC Insider understands that the company had moved a belated resolution to allot shares to some directors thus increasing the amount of shares in issue, as well as the value of those shares, in an attempt to get listed before the year closed. That resolution, however, would have been improper as it conflicted with the terms of the prospectus, which incorporated all material contracts the company had at the time Investors would have applied for shares in the public offer, and the change would in all probity, require the approval of the new investors to approve same.

Filed Under: Company News, Initial Public Offers, JSE Main Market, Stock Market Tagged With: JSE Company, Knutsford Express

JSE rejects Knutsford Express

December 31, 2013 by IC Insider.com

Investors in the latest IPO to hit the market Knutsford Express may have to wait awhile to see their shares listed on the junior market as the Jamaica Stock Exchange (JSE) this morning rejected the application to list only a few days after the sponsoring broker Proven Investments advised the stock exchange that the IPO was officially closed at 4:00 pm Friday, December 27, 2013 and that the offer has been fully subscribed. The company was trying to beat the December deadline in order to enjoy the ten years tax holiday.

The stock exchange deliberated for a long time on Monday but came to no decision as the company did not meet the minimum requirement of issued share capital of $50 million. The stock was included in the list of companies for trading at the end of Monday with the symbol KEX, but when trading started today, it was no longer in the list of tradable companies.

This is the first time in the stock exchange history that a company has gone to the public and raised the required sum as set out in the prospectus that the stock exchange has refused to approve the application. The development is black eye on the Jamaica Stock Exchange and the sponsoring broker. The stock exchange and the Financial Services Commission would have reviewed the prospectus and ought to have been aware of any deficiencies that could have derailed the listing before giving the approval.

It appears that the stock exchange could have sanction the go ahead for listing as Section 502 of the rules governing listing of junior market companies states:

An eligible company shall, for the purposes of its initial admission, issue participating voting shares by way of an initial public offering subject to a prospectus seeking a minimum subscription of new shares (or allotment of existing shares) of not less than J$50 million and not more than J$500 million only.

It appears that the company complies with this provision. The problem is that the issued value of the shares on its books after such issue would only amount to $25 million even as the equity of the company would be more than $100m.

Related Posts | Knutsford IPO gets in before door closes

Photo courtesy of Knutsford Express social media

Filed Under: Company News, General Business News, Initial Public Offers, JSE Main Market, Stock Market Tagged With: JSE Company, Knutsford Express

Scotiabank T&T making headway slowly

December 31, 2013 by IC Insider.com

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Most banks in the English speaking Caribbean are facing challenging economic environment with slow growth and moderate increase in profits.

The stalemate in the Trinidad & Tobago economy has not left Scotiabank out of its reach. The bank is reporting net income after tax of $561 million for the year ended 31 October 2013, an increase of $15.6 million or 2.9% over the same period last year. The profit flowed from revenues of $1.389 billion in net income versus of $1.287 billion in 2012. Of note is the increase in income in the last quarter of $384 million or 16 percent over the $331 earned in 2012. The increased income came all from other income not net interest.

Profits after tax rose by 11 percent or a faster pace than the full year’s growth and may be an indication that the pace of growing profits may well be picking up. However, the pace is so low that a clearer picture may have to await the first quarter results. There was no growth in the main income generator of lending with loans standing at $10.576 billion at the end of the year compared to $10.45 as of July but from $9.96 billion at the end of October 2012. Total Assets ended the period at $19.5 billion, representing growth of 10.2% or $1.8 billion over the comparative period in 2012.

“Conditions in the domestic economy remain challenging, with continuing margin compression due to persistently low interest rates and high liquidity. It is against this backdrop that the Bank continues to focus on growing income through building and maintaining strong customer relationships and diversification of its revenue base through the launch of new products and services. Our strategies to manage credit quality and recoveries continue to bear fruit as evidenced by the reduction in credit losses year over year. Finally, we continue to manage expenses while ensuring we invest in our brand, people and infrastructure” management reported to shareholders.

On the basis of the results, Directors resolved that the Bank pay a fourth interim dividend of 40 cents per ordinary share and a special dividend of 30 cents (32 cents in 2012, plus a special dividend of 28 cents) on 7 January 2014 to shareholders on record at 9 December 2013.

Filed Under: Company News, Company Results Tagged With: Scotia, TTSE

FCIB gets punched

December 30, 2013 by IC Insider.com

For the fiscal year ending October 2013, First Caribbean International Bank generated $530 million in revenue, down from $543 million in 2012 but reported lousy net results of a loss for the year of $27.5 million compared with a profit of $72 million in the prior year.

The Bank would have generated $29.6 million of net income for the year but results were affected by a number of factors. Of note they incurred $37.6 million ($35.5 million after-tax) of restructuring expenses and an increase in the collective allowance for loan losses of $25 million ($21.6 million after-tax). The bank took a $151 million loan loss hit, an increase from $120 million in 2012. The 2013 write off is 2.4 percent of the net loan of $6.3 billion with loans falling from $6.8 billion in 2012.

FCIB saw operating expenses going in the opposite direction to income as expenses grew from $348 million in 2012 to $403 million but the 2013 amount would include the restructuring cost mentioned above.

Total assets also declined to $11.4 billion from $11.5 billion in 2012. Customers’ deposits remained at $9.6 billion, roughly the same as the year before. (All figures are in US dollars).

The bank, in its report to shareholders, states that “Many of the economies in which we operate rely heavily on tourism and foreign direct investments. The overhang from the economic crisis continues to impede growth and by extension has negatively affected our results. Loan loss provisions this quarter were higher than normal and include an increase in the collective allowance. The Bank is focused on pursuing risk-controlled growth and has taken considerable steps during the year toward the goal of becoming a lower risk bank. While never easy in these difficult times, we have also taken the decision to right size the organization, to redefine how we operate and to address our cost structure. The restructuring we are undertaking will position us for future cost savings and give us the ability to serve our customers better. As we continue to pursue our strategic priorities, our Bank has recorded some significant successes this year. We have introduced new and relevant products to better serve our clients and continue to leverage the capabilities of our parent and majority shareholder, CIBC.

Our focus on addressing operational and administrative concerns has also led to improvements in the client experience”.

“Our Wholesale Banking segment has recorded significant strides in client service delivery. During 2013, we have significantly removed operational and administrative activities away from the front-line personnel to ensure Corporate Managers and Client Service Officers allocate more time to work and interact with, and provide solutions to clients. We have also streamlined and strengthened our credit adjudication processes to further enhance efficiency. In our Retail and Business Banking segment we have invested heavily in developing a series of products and services to enhance our customer experience”.

The bank states that, “We have also continued our investment in upgrading our branches and network of Instant Teller machines. Focusing on customer experience, we have expedited our account opening times through an innovative continuous improvement process. In the Wealth Management segment we have leveraged the strong Axiom Mutual Funds capability in our parent and majority shareholder, CIBC, to manufacture a Caribbean based version of these funds suitable for international investors who have funds and wealth managed through the Caribbean. We have also strengthened our capability to service our Wealth Management clients with the integration into our bank of the CIBC Bank & Trust business, located in the Cayman Islands and the Bahamas, further widening the scope of clients we can assist and the range of services we can provide”.

A final dividend for the year of $0.015 per share was declared. With some of the cost not likely to recur and reduction in others flowing from the restructuring, profits should pick up in 2014 if the asset base can be held and no more major loan write down.

Filed Under: Company News, Company Results Tagged With: First Caribbean, JSE Company, TTSE

Knutsford IPO gets in before door closes

December 24, 2013 by IC Insider.com

Investors will have just one day to subscribe to shares in Knutsford Express, the latest IPO to hit the market, that is scheduled to open on December 27 as the company gets in just before the door closes on the 10 year tax break for junior market companies. The issue is scheduled to close on the same day.

The Company invites Applications on behalf of itself and the founding shareholders for 20,000,000 Ordinary Shares in the Invitation of which 4,867,338 shares are newly issued shares for subscription that will raise net of $20 million for the company and 15,132,662 shares are existing shares of the current shareholders. At the end of the IPO, the total number of shares issued will be 100 million, an increase from the 95,132,662 now in issue.

The Company intends to use the proceeds for working capital support, acquisition of one new coach and upgrade of existing coaches and payment of the expenses of the Invitation, estimated not exceed $4 million. Applications from the general public must be for a minimum of 100 Ordinary Shares and be made in multiples of 100. A processing fee of $110 per Application is payable to the Registrar of the Company (JCSD) and is payable by each applicant. Proven Wealth are the brokers for the issue.

Free Advertising | This company should be known by most as it earns free publicity just by its vehicles plying the routes proudly displaying its name and logo for all to see. Many have seen it between Kingston and Monetgo Bay and recently from Kingston to Negril. Knutsford Express seems set to be the next company to list on the stock exchange as it seeks to raise only a small sum for itself and some for its owners. The company, which has reported a profit from 2009, has filled a big gap left by Air Jamaica Express ending service between to two major cities. Customers seem to be impressed with the quality service and timeliness and the growth speaks volumes.

Revenue has increased by 27 percent in 2010 to $99.4 million from $78 million and in 2011 the growth inched to 28 percent to $127.5 million and jumped by 33 percent in 2012 to $170.4 million. In 2013 it moved to $203.2 million and increase of 19 percent, the slowest year so far. Profit rose from $7.9 million in 2009 to reach $51 million in 2013 with growth of varying percentages for each of the years. The last being 2013, with an increase of $30 million or 135 percent.

Revenues | Revenue of $ 71 million, a $17 million or 31% percent increase was generated for the first quarter of the 2014 financial year compared to the similar period in 2013 and flowed primarily from an increase in business from existing routes. Management projects further growth in revenue from the South Coast expansion in the third and fourth quarters. However, the expansion has led to an approximate $18 million increase in administrative and general expenses.

The Company recorded other income of $4.7 million derived from settlement of an insurance claim and as at August. Profit before tax stood at $21 million, a twenty-five percent (25%) improvement compared to the first quarter of 2013. Without the insurance inflows earnings would have been flat with 2012 of $16.7 million. The first quarter numbers suggest profit from ongoing operations of approximately 70 cents per share, that may be a tad high with seasonal factors affecting revenues and cost.

Asset base grew by fifty-two percent predominately due to growth of the fleet or “investment properties” which increased by twenty-one million to $75 million. In addition, accounts receivables grew to $18 million stemming from a deposit made on a coach. Approximately $8.8 million is due from Total Waters Limited, a related party, and settlement of this amount is expected in the third quarter of 2013/14. “There was also an inflow of $40 million from a facility used to expand our fleet for which a restriction was placed on a term deposit.” the company stated. Shareholders’ equity expanded to approximately$105 million. Loans payable of $49 million and cash funds of $15 million were on the books at the end of August. Current liabilities stood at $13 million and is mostly tax payable, while current assets stood at $61.5 million.

Who are they | Knutsford Express Services is a transportation company dedicated to offering customers an intercity luxury coach experience in Jamaica. The service began on June 1, 2006 with twenty-eight (28) departures weekly between Montego Bay and Kingston and now have one hundred and five (105) departures weekly and expanded this reach to Falmouth, Negril, Savanna-La-Mar, and Mandeville. The Company is required to hold Express Carriage Licenses for each bus in its fleet. Carriage licences are issued by the Transport Authority and are renewable on March 1st each year.

Principals & Directors | Oliver Townsend is the Managing Director and Chairman of the Company. Mr. Townsend has served in the Tourism & Service Sector for over 24 years in various management capacities including those that involved marketing locally & overseas. His career began in Caribic Vacations, a family-owned Destination Management Company, where he served as Director of Transport and C.E.O.

Gordon Townsend is a Director and Company Secretary of the Company. Prior to joining the company he has served for over 40 years in the Tourism Industry where he has held numerous positions. His career in tourism began as a hotelier where he served as Managing Director of Montego Bay Club Resort for 11 years. In 1982, he shifted his focus to his own newly formed company, Caribic Vacations, a Destination Management Company which provided hosting, transportation and other holiday services to the Tourism Industry where he remains as Chairman.

Anthony Copeland is a Director of the Company with special focus and responsibility on Operations, Maintenance and Standards. Copeland began his career in the Private Sector at Manhattan House in the area of Marketing before leaving to serve his country, which led to 18 years in the Jamaican Defense Force in the Engineering Regiment. With this expertise gained in Transport and Logistics his career led him in 1996 to become the Technical Advisor in Metropolitan Management Transport Holdings.

Peter Pearson is a graduate of Cornwall College and a graduate of the University of West Indies from which he holds a BSc. Peter is a Fellow of the Institute of Chartered Accountants and a Fellow of the Chartered Association of Certified Accountants. He retired as a partner of PricewaterhouseCoopers in 2013.

Mr. Wayne Wray is the Mentor to the Board for the purposes of the Junior Market Rules and has several years’ experience within the financial sector.

Stock Value | The stock is priced around 7 times 2014 earnings before taxation, which is not highly attractive but appealing with the rate of growth they have been enjoying, although that could slow down as the market matures.

Price to book is 5 to 1, which is somewhat on the expensive side compared with other junior market companies but the growth makes up for it. It appears that investors should hold some of these but don’t expect a ton loan of gains in the short term.

Filed Under: Company News, General Business News, Initial Public Offers, JSE Main Market, Stock Market Tagged With: JSE Company, Knutsford Express

D&G $1billion pay day

December 23, 2013 by IC Insider.com

Desnoes and Geddes (“D&G”) advised the Jamaican Stock Exchange that they have sold their 5% shareholding in Brasserie Nationale d‟Haiti (“BNH”) and their 10% shareholding in Windward & Leeward, St Lucia (“W&L”) to Heineken (“HKN”) on 19th December, 2013 for a total value of J$982,486,000 (US$9.26 million).

“This is the right time to dispose of these minority shareholdings as we have ambitious plans for Red Stripe with several major initiatives being undertaken. These include the installation of our co-generation plant, plant optimization and Project Grow, which is the conversion to locally sourced raw materials. We are focusing on growing the Red Stripe business locally and internationally,” commented Cedric Blair, Managing Director of Red Stripe.

“The breweries in Haiti and St. Lucia will continue to brew Guinness under license for Diageo, in addition to the other licensed breweries in Guyana, Trinidad, the Bahamas, St. Vincent, Belize, Grenada, St. Kitts, Barbados, Panama, Dominica and Antigua.” added Blair.

The sale is not a surprise as the company had reflected the values as investment available for sale in the last audited financial statements at a value of $960 million. The value was determined by professional business valuators based on an a recent bid made for the shares by a third party, suggesting the company’s intension to sell.

Related posts | Profit inches up at D&G | D&G poor 4th quarter

Filed Under: Company News, General Business News Tagged With: D&G, JSE Company

First Citizens paying 12% dividend

December 23, 2013 by IC Insider.com

Trinidad’s First Citizens Bank has declared a $1.09 per share final dividend that will be paid January 24, 2014 to shareholders on record as of December 31, 2013, the Ex-dividend Date is December 27.

The dividend is equivalent to a 12 percent rate of return on the initial IPO price of $22 per shares in August. That adds to the return of 78 percent on the stock price for those persons who were able to get shares at the IPO price and hold them till the XD date. The dividend policy of the First Citizens Bank is to distribute to its ordinary shareholders funds surplus to the operating capital and strategic requirements of the Group, as determined by the Directors, with an annual target dividend pay-out percentage range of 45 to 55 percent of net profit after-tax. The 2013 dividends translates to around $273 million versus $263 million paid for 2012.

The bank reported profits of $742 million before tax and $606.5 million after tax compared to 2012 pre-tax profit of $714 million and $446 million after tax but the big increase after tax is due to tax adjustment in 2012 that depressed the aftertax profit.

In the prospectus, management in commenting on a large jump in tax liability indicated, “In 2012, the Group recorded a taxation charge for the year of $267.8 million. This was due to management re-assessing its tax strategy in relation to the pursuit of tax benefits to be derived from derivative instruments. This change in strategy, which was done after careful evaluation of all relevant factors and in consultation with its tax advisors but prior to the filing of its 2011 corporation tax return, resulted in a difference between the tax liability as per the tax return for 2011 and the estimate of the tax provision recognised in the financial statements for the year ended September 30, 2011, as well as changes to the deferred income tax estimates. This change in estimate, amounting to an additional one-off tax charge of $128.3 million in 2012, was recognised in the income statement in 2012”.

The stock has been moved back into the IC Insider Buy Rated List with earnings per share of $2.45 and a target price of $55-60 in 2014.

Filed Under: Company News, Dividends Tagged With: Dividends, First Citizens, TTSE

KLE: Are they fleeing a sinking ship?

December 23, 2013 by IC Insider.com

Yet another director of KLE Group has jumped ship. The latest resignation is that of N. Patrick McDonald, who has resigned as a Director with effect from December 15, 2013 and as Member of the Audit Committee with effect from December 15, 2013. This comes on the heels of the resignation of Joseph M. Matalon as a Director and Chairman also with effect from December 15, 2013.

KLE Group Limited, which went on the market at an overpriced company, has seen a worsening financial outcome before and after listing. The situation is so bad that they have melted away the funds received in the IPO, having lost $48 million to September this year, leaving $16 million in cash funds compared to $81 million at the end of December last year. Borrowed funds increased by nearly $15 million, which helped to keep the cash on hand at the September level while payables have climbed by $29 million. There were no signs that things were looking better based on the September quarters numbers. To be fair, there was spending of $84 million on acquisition of fixed assets and an asset classified as the Bessa Investment.

The first director to pack up is Garfield Coke who tendered his resignation from the Board and from the Audit Committee as of November 20, 2012.

Filed Under: Company News, General Business News Tagged With: JSE Company

Access moved to Market Watch

December 21, 2013 by IC Insider.com

Friday, 20th December 2013 | IC Insider has moved Access Financial to the Market Watch list with a hold placed on the stock for the time being as the recent price movement has moved the stock close to full valuation based on estimated 2013 earnings. The Junior Market stock should be held as supply is very low and the price should move up further.

IC Insider projects $1.70 per share earnings for 2014, which means that there is still room for growth, but the potential for price appreciation lags the majority of stocks in the market currently and, therefore, it no longer deserves a Buy Rating accolade. Access Financial has gained 36 percent since being tagged as Buy Rated on the 15th of July. Access also paid a dividend of 31 cents per share on August 15, bringing the total gross gains to 40 percent.

Elsewhere, the list remains as it was although the prices of some of the selections have moved up in the last week. There are strong signs that the prices of many of the selections, particularly those in Jamaica, will move up prior to the year end. This week, the Jamaica stock market closed with 12 stocks having bids above their last selling prices.

Lasco Manufacturing remains on the list not because of 2014 earnings which are unlikely to be very price positive, but based on the implications for revenues and profit with the start-up of operations of the new and expanded factory. This should be positive for the 2015 fiscal year ending in March.