Elite Diagnostics IPO is now here

The initial public offer for Elite Diagnostics will open on January 22 at a price of $2 per share, with the issue scheduled to close on January 29, an advertisement in the Jamaica Observer indicates.
A total of 70.68 million shares are offered to raise $141 million. The shares are expected to be listed on the Junior Market of the Jamaica Stock Exchange, if the issue is successful and will bring the total company listings on the Junior Market to 35 and the total listings to 39 and the total listings on the entire exchange to 96.
The proceeds from the offer will be used for expansion. The company operates from Holburn Road in Kingston and now have a new office on Hope Road. The 5 year old company provides imaging and Diagnostic Medical Facility offers services such as MRI, CT Scan, X-Ray, Ultrasound and Fluoroscopy.
The offer which was expected in December last year, is one of nine the Jamaica Stock Exchange expects to list in 2018. Elite will be the second medical related company to seek to list on the Jamaica Stock Exchange Junior Market and the second within two months. One doctor when quizzed about the company informed IC Insider.com that the company is recommended highly from a professional viewpoint, due to the high level of professional skills the team posses.
IC Insider.com will provide a detailed review and recommendation when the prospectus is posted on the Jamaica Stock Exchange on Monday.

CAC 2000 profit rise but

CAC2000 the air condition engineering company, reported improved profits for the year to October 2017, after accounting for a provision of $104 million for court judgement claim in the 2016 results.
Profit excluding the amount of the claim fell slightly to $100.5 million in 2017 from $115 million in 2016. Revenues rose 19 percent to $1.2 billion. The situation would have been worse but for a $20 million swing around in bad debts which reduced cost in 2017 by $9.8 million compared to cost of a similar amount in 2016.. Operating cash flows before movements in working capital brought in $121 million up from $49 million in 2016.
Even as revenues climbed strongly, gross profit hardly moved rising to $424 million from $410 million in 2016 as direct cost rose faster than revenues with an increase of 29.5 percent to $786 million.
Directors’ remuneration climbed 25 percent to $41.2 million from $32.5 million, well ahead of the 5 percent increase in staff cost to $116.3 million for the year. Legal and professional fees jumped 47 percent, to $33 million.
Earnings per share ended the year at 78 cents, the stock traded at $7.50 on Friday, before the close of the market. Borrowings ended the fiscal year at $260 million up from $165 million at the end of the 2016 fiscal year, shareholders’ equity rose to $423 million from $322 million in 2016. Cash funds stands at $192 million even as trade receivables climbed $180 million to $536 million but inventories fell $80 million to $209 million.

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Profit surge 79% at Main Event

Main Event was the 4th best performing Junior Market stock for 2017.

A 15.6 percent decline in revenues in Main Event’s October quarter, pulled a 10 percent increase in the year to July, down to just 3.9 percent for fiscal year, but that was enough to spark a big jump in profit for the year.
The improvement in the topline, was sufficient to deliver a strong 79 percent increase in profit for the year, to reach $101 million after tax, up from $56.5 million, as the company made profit in the last half compared to a loss in 2016. For the final quarter, in spite of the reduction in revenues to $234 million versus $277 million in 2016, a small profit of $7 million was achieved versus a break even position in 2016.
Cash flow from operation provided $188 million up from $118 million in 2016, but the company purchased fixed assets of $137 million and reduced net liabilities having received proceeds from the issue of shares amounting to $103 million.
Importantly, direct cost fell by $94 million for the year compared to 2016, but administrative and depreciation cost rose by the same amount. With the rise in revenues, gross profit margin improved leading to a strong increase profit for the year. Some of the improved gross profit seemed to have been achieved by cost ending in administrative and depreciation expenses.
The company’s working capital has improved over 2016 with current assets at $292 million compared to current liabilities of $184 million, in 2016 it was $186 million to $212 million. Equity capital is up to $446 million from $242 million in 2016 while borrowings are down to $170 million versus $204 million, with cash funds of $91 million.
Earnings per share adjusted for tax is 38 cents and IC Insider.com projects 55 cents for 2018.
The stock traded at $5.80 on the Junior Market of the Jamaica Stock Exchange at the close on Thursday for a PE ratio of 11.
The nature of the business exposes it to possible swings in revenues some of it being weather related and others based on the timing of major entertainment events. The effect of such movements suggest that investors may be best rewarded based on a longer term investment posture to benefit from positive surprises in increased business.

Mayberry restructuring

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Mayberry to spin off 10 % of its subsidiary to shareholders.

Dogged by a share price that is bogged down mostly below $5, with a net asset value of $6.54, Mayberry’s directors are recommending distributing a portion of Mayberry West Indies Limited (MWIL), a wholly-owned subsidiary in the form of dividend to Mayberry Investments‘ shareholders.
MWIL is to list on the Jamaica Stock Exchange before the end of the first quarter of 2018 as a result of the move.
Arising from a Board meeting of the Company, on December 29, 2017, a dividend in specie equal to 10% of the Net Book value of its MWIL was declared. This dividend will be effected by the Company transferring, pro rata among its stockholders, shares in MWIL held by the Company and constituting 10% of MWIL’s issued share capital. The record date will be February 16, and shall be effected by transfer of the relevant MWIL shares on February 28 to stockholders. The Ex-dividend date will be February 15.
Based on MWIL’s book value as at November 30, 2017, the dividend in specie is equivalent to approximately $688 million, the Mayberry release said. Mayberry West Indies Limited name is to be changed to “Mayberry Jamaican Equities Limited”.
The Jamaica Stock Exchange requires a minimum of 20 percent of a listed company’s shares to be issued to the public, accordingly, it appears that the plans will be to raise around $700-800 million from the general market prior to listing.

Wisynco Group cut some prices

Wisynco operates at two main locations situated in St. Catherine: White Marl and Lakes Pen.

Recent Jamaica Stock Exchange listed Wisynco Group, announced a reduction in the prices for the majority of its imported portfolio of products, effective January 2. The reduction that the company said is 3 percent, is due to a revaluation of the Jamaican dollar to the US dollar in recent months.
The adjustment is in line with the appreciation in the value of the local currency versus the US dollar since it peaked at $131 in September.
The company who shares were issued to the public for sale in December further advised that it has commenced distribution of the Unilever Portfolio of Food products throughout the island. The portfolio includes: Red Rose Tea, Lipton Tea, Knorr, Ben & Jerry’s, Breyers Ice Cream, Hellman’s, Blue Band, Flora, Country Crock, I Can’t Believe It’s Not Butter and several other popular items.
The company’s shares traded on the main market of the stock exchange at $12 at the close on Wednesday and is up from the IPO price of $7.87.

NCB pre-announces dividend dates

NCB Financial Group has announced the dates when their board will consider dividend payments for 2018, in a break from the historical practice of making an announcement a few days before the board meets to consider the quarterly payment.
The practice is in keeping with what obtains in Trinidad with several listed companies pre-announcing dates for dividends, publication of quarterly reports and annual general meetings. The move enhances transparency in the capital market where all concerned are aware of important announcements. NCBFG advises that the board of directors intends to consider the payment of dividends to stockholders on the following dates this year, January 25, April 26, July 26 and November 8. The dates usually coincide with the release of the quarterly reports.

VM Investments lists on Friday

VM Investments list on Friday

Investors who applied for shares in the public pool in VM Investments recent public issue of shares will get the first 30,000 units and 4.32 percent of the balance.
Employees and Members reserved groups were allocated the full amounts applied for. The offer closed with subscriptions in excess of $2 Billion for the $689,261,487 offered”
A total of 225,003,750 Ordinary Shares in the Offer were reserved for staff and customers of the VMBS Group at discounts from $2.08 to $2.33 each and 75 million for the general public at $2.45 each.
The company’s shares will list on the main market of the Jamaica Stock Exchange on Friday.

NCB Capital Markets Manager, Origination and Structuring Stanley Thompson (left) exchanges laughs with Wisynco Group Limited Chairman William Mahfood during a signing ceremony commemorating a partnership with the local manufacturing and distribution giants. Sharing in the moment, too, are Wisynco Chief Executive Officer Andrew Mahfood and PriceWaterhouseCoopers Director Fiona Hyman

Wisynco started trading on the main market on Thursdays with very strong demand for the shares that were sold to the public at $7.87, by the close of trading attempts were made to trade 3.46 million units as high as $13.50 but most were cancelled as the price exceeded the 30 percent price movement limit of for the day. At the close 2,925,359 units were traded up to $10.09, the maximum price limit for the day.
Wisynco ended with 7,382 new shareholders, with those applying for shares from the General Public pool receiving the first 25,000 units in full and approximately 18.81 percent of the balance.

US$ holding just above J$125

Trading the Jamaica’s Forex market continued at a high level after opening from the Christmas holiday with inflows of US$75.53 million, versus US$76.84 million on Wednesday of all currencies with selling of US$82.73 million compared with US$62.63 million sold on Wednesday.
In US dollar, trading dealers sold US$73.32 million at an average of $125.09 at the close, compared US$56.68 million at an average rate of $125.12 on Wednesday. US currency purchases by dealers, amounted to US$65.24 million on Thursday, at an average rate of $124.06, compared to Wednesday, with US$69.43 million at $123.90.
On Thursday at midday,  dealers purchased US$26.33 million at an average rate of J$124.45 and sold US$24.36 million at an average of J$124.99. At mid-day on Wednesday dealers purchased US$21.98 million at an average rate of J$124.21, while they sold US$16.75 million at an average of J$125.11.
The selling rate for the Canadian dollar climbed to J$99.87 from J$98.40 at the close on Wednesday. The selling rate for the British Pound fell to J$164.20 versus J$166.53 previously and the euro dropped in value against the Jamaican dollar at J$146.75 to buy the European common currency, versus the prior selling rate of J$150.38.

Contrast of two ScotiaBanks

Scotia Group head quarters in Kingston.

The economies of Trinidad and Tobago and that of Jamaica have been performing in opposite directions in recent years. While Trinidad continues to be in deep recession, Jamaica has been recording mostly moderate growth.
In such environments, it would be expected that businesses would be doing better in the one that is growing and poorly in the other.
The performance of Bank of Nova Scotia’s subsidiaries in each of the countries, shows differing fortunes, with the Scotiabank Trinidad enjoying an increase in loans in its latest results to October and the Scotia Group in Jamaica remaining flat, year over year at $166.5 billion. Banks make the bulk of their profits from lending money. Lending not only generates interest on the amounts lent but fees associated with loans such as commitment fees and in a number of cases annual review fees.
For Scotia Group Jamaica, profit after tax rose just 7.7 percent for the year to October, resulting in $12.17 billion attributable to the Group’s shareholders. For the October quarter profit, rose to $3.36 billion from $3.1 billion in 2016.
Net interest income grew by $1.27 billion to $26.64 billion for 2017 versus $25.38 billion in 2016, but a sharp climb in bad loan provisioning of $746 million, reduced the impact of the rise in net interest income. Other income grew by $1.6 billion for the year to $15 billion.
Trinidad’s Scotiabank’s profit before Taxation increased by 11 percent and 5 percent after an increase in corporation tax rate in that country. Profit for the October quarter, dipped to $151 million due to increased taxation, from $158 million in 2016. Earnings per share ended the year at $3.73 for a PE ratio of 16.35.
Total Revenue, comprising Net Interest Income and Other Income amounted to $1.7 billion for the period ended October 2017, an increase of $117 million or 7 percent over the comparable period in 2016. Net Interest Income for the period ended October 2017 was $1.2 billion, $115 million or 10 percent higher than for 2016, driven mainly by growth in the retail loans and investment securities portfolios. Other Income for the same period was $481 million, $2 million higher than the prior year mainly driven by revenues earned from the credit cards portfolio.
Loan Loss Expense for the period ending October 2017 was $106 million, an increase of $29 million over the prior year for the Trinidadian bank. Loans advanced to Customers, closed the period at $13.9 billion, an increase of $681 million or 5 percent compared to 2016. Retail loans grew by $645 million or 6 percent over 2016.
Total Non-Interest Expenses 2017 was $686 million, down from $691 million in 2016 for Trinidad.
The big question, what resulted in the Trinidadian company enjoying growth in loans in a declining economy while Scotia Group operating in an economy that is growing could only hold the loan portfolio steady, for the most profitable area of operation?

D&G new production line to push exports

Desnoes and Geddes producers of the world renown Red Stripe beer, is set to expand its export capabilities with the introduction of a new production line with the capacity to produce 40,000 bottles per hour and 26,000 cases of beer per day exclusively for its growing global markets, release from the company disclosed.
The new line will result in the brewery producing up to 1 million bottles of the Jamaican beer for the domestic and international markets. “Our 2020 Vision is a call to action to boost our target volume and we’ve invested close to US$18 million in this project. We firmly believe in the power of our brand and its appeal, so we are making a stronger push into international markets,” said Ricardo Nuncio, Managing Director, Desnoes and Geddes.
The company’s top export markets are the United States and Canada with two million and 700,000 cases in annual shipments, respectively the company stated. As at July 2017, there has been 15 percent growth in focus cities of Miami, Tampa, Orlando and Atlanta. Nuncio adds, “In early 2016, Red Stripe entered Australia, Dubai and Brazil and there’s robust brand building in those countries. We’re also moving to put down roots in Africa and Russia, following successful testing.”
The brewery’s new production line, referred to as ‘Line 8’, comes as the company adopted the use of liquefied natural gas (LNG) to power its operations. The brewer is now the first commercial company in Jamaica to be fully LNG-powered. Nuncio explained that the addition of Line 8 dovetails with the company’s mission to streamline its operation throughout the supply chain. Nuncio noted, “The Red Stripe team is guided by the growing importance of sustainability and the need to lessen the adverse environmental impact of our operation. By using LNG, we welcome estimated savings of US$336,000 annually.”
Line 8 now frees up the existing production line to focus solely on domestic volumes. The new line is specially designed for one-way or new Red Stripe bottles, but it is also able to produce new Red Stripe Local and Dragon Stout in six-pack cartons. The project, which took 12 months to complete, involved infrastructure changes and extensive training for employees to achieve a greater level of efficiency.