ISP Finance is an unsecure loan company that is seeking to list on the junior market of the Jamaica stock Exchange with the raising just over $97 million from directors staff and the general public.
The company is now offering 48,982,500 ordinary shares to the public of which 45,900,000 are reserved for directors and employees, at $2 per share. Only a small amount, 3 million units will be available for the general public unless the reserved shares are not fully taken up. Opening Date of the offer is March 21, 2016.
ISP started operating in 2007 and has a number of years of profitability but is yet to wipe out accumulated losses. Currently there are 56 million shares issued to the Chief executive Dennis Smith and his wife. In 2015 the company reported audited profit of $30.7 million before tax but benefited from a refund of captive insurance premium of $12.3 million, excluding this, the company made profit of just $6 million. Additionally, salaries cost fell to $62.5 million from $77.6 million. While 2014 showed a loss of $4.5 million before tax after booking insurance premium of $41.7 million, excluding this amount would result in profit of just over $36 million or earnings per share of 65 cents. The earnings based on 2015 results, adjusted for the one off income, would be 10.7 cents and 65 cents for 2014. The PE based on pretax profit would be 18.7 times 2015 earnings and just 3 times 2014 numbers.
In the first four years of operation the Company’s customers were primarily employees from the security services sector. The Company has since expanded its customer base to other private and public sector workers as well as to micro and small entrepreneurs in the manufacturing, services and distribution sectors.
ISP Finance intends to strategically expand its reach geographically to other areas where there is a concentration of employed individuals and business development, including Montego Bay, Ocho Rios, Mandeville, Spanish Town, Portmore and May Pen.
The Company utilizes cash generated by the business and loans from a variety of sources to fund loans to customers. Indebtedness to banks, financial institutions and other lenders amounts to $218 million as of February 11, 2016.
Since commencing business in February 2007, the Company’s Loan portfolio has grown from approximately $2.5 million to $304 million in 2015 before provision for loan losses. Loan loss provision stood at $62 million at the end of 2015 compared with $44.5 million at the end of 2014. Loan loss expense for 2015 amounted to $18.6 or 7.75 percent of net loans and is favorable compared with Access Financial at 8.9 percent. Interest rates on loans ranges from 50 to 65 percent.
Clifton Cameron is an Independent, Non-executive Director and Chairman of the Board. He was a major owner of Manufacturers Merchant Bank that was acquired by Sagicor Bank.
The results for 2015 looks disappointing with just a small profit but results for 2014 when adjusted for the high level of insurance cost looks very promising. The company is involved in high risk business with loan provisioning amounting to 20 percent of overall loan portfolio an increase from 15.7 percent at the end of 2014. Expansion if not managed well can be costly but they will face strong competition in the market with much bigger companies than themselves.
At the end of 2015 equity capital was negative $7 million with accumulated deficit of $12 million, down from a deficit of $39 million at the end of 2014.
ISP is not the last company slated fro the junior market as IC Insider gathers that Key Insurance Company is also set to offer shares to the public to try and make the junior listing before the end of March.
ISP Finance – next junior listing
5 TTSE stocks closed at lows – Friday
Massy trades at a new low
Trading ended with 1,626,064 shares valued at $5,597,508 changing hands. A total of 18 securities traded with 7 security falling, 4 gaining while 7 remained unchanged. A total of 5 stocks closed at a 52 weeks’ low.
The market closed with the Composite Index falling 2.61 points to close at 1,160.51, the All T&T Index dropping 4.87 points to close at 1,866.68 and the Cross Listed Index declined by 0.05 points to close at 60.29.
IC bid-offer Indicator| The Investor’s Choice bid-offer indicator has turned negative with 4 stocks with bids higher than the last selling price and 6 with offers that were lower. More telling is the fact that a third of the listings have no bids to buy.
Gains| JMMB Group traded 15,406 shares to close with a gain of 2 cents at 60 cents. National Flour closed with 19,525 shares changing hands with a gain of 10 cents at $1.95, Sagicor Financial Corporation closed with 84,981 shares changing hands with a value of $594,867 at $7 after rising 1 cent and Trinidad and Tobago NGL jumped 75 cents in trading 55,321 shares valued at $1,050,007 to close at $19.
Losses| Ansa McAl contributed 84 shares in closing with a loss of 7 cents to end at a 52 weeks’ low of $63.68, Massy Holdings ended with 39 shares changing hands as the price dropped 5 cents to end at a 52 weeks’ low of $57.79. Mora Ven Holdings traded for the first time had just 1 units changing hands but shed $1.09 to close at a new low of $17.70, National Enterprises closed with 10,080 shares changing hands at $12.50 after declining 50 cents, to close at a 52 weeks’ low. READYMIX traded just 1 share but dropped $1.09 to close at a new low of $17.70, after it failed to trade for several months, having exhibited weak demand, Scotiabank closed with 15 shares changing hands to end at $59.72 after slipping 2 cents and Scotia Investments closed with a loss of 20 cents at $1.80 while trading 112,064 shares.
Firm Trades| Berger Paint ended with 900 shares changing hands to close at $3.68, Clico Investments traded 16,150 shares to close at $22.55, Firstcaribbean International Bank closed with 4,042 units changing hands at $6.50. Grace Kennedy close with 500 units changing hands to close at $5.13, Guardian Media traded 100 shares to close at $19.75, National Commercial Bank had 1,280,044 shares valued at $ $3,072,106 changing hands to close at $2.40 and Trinidad Cement closed with a loss of 1 cent at $3.70 with 26,812 shares changing hands.
Scotia Group profit jumps 33%
Scotia Group profit jumps
Net interest income for the period was $6.23 billion, up from $6.08 billion generated in similar quarter in 2015. This was primarily due to a fall in interest expenses of $239 million. The Group saw a slight dip in interest income of $89 million even as loans grew 6.9 percent to $156.35 billion while investments rose by 28.5 percent to $112 billion. Customer deposits grew 10.7 percent to $219 billion. The group enjoyed better loan losses experience with a reduction of $87 million to $257 million, a 25 percent reduction compared with the prior year outturn, aided by what management stated as “enhanced adjudication, monitoring and recovery efforts.”
Other revenue for the quarter amounted to $2.8 billion, a decrease of $95 million compared to the quarter ended January, 2015. The reduction was due “to net losses on financial assets resulting from marked-to-market movements on securities, lower foreign currency gains, offset by the growth in net fee and commission income from increased transaction volumes on our credit card and merchant service business segments. Other revenue was $1.1 billion below the previous quarter, due primarily to the one-time actuarial release of $1 billion booked in the October quarter of 2015, resulting from the changes to the income tax regime for insurance companies in 2015” the banking group’s management stated in their report accompanying the financials.
Operating Expenses for the three months amounted to $5.6 billion, a decrease of $733 billion or 11.61 percent compared to prior year. Asset tax fell by $339 million as the rate for regulated insurance companies moved from 100bps to 25bps; correspondingly, the corporate income tax rate for these entities was increased from 15 percent to 25 percent. Salary related and other operating expenses were down $394 million, flowing from the benefits of efficiency initiatives including closure of some branches implemented in 2015.
Earnings per share for the quarter, came in at 62 cents compared with 47 cents in 2015 and seem poised to hit the $4 mark for the fiscal year ending in October. The stock traded at $32 on the Jamaica Stock Exchange on Friday.
Flat trading for juniors – Tuesday
General Accident closed at a new 52 weeks’ high on Tuesday
The junior market eked out a meagre gain on Tuesday although declining stocks exceeded advancing ones by a wide margin. The market gained a mere 0.08 points to end at 1,947.99 with 13 securities trading of which 8 declined and 4 advanced, including 1 of that traded at a 52 weeks’ high. The market ended with 534,537 units changing hands, valued at $3,813,759.
At the close, 2 securities ended with no bid and 6 securities had no stocks being offered for sale. There were 7 stocks closing with bids that were higher than their last selling prices and 2 ended with lower offers.
In trading, Access Financial declined by $1 in trading 2,550 units to close at $16.50, Blue Power rose by $1.70 with 188,655 units changing hands, to end at $11, after it posted profits of $25 million in the January quarter, $13 million more than the comparative period last year. Caribbean Cream lost 52 cents while trading 1,000 shares to close at $3.73. Caribbean Producers had 9,352 units changing hands to close a gain of 5 cents at $4.60, Consolidated Bakeries traded 16,000 units to close with a loss of 10 cents at $1.40, General Accident traded 5,000 units at a 52 weeks’ high of $3 with a gain of 20 cents.
Honey Bun traded 27,600 shares to gain 20 cents and close at $14, Jamaican Teas lost 10 cents and ended with 2,484 units changing hands at $7.60, KLE Group closed at $1.90 with 32,420 shares changing hands with a loss of 30 cents. Lasco Distributors closed with 108,550 units trading, to end at $5.50, Lasco Financial ended at $3.10 with 22,622 shares changing hands, after falling by 13 cents, Lasco Manufacturing ended trading with 118,104 shares and lost 10 cents to close at $4 and tTech traded 200 shares to close with a loss of 18 cents at $4.67.
Witco records $515.5m profit
Witco profit rose 5.4% in 2015
The company is recommending the approval of a final dividend of $2.18 per share at the Annual Meeting in April and said that when added to the interim dividends of $3.70, will result in a total dividend of $5.88 per share for 2015. If approved, the final dividend will be paid on 6 May 2016. Dividends paid based on the 2014 profit were $5.51.
The lack of meaningful growth in revenues and profit will mean a price increase is not far away but the recession in Trinidad and Tobago could see a delay in any price increase.
The stock traded at $126.30 on Friday giving it a PE of 20.6, with earnings per share for 2015 being $6.12.
Carreras dividend yielded 20% in 2015
Carreras will be paying an interim dividend of $1.80 per share to shareholders on March 17 and brings the total dividend in the last twelve months to $8.94 for a yield of 20.2 percent based on the stock price of $44.10 at the beginning of March 2015.
In 2015, the company paid an ordinary dividend of $1.40 per share in December, a special capital cash distribution of $1.94 per on December 17, one dollar and twenty cents ($1.20) per share in September 3, two dollars ($2.00) per share unit in June a special capital cash distribution of sixty cents ($0.60) per share in September. March 12, last year an interim dividend of one dollar and sixty ($1.60) per share was paid.
The stock is now trading at $66.50 on the Jamaica Stock Exchange. Dividends to come are not likely to be as high as in 2015. The special dividends that were paid, should be at an end, leaving only ordinary dividends to be paid, as such the yield is likely to fall to just over 10 percent based on the current price.
Carreras profit up but report wrong
Carreras recorded moderate growth of 6 percent in the December quarter last year with profit after tax of $851 million from $800 million in the similar period in 2014, but the report issued by the company on the Stock Exchange has the September 2014 quarterly as the comparative December figures.
For the nine months to December, profits rose 16 percent to $2.27 billion from $1.97 billion.
Revenues grew for the nine months by 8 percent to $9.3 billion, up from $8.67 billion, while revenues grew 7 percent for the quarter from $3.3 billion to $3.55 billion.
Apart from the improvement in revenues which helped to improve profits, administrative cost were lower in the quarter, falling to $332 million from $512 million and for the nine months to $1 billion from $1.08 billion while Distribution and marketing cost rose moderately in the nine months to $512 million but the quarterly figure jumped from only $76 million to $245 million in 2015.
Cash funds stood at $3 billion but $1.1 billion is due to be paid for corporation taxes but shareholders’ capital $1.98 billion which is down from $3.1 billion at March 2015.
Earnings per share came in at $4.68 for the nine months and $1.86 for the quarter with full year’s earnings heading for $6.70 per share net asset value turns out at $4.05. The stock last traded at $66 on the Jamaica Stock Exchange on Friday for a PE of 10.
The company will be paying an interim dividend of $1.80 per share to shareholders on March 17 and brings the total dividend in the last twelve months to $8.94.
Major recovery at General Accident
General Accident
In the December quarter, the company reported a huge increase in its net profit of 189 percent to $185.9 million, an increase of $64.4 million.
Gross written premiums grew by 21 percent to $6.1 billion in 2015, from $5 billion in 2014 for the full year and for the last quarter, $664 million versus $555 million in 2014. Net premiums ended at $1.19 billion for the year compared with $1.07 billion in 2014 and for the December quarter, $288 million versus $258 million. Commission and other Income fell to $410 million from $424 million in 2014 and is up in the December quarter, to $137 million from $115 million. Investments income grew marginally to $178 million, from $160 million for the year and to $51.6 million from $43 million in the 2014 quarter.
In 2015, the Company’s claims expense, increased marginally by 3 percent to $699 million versus $679 million in 2014 and for the December 2015 quarter it fell to $108 million from $162 million in the 2014 quarter. Notwithstanding higher claims, underwriting profit grew to $107 million compared to $101 million in 2014 and $129 million in the December quarter versus a mere $12 million in 2014.
Commission expenses grew to $224 million for the year from $183 million and to $88 million for the quarter from $90 million. Management Expenses amounted to $451 million for the year while in 2014 it was $442 million, for the quarter $125 million was incurred and in the 2014 quarter $117 million.
Total shareholders’ equity stood at $1.77 billion up from $1.57 billion in 2014. The return on average equity based on the reported profit is 18 percent but including unrealised investments gains its 22 percent.
The stock traded on the junior market at $2.12 on Thursday at a PE ratio of 7.9 which is one of the lowest within the sector and therefore has room to record gains.
JSE retreated again on Wednesday
Carreras traded at a new 52 week’s high on Wednesday
A total of 2,801,152 units valued at $45,600,266 changed hands in all markets. The junior market accounted for 876,572 units changing hands, valued at $3,718,863.
The JSE Market Index dived 934.62 points to 158,236.44 the all Jamaica Composite Index dropped 1,044.48 points to end at 175,794.45 and the JSE combined index dipped by 1,117.25 points to close at 169,553.18.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator reading was 15 stocks with bids higher than their last selling prices and 5 with lower offers.
At the end of the market activities, Berger Paints fell 30 cents to end at $4.50, with 37,301 units traded, Cable and Wireless close with 178,301 units changing hands at $1.60, Caribbean Cement jumped $3.40 to close at $30 with 83,508 shares changing hands. Carreras gained of 70 cents to close at $65.70, to end at a 52 weeks’ high while trading 245,117 units, Desnoes & Geddes traded 76,000 shares but lost 2 cents to $22.85, Grace Kennedy ended with 3,269 share trading to close at $83, Jamaica Broilers had 72,174 shares trading with a rise of 50 cents to end at $14. Jamaica Stock Exchange ended with 3,000 shares trading but lost 50 cents to close at $22, JMMB Group dropped 75 cents in trading 94,905 units at $11.25, Kingston Wharves had 38,100 shares trading at $11.40, 
Mayberry Investments traded 26,020 units to close at $4.50. National Commercial Bank traded 183,199 shares to close at $40 after rising by $1.50, while 138 Students Living traded 354,615 shares with a rise of 20 cent to end at $5.70, Pan Jamaican Investment traded only 334 units with a rise of $1.45 to end at $96. Scotia Group had 173,359 shares changing hands to close with a fall of $1.99 to end at $32.01, Scotia Investments had 6,000 units changing hands at $30 after jumping $3.45. Seprod closed at $22, with 33,153 shares trading, Supreme Ventures rose 10 cents to close at $6 with 138,588 units changing hands and Jamaica Money Market Brokers 7.50% preference share traded 66,900 at $2.15.
Tissue paper to push AMG sales
Sales at AMG Packaging fell in the November quarter but profit jumped sharply as raw material input cost declined, pushing gross profit from $34.3 million in 2014 to $51.5 million while net profit rose to $28.8 million for the quarter, up a strong 87 percent over the $15.5 million 2014.
Sales fell slightly from $151.5 million to $149.3 million but with the new paper tissue plant likely to be fully on stream in March, sales could start to rise quickly again.
Administrative and other costs were held in check very well, with some falling below the amounts incurred in 2014 while the company incurred $5.9 million in cost relating to the new paper tissue plant operation.
The company indicates that change in product mix helped in the reduction of sales and seems to have pushed up profit margins. “Changes in product mix played a major role in reducing volumes. During the year, we were able to negotiate discounted prices for cash payments of raw materials” Managing director Michael Chin informed IC Insider. Going forward “we are still targeting the import market, as well as increasing our clients’ product base” Chin further stated.
The new paper tissue operation seems poised to deliver further growth with indication that profit margins could be as much as 100 percent. Information obtained by IC Insider suggests that at this early stage, the toilet tissue is well received by the market, with the prices being very competitive. The company management stated that the output will be sold through by third party distributor.
Earnings per share ended at 28 cents u from 15 cents in 2014. IC Insider expects earnings for the full year to be around $2 per share with profit coming from the new operations. The performance of profit for the quarter and expected new business encouraged investor to push the stock price to a high of $21.50 with a nearly a 200 percent gain for the year.
The company closed the quarter with cash flows from operating activities amounted to $32 million for the year versus $19 million in 2014 and ended with cash funds of $87 million, up from $33 million in 2014. The company has equity of $406 million and borrowings of $146 million.