National Commercial Bank (NCB) enjoyed a 12 percent increase in profits for the quarter to December last year, of $2.4 billion up from $2.1 billion in 2014 for earnings per share of 97 cents.
Profit before taxation came in at $3 billion compared with $2.9 billion in 2014. The improved numbers came from growth in revenues net of interest cost, fee and commission expenses of $12.68 billion, up from $11.96 billion in 2014. Net interest income rose $530 million and insurance premium increased $5000 million but foreign exchange trading contributed $300 million less than in 2014.
Provision for credit losses declined to $424 million from $587 million while asset tax swelled other operating expenses by an estimated $700 million based on 2014 figures, to $3.87 billion for the quarter compared with the September 2015 quarter of $3 billion.
NCB’s assets grew from $500 billion at the end of 2014 to $538 billion with loans accounting for $172 billion, an increase of 9 percent from $157 billion in 2014.
In December 2015, NCB entered into an agreement to purchase a 29.99 percent stake in Trinidad’s Guardian Holdings.
The banking group seems on target to record profit around $5.80 per share for the full year on existing business operations.The stock last traded on the Jamaica Stock Exchange at $40 for a PE of 6.9 times earnings based on the profit estimate and with some room for increased value.
Based on the results the dividend was raised from 45 cents per share paid last year to 50 cents per share to be paid on February 26 with the record date of February 15.
NCB increases profit & dividend
Pulse pushes back capital increase
Pulse’s directors put before the annual general meeting held on Tuesday at the company’s Villa Ronai complex a resolution to increase the capital of the company but agreed to withdraw it after a number of shareholders suggested that it should be postponed.
The resolution was incorporated into the agenda after the annual reports were printed and was asking shareholders to vote to increase the authorised capital from 336,835,181 shares to 450 million shares without par value. Shareholders argued that the request was being presented without any explanation for the increase. In addition, based on the points put forth by the directors that the expectation is to raise funds to help finance the property expansion with the building of townhouses, shareholders were of the view that thye needed to be presented with a plan for the development and its funding. Such plans shareholders felt should include some debt financing that could include preference shares or bonds issued to the public.
Pulse released interim results to December showing profits of $131.9 million for the six months up by 33 percent from the $99 million reported in 2014. For the December quarter profit amounted to 51.6 million or 26 percent higher than the $41 million in 2014.
Operating revenues rose 25 percent to $65 million from $63 million for the quarter and percent for the half year to $151 million from $132 million in 2014.
The net profit results include fair value appreciation on investment property of $25.4 million for the latest quarter versus $20.7 million in 2014 and $51.8 million for the six months to December 2015 and $42.3 million in 2014.
Earnings per share for the quarter came in at 19 cents and 49 cents for the six months and should reach $1 per share for the full year.
80% of Dolphin Cove overseas
World of Dolphins increased their holding in Dolphin Cove to 79.99 percent following the closing of compulsory offer to purchase shares from the minority shareholders, the company reported in a release to the stock exchange.
The Offer was accepted by 110 shareholders of Dolphin Cove who tendered 48,815,711 ordinary shares representing approximately 12.44 percent of all the shares issued by Dolphin Cove. Stafford Burrowes former majority owner sold a further 35,475,929 shares to World of Dolphins at the offer price of US$0.1338 per share.
On November 18, 2015, World of Dolphins Inc. acquired 58.51 percent amounting to 229,610,218 shares in Dolphin Cove’s issued shares. The majority of these shares were purchased from Stafford Burrowes, the founder and principal shareholder of Dolphin Cove. On December 18, 2015, World of Dolphins Inc. made the follow-up offer (“the Offer”) to purchase all shares in Dolphin Cove not already held by World of Dolphins at a price of US$0.1338 per share.
Margaritaville Turks profit up 86%
The Turks and Caicos based Margaritaville Turks, a Jamaica Stock Exchange US dollar market listed company, reported a big 86 percent jump in profits of US$518,134 in the six months to November last year versus $278,508 in the prior year.
The improved profit came from revenues that climbed 11 percent to $3.376 million. For the quarter ending November, the company reported improved results with net profit of $247,253, a whopping increase of 728 percent over the profit of $33,611 for the same quarter in 2014. Sales revenue for the quarter rose a very strong 24.7 percent to $1.65 million, compared to $1.32 million in 2014. Gross profit grew by 25 percent, slightly faster than sales revenue and for the six months by 10.7 percent.
Administrative expenses rose by 5.3 percent to hit $1.68 million for the six months and for the quarter to November to $829,364 for an increase of 8.7 percent. Management fees fell from $212,614 in 204 for the six months to $125,000 and for the quarter from $92,628 to $62,500. Depreciation charge was essentially flat at $123,748 for the six months and $62,444 for the quarter.
The company generated earnings per share of 0.77 US cents to November and 0.37 US cents for the quarter. IC Insider expects earnings for the full year to May to be around 2 US cents per share. This puts the PE of the stock at a low 5 times current year’s earnings.
Cash flows from operating activities amounted to $642,173 for six months versus $399,202 in 2014 before increase in related party receivables of $1.24 million and $685,495 in 2014 and ended with cash of $24,977. The equity capital stood at of $4.3 million and the company had no borrowed funds.
Massy’s profit jumps 32% in Q4
The Trinidad based conglomerate Massy Holdings reported improved 2015 results with net profit of $252 million attributable to shareholders for the quarter ending September, up a strong 32 percent over 2014.
For the year, profit rose by a much slower 15 percent to $638 million. Pretax profits grew at a slower pace of 21.5 percent for the September quarter and 10.4 percent for the full year.
The group had a poor June quarter with 24 percent lower profits of $175 million than in 2014, before cost of rebranding the group. The group operates in 6 segments but only the automotive and industrial segment showed any meaningful increase in profit, moving from $230 million in 2014 to $285 million, the others were virtually flat, with insurance and other investments suffering declines.
For the full year ongoing profit grew much less than the above stated rate as 2014 incurred $58 million in rebranding cost with virtually none in 2015. Massy generated earnings per share of $2.58 for the September quarter and $6.53 for year, up from $5.69 in 2014. IC Insider expects earnings for the full year to be around $7.50 per share. Falling oil prices on the world market could complicate the outlook for Massy as the Trinidad economy now in recession, could get worse as government put in place measures that will trim demand. The company’s other regional businesses with revenues of just under 50 percent could offset some of any possible decline in Trinidad.
Sales revenue for the quarter rose 8.3 percent to $2.98 billion, compared to $2.75 billion in 2014 and by 11.6 percent for the year to $11.94 billion.
Cash flows from operating activities amounted to $1.14 billion for the year versus $1.04 billion in 2014. The group has assets of $10.4 billion and equity of $4.4 billion and borrowings of $2.17 billion.
Massy Holdings plans expansion into new areas of methanol and DME plants being constructed. Methanol is used as a raw material in the making of traditional petrochemicals, including formaldehyde and acetic acid. DME (Dimethyl Ether) is a form of liquefied gas that can be made from natural gas or from other raw materials such as coal or biomass.
NIR climbs US$94m in December
Jamaica enjoyed a week of strong net inflows on the FX front
The inflows brought the net inflows to US$93.9 million for the month, moving the reserves to $2.437 billion from $2.34 at the end of November.
Reserves now amount to 33.37 in Weeks of Goods Imports, up from 31.80 weeks and 22.98 weeks in reserves of Goods & Services Imports up from 21.90 weeks from the November amounts a release from Bank of Jamaica disclosed.
Bank of Jamaica confirmed that for the December 2015 quarter the net purchase by them amounted to US$137.48 million. The intake by the bank helped to build up the reserves.
Chin confirms US$300m vs Pfizer
Lasco Distributors products
The amount mention in the article, US$300 million equates to nearly 18 years of 2011 Pharmaceutical sales, an amount confirmed by the company’s chairman Lascelles Chin. Damages would not compensate for loss of sales but loss of profit up to the point that the company could restore its market share. IC Insider tried to put the pieces together.
An extract from the Gleaner reports states “Lasco Distributors Limited has claimed that it suffered US$300 million in damages when it was barred by a court order from distributing the drug Amlodipine (Norvase) which is used to treat high blood pressure. Last month LASCO put in its claim in the Supreme Court to recover the money from international pharmaceutical company Pfizer, which had obtained an injunction against LASCO. The injunction, which was granted in 2005, remained in effect until 2012 when the United Kingdom Privy Council upheld rulings by the local courts which favoured LASCO”.
In 2010, when Lasco went public the prospectus stated in connection with the case; “no provisions have been made in the Company’s accounts for the impact of the outcome of this decision and the accounts contained in this prospectus do not take it into account. It is the expectation of the Company, based on legal advice it has received, that its lost sales of the product to date (estimated to be $400 million) are likely to be recovered in the event that it succeeds in this matter but it is difficult to quantify the amount of damages that could potentially be awarded as they will continue to accrue until the matter is decided”
The 2012 audited report, said pretty much the same. “There is a claim by Pfizer Limited (Pfizer) against Lasco Distributors Limited, (“the company”), and others for damages for breach of a patent relating to a particular product. The action has been tried and judgement entered in favour of the company. The judgement has been appealed by Pfizer. The appeal has been heard and the court has reserved its judgement. The attorneys are of the opinion, that the company should be successful on this appeal and anticipate that the amount to be recovered by the company may be approximately $400M, if not, the company will be liable for cost estimated at $25M and for an accounting as to profits made by the company as damages to Pfizer for its loss of profit attributable to the sale of the product from the commencement of the company’s dealing in it to the date of the interim injunction issued on 29 March 2005”.
The big question, how did sales of $400 million plus cost and damages get to US$300 million in 5 short years? If the sales lost, as stated in the prospectus was $400 million up to late 2010, then it would appear that to be generous, sales to the end of 2012, around two additional years, should not exceed another $400 million bringing the total to probably $800 million. Lasco Distributors’ gross profit is around 20 percent and would translate to $160 million over the period plus interest. Applying interest at 15 percent per annum, translates to around J$300 million plus cost. Based on the estimates that cost that would be payable to Pfizer amounting to $25 million, the Lasco’s cost should be in that region or a bit more based on the drawn out nature of the case.
Of course there could be damages for the loss of market share as it would take some time to get back to the level of business that they would have been at had they not ceased selling the product.
Chin advised IC Insider that the amount now claimed is compiled in a comprehensive and detailed manner and takes into account the fast pace that sales were growing by amounting to 500 percent per annum as well as the size of the market but does not have interest computed as yet. Chin also indicated that the profit margin of the tablets was 70 percent and that it will not be until 2018 that they would get back to the level of sales that would have had they not been barred from selling.
The amount plus interest would work out at around 10 US cents per share before taxation of around 12.5 percent.
Shareholder pumps millions into KLE
KLE closed at a 52 weeks’ high in closing at $1.83 on Tuesday.
KLE Group operators of the Famous nightclub and Usain Bolt Tracks & Records received US$650,000 loan from its largest shareholder Joe Bogdanovich this financial year, IC Insider understands as the music promoter deepens his interest in the struggling junior market entertainment company.
KLE was listed in late 2012 after raising $90 million in an initial public offering.
Bogdanovich acquired 23 per cent of KLE Group at market value between $0.90 and $1 on the Jamaica Stock Exchange in 2014 when two directors exited the company. The loan listed on the books as other loan at J$73.59 million, represents more than four-fifths of its total loans payable at $87.6 million.
The loan propped up the cash position at the company to record cashflow and equivalents at $30 million in December 2014 but it now returned to a cashflow deficit of $6.9 million at September 2025. The loan was in part utilised to pay down debt, particularly trade payables but left very costly statutory debts at higher levels than before at $21 million, as well as credit card debt at $11 million, with the latter increasing from $2.5 million in 2014.
The company, however, continues to operate with huge negative working capital and negative equity capital of $8 million with accumulated deficit at $130 million.
On the positive side, the company made a rare profit of $2.6 million or 2.8 cents per share from flat revenues of $48.3 million, for the three months ending September 2015 which reversed the $8 million loss for the corresponding quarter a year earlier. Over the nine months, it however, recorded a $32 million loss. The quarterly profit came as the company cut administrative and interest cost sharply by $20 million, partially by limiting the number of days its operates the Portmore based Famous Nightclub. If the bottom-line trend were to continue, the struggling group could end up with profit of $12 million in a full year, and although small, would represent a major turnaround for a company that has been bleeding badly for the past 3.5 years, with losses amounting $139 million during that period.
The group continued its restructuring exercise from 2014 with base operating costs reduced to reflect the leaner organization. Further changes will be made to ensure total alignment with the company’s portfolio and its strategic direction. The Famous operating model was changed in August from a weekly 3 night per week club to a promoter model which saw the location being marketed to promoters as a venue. This has allowed for significant reduction in operating costs with a major shift from fixed to variable expenses,” stated management in the financials adding that it continues plans to franchise its Tracks & Records restaurants globally.
Since the release of the results were released on the December 2, last year, the stock has climbed from 73 cents to trade at $1.87 after bottoming at 43 cents in October.
JSE to host investment conference
The Jamaica Stock Exchange INVESTMENTS & CAPITAL MARKETS CONFERENCE 2016, will be held at the Jamaica Pegasus Hotel on Monday, January 18, to Wednesday, January 20 and comes against the background of the exchange being rated as the best performing global exchange in 2015, with gains over 100 percent for the year.
The conference with its theme “Positioning the Caribbean in the International Arena” will cover the following topics:the UK an Invaluable Trading Partner: Going Beyond Traditional Exports and Identifying Higher Value Products and Services. Building and Deepening the Caribbean, Cuban Relationship in the Areas of Education, Health and Tourism. Investing in and Training the Labour Force is the Conduit for Growth in the Caribbean. Start, Run and Grow Your Business. Confronting the Challenges of Climate Change: Protecting the Caribbean Water Resources as an Economic Strategic Advantage. The Caribbean as an Ideal Sports Destination. New Approaches to Funding Ideas Regionally – Crowd Funding the Newest Rage. Venture Capital Pitch Room for Entrepreneurs and Innovators.
Negative trend continues on TTSE
Activity on the Trinidad and Tobago Stock Exchange jumped with trading in 16 securities on Tuesday but two of the three market indices declined marginally with the two main indices as 6 stocks advanced and 5 declining, with the prices of 5 remaining unchanged. Three stocks traded at 52 weeks’ highs and one at a low as a total of 230,344 shares changed hands valued at $2,036,638.
The Composite Index ended with a fall of 0.14 points to 1,160.26, the All T&T Index fell 0.25 points to 1,943.74 and the Cross Listed Index remained at 49.61.
IC bid-offer Indicator| The Investor’s Choice bid-offer indicator had 3 stocks with bids higher than the last selling price and 3 stocks with offers that were lower.
Gains| FirstCaribbean International Bank gained 1 cent in trading 100 shares to close at $5.02, Guardian Holdings ended with 7,950 shares trading at $13.28, for a 3 cents gain, Prestige Holdings ended with 1,000 shares trading with a gain of 7 cents to close at $10.17, for a 52 weeks’ High. Republic Financial Holdings gained 2 cents to close at $111.95 with 5,111 shares changing hands at a value of $572,176, Sagicor Financial Corporation rose 1 cent in trading 597 shares and closed at $6.26 and West Indian Tobacco had 2,744 shares valued at $346,559 trading, with a rise of 1 cent to $126.30 for a new 52 weeks’ high.
Declines| Angostura Holdings closed with 11,500 shares changing hands with a 2 cents loss to end at $13.93, Grace Kennedy closed with a loss of 1 cent at $4.03 with 21,795 shares changing hands.
JMMB Group traded 155,244 shares but lost 1 cent in closing at 54 cents, Massy Holdings ended with 322 shares changing hands as the price dropped 5 cents to end at a 52 weeks’ low of $61.40 and Scotiabank lost 4 cents in trading 300 shares at $61.90.
Firm Trades| Agostini’s traded 1,005 shares at $17, Clico Investment Fund traded 3,100 shares at $22.75, First Citizens ended with 14,570 units with a value of $509,951 changing hands at $35, National Commercial Bank closed at $2.11 while trading 4,000 shares and Trinidad and Tobago NGL ended at $21.50 with 986 shares changing hands.