Garfield Sinclair

Revenue growth pushes down C&W loss

November 15, 2015 by IC Insider.com

Cable & Wireless HQ

Subscribers and revenues are up in double-digits at Cable & Wireless Jamaica which contributed to reduced operating loss of $346 million, or 58 percent better than the outcome in the similar quarter in 2014 before exceptional expenses of $139 million.
The company posted losses of $485 million after exceptional expenses in the September quarter, or 11 percent less than the $548 million loss for the six months in 2014.
EBITDA earnings grew to $1.2 billion compared to $971 million a year ago and for the half year $2.58 billion versus $1.78 billion, an increase of 45 percent.
“Each line of business showed improved results leading to growth in total revenues and EBITDA. Our mobile business was again the leading performer with our pre-paid subscriber base growing by 23 percent and our post-paid subscriber base growing by 6 percent when compared to the prior year first half,” stated Garfield Sinclair who heads C&WJ, in the financial report.
During the quarter, revenues grew 9 percent to $5.63 billion. This growth was filliped by mobile subscriber base and revenues up 22 percent and 16 percent respectively; and broadband subscribers and revenue up 8 percent and 11 percent respectively. Revenues for the half year grew 10 percent to $11 billion as revenues for the September quarter exceeded that of the June quarter by $179 million or 3.3 percent.
Interest cost declined in the quarter to $934 million from $1 billion last year and should fall in the coming quarters as the interest rates reset downwards in November, to 7.2 percent from 7.787 percent with the fall in local Treasury bill rates. For the half-year interest cost amounts $2 billion. Staff costs are down by $300 million in the six months period from that of 2014 to be at $1.246 billion but out payments and direct cost rose $226 million with the September quarter by $149 million over the June quarter.
The company generated operating cash flow of $520 million compared with negative cash flows of $133 million in six months to September 2014.
The financials does not show any indication of a merger between the local operations of Flow and C&W but the latter wrote large amounts of assets and made staff redundant but no mention is made in the report as to how the two entities will be operating going forward. There are questions to be answered here.
The company’s shares are listed on the Jamaica Stock Exchange last traded at $1.45.

Filed Under: Buy Rated, Company News, Company Results Tagged With: C&WJ, Flow, Garfield Sinclair, Jamaica Stock Exchange, Jamaican Stock

Cable & Wireless’ makeover

September 10, 2015 by IC Insider.com

Cable & Wireless HQ – the stock is in demand with the merger of Flow and C&W gathers pace.

Cable & Wireless seems to be going through a period of rebirth having ceded a great deal of their territory to the completion in past years, as the parent company chopped and changed top management. They are now growing again with pretty strong top-line gains with a stable management team.
There was much growth in the financial year to March and since then the industry has seen much change, with number portability, Flow being acquired by Cable & Wireless and Digicel acquiring Sportsmax.
“We gained around 20,000 new prepaid mobile customers resulting from number portability almost the same as left, revenue for the average new customer is more than the ones we lost” Garfield Sinclair, Chief Executive officer of Cable & Wireless (C&W) stated in a presentation to shareholders and some C&W senior staff at Wednesday’s annual general meeting of the company. Sinclair also stated “we gained four more postpaid customers to each one lost as a result of number portability”.
In a wide ranging presentation at the AGM the C&W CEO stated that the merger of the Flow and C&W has many challenges, none more so than the integration of the staff. The physical plant with differing technologies also pose challenges and with take time to be fully complete. But the CEO stated that they were making progress on all fronts as he commended the Human Resource team in the work they have done in the staff integration so far.

C&W CEO Gary Sinclair

By October we would have completed the upgrading and expansion of our 4G network system on the south coast of the island to accommodate increasing demand by customers and by November that on the north coast, should be complete.
“We now have almost 900,000 cell phone customers, 250,000 landlines and 80,000 data only customers”, Sinclairstated. At the end of the fiscal year to March C&W indicated that the cell phone numbers were around 820,000 but Sinclair confirmed to IC Insider that the numbers are now at 875,000. The annual report stated that in the “peak season Christmas a record 65,000 mobile customers were added to the network”. The 2015 numbers suggest a continuation of the strong gains being made in the acquisition of mobile customers. The name change from LIME to Flow is likely to enhance the prospects for increased mobile customers. The continued growth augurs well for increased revenues and the company’s move to restart generating positive profit.
“Investors have to judge us on the EBITDA not on accounting profits that is the basis used in our industry”, Sinclair said. In this regard he said that by the end of the current fiscal year EBITDA that was at 20% of revenues in 2015 should be at 30 percent. This would work out at around $7.5 billion assuming revenues continue to grow at the 2015 pace on a standalone basis and would result in an absolute profit for the company, the first for several years. In the June quarter EBITDA rose a very strong 82 percent, with net results seeing a sharp fall to a loss of just $303 million, from a loss of $712 million in 2014 as revenues grew 13 percent to $5.45 billion, for the June 2015 quarter, aided by a 17 percent growth in mobile subscribers and 27 percent increased mobile revenues. Operating expenses were static at $4 billion but finance cost was up to $1.1 billion from $962 million in 2014, depreciation was down and amortization up.
EBITDA while an important measure, especially in the expansion phase it cannot be the sole target, ultimately investors want a return on investment and net profit ultimately is the most important measure so that dividends can be paid.
While there were few details of the merger with the Flow operations, that is expected to be a big boost to the system with more revenues and lower cost with some of the cost squeezed out from the elimination of duplications.

Filed Under: Company News, Company Results Tagged With: Cable & Wireless, EBITDA, Flow, Garfield Sinclair

Are Proven & NCB buying 36% of Guardian?

May 6, 2015 by IC Insider.com

Investment banker Proven Investments and National Commercial Bank, Jamaica’s number one banking group, are lining up to acquire some large blocks of shares in Guardian Holdings, the Trinidad & Tobago company. IC Insider has confirmed that the targets are – Tenetic Limited block of 35.84 million, which, amounts to 15.46 percent of the company and Arthur Lok Jack’s direct holding of 6.29 percent or 14.59 million units. Arthur Lok Jack’s is listed as having a beneficial interest in Tenetic. Royal Insurance Trinidad holds 22.33 million units or 9.63 percent and RBC Trust T&T controls 4.99 percent or 11.57 million shares.
Lok Jack wants out, as various sources indicate that his holdings were partially funded by borrowings and he now needs to liquidate the debt. Royal Bank, according to our sources, is moving completely out of the Caribbean region. This sale would be another aspect of their exiting. RBC sold the Jamaica operations last year to Sagicor Group and the Suriname operation to Republic Bank of Trinidad, slated to be sold the Cayman operation.
The acquisition of Guardian would be a complete reversal, returning the company to its Jamaican roots. Guardian was once majority owned by Jamaica Mutual life, but Mutual sold out their holding sometimes before they ran into Jamaica’s problems and folded. The Jamaican entities consider the company to be clean, well run and considerably undervalued. Part of the plan is to increase the dividend payments, which is just a third of profits and relist the shares on the Jamaica Stock exchange once more. No time frame was given when the deal will be sealed, but Proven has just raised approximately US$30 million in a rights issue of shares, so they are well prepared to take up their share with borrowings being a part it of the funding.
Guardian traded in Trinidad at TT$14.26 or U$2.23 on Wednesday. This would mean that the sale to Proven and NCB stands at a whopping U$$188 million, representing approximately 84.33 million units or 36.37 percent of the current share capital of 231.9 million units.
Guardian is primarily a Life Insurance company but also owns a general insurance arm. NCB operates the well known OMNI Life Insurance Company. Part of the likely synergy in future would be a merger of general insurance companies with Omni to be sold to the Life Insurance arm, enjoying economies of scale. The possibility exists that and the expanded general Insurance company could be listed on the stock exchanges within the Caribbean, thus spreading the risk associated therewith.
Guardian reported total revenues of TT$4.8 billion in 2014 and profit to shareholders of TT$401 million. Total shareholder equity stood at TT$2.9 billion and net asset per share TT$2.65. Dividends paid was 57 cents, covered by profits to the tune of just over three times.
Last year Proven acquired a block of shares in Knutsford Express bring their total holdings to 20,000,002 units or 20 percent of the company and 49 percent of Access Financial Services.Proven Investments is chaired by the leading Jamaican Lawyer, Hugh Hart, a former senator and minister of government under the Jamaica Labour Party regime of the 1980s. Some of the top shareholders include directly, or through companies they are connected to are Hugh Hart, Garfield Sinclair, CEO of Cable & Wireless Jamaica, Christopher Williams, President, Proven Investments and former manager of NCB Capital Markets, an NCB subsidiary; Senator Mark Golding, Justice Minister; Peter Bunting, Security Minister and Paula Kerr-Jarret. Transport and Works Minister Omar Davies is also a holder of shares in the company.
Patrick Hylton, President of NCB, is a director of Massy Holdings, of which Lok Jack is the Chairman.

Filed Under: Breaking News, Company News, Feature Stories Tagged With: Arthur Lok Jack’, Chris Williams, Garfield Sinclair, Hugh hart, Jamaica Mutual Life, Mutual life, Peter Bunting, Royal Insurance Trinidad, Tenetic Limited

A Lime money wallet in your pocket

January 23, 2015 by IC Insider.com

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Cable & Wireless Jamaica plans to launch its own mobile wallet as early as this year. It would provide money payment services for those without banking accounts, the company chief executive says.
“We are going to hopefully launch this year the M-wallet. We are going to create the ability of the average Jamaican with a cell phone to engage in sophisticated banking services as never before for those people who are unbanked,” Cable & Wireless president Garfield Sinclair said at the JSE 10th Regional Conference held at the Jamaica Pegasus Hotel on Tuesday.
Local smartphone users already can pay for goods and services using apps including Paypal and Payoneer. However Cable & Wireless could offer the services similar to m-pesa money transfer system on phones in Kenya. It allows phones to transfer cash using SMS text without internet connectivity.
The jump towards mobile wallets however requires a strong uptake to cover start-up costs. Just this week US based Amazon, the largest online retail store announced plans to fold its mobile wallet after just six months amid a slow take up. It reportedly offered loyalty points but failed to integrate with debit and credit cards.

Filed Under: Company News Tagged With: C&WJ, Garfield Sinclair, Jamaica Pegasus Hotel, JSE 10th Regional Conference, M-wallet, Payoneer, Paypal

72% Customer Satisfaction for CWJ

July 28, 2014 by IC Insider.com

Cable & Wireless Jamaica (CWJ) trading as Lime, ranked highest in customer satisfaction among all of Jamaica’s utility providers, according to a survey by the Office of Utilities Regulation, OUR CWJ said in a release recently.
According to the report the Regulator said 72% of respondents reported that they were satisfied doing business with Cable & Wireless.
Among its telecommunications rivals Digicel, Flow and other utility providers, customers gave the company, the highest marks for product quality and accurate billing and placed them on top for customer care that makes them feel valued and respected.
“We have consistently put customers at the center of our strategic commercial decision-making and these objective survey results are the just reward for those efforts.” Garfield Sinclair Cable & Wireless CEO stated in response to this latest round positive public perception.
Cable & Wireless also received coveted recognition for being the only Telecommunications provider to register a double-digit increase in service quality over the 12-month review period.