Jamaican Teas expands property arm

July 4, 2013 by

Jamaican Teas Limited (JAMT) has advised that an agreement has been signed to purchase Orchid Estates in Yallahs, St. Thomas. The property comprises eleven acres and has been approved for the construction of 71 individual housing solutions. The total cost of the purchase is $63,000,000 and construction should commence during 2013 with the first units being delivered in 2014. The low-income scheme, which was at an advanced stage of development before the acquisition by H Mahfood & Sons, requires completion of some units which require roofs and internals fittings, the full build-out of other units plus road works.

The development will be undertaken by H Mahfood & Sons Limited, a wholly owned subsidiary of JAMT.

The company successfully developed a 19 unit apartment complex at Kingsway in Kingston this year and the units should be handed over to prospective owners by the end of the company’s financial year in September.

Jamaican Teas reported profits of $51.2 million for the six months versus $43.2 million in the six months period of the prior year, an increase of 18.6 percent from improvement in sales of 44 percent to $528.2 million versus $365.9 million in the prior year.

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

Scotiabank wins Service Award

July 4, 2013 by

Press Release, 3rd July 2013 | Scotiabank Jamaica scored high marks to cop this year’s PSOJ/Jamaica Customer Service Association’s (JaCSA) Service Excellence Award. The Bank emerged as one of three large companies with top scores in leadership strategy and governance, service standards, the existence of a service charter and its deployment throughout the organisation. The awards were held recently, in Kingston.

Rosemarie Voordouw, Director Customer Experience stated that customer insights and feedback; people; technology & processes; and governance are the pillars of Scotiabank’s customer service strategy. The judges’ report acknowledged this focus, noting that the company demonstrates world class practices in its delivery of customer service throughout its branches and contact centre, and that rich Service Excellence systems were “alive and integrated into the fabric of the organisation”.

Scotiabnk_psoj trophy150x150The judges report also stated that “passion for service excellence is rife among leaders and other employees”. This shows up in Scotiabank’s practice of continuous customer feedback measurement which includes daily, monthly and quarterly monitoring via surveys. The survey results form the basis action planning to address service gaps. Scotiabank’s strategy of creating a team dedicated to monitoring customer service delivery, and the well-defined complaint resolution process, also came in for commendation by the PSOJ/JaCSA team the bank said.

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

New prices for Lasco on Friday

July 4, 2013 by

All three Lasco listed companies that approved a 10 for 1 stock split at Extraordinary General meeting on June 26, 2013 will see the stocks trading at the new split price of less than $2 per share on Friday. The record date for the split is in the 9th of July which is not significant.

Stock split by the numbers |  Lasco Manufacturing will have 4.087 billion shares available to trade, Lasco Distributors 3.3664 billion shares in issue and Lasco Finance 1.228 billion shares.  At the close of trading on Wednesday 3rd July 2013, Lasco Manufacturing closed at $16.50, Lasco Distributors at $17 and Lasco Finance closed at $12.77. Based on these closing prices, it is not possible for the stocks to close above the equivalent of $2 on Friday.

Improved results for the first quarter of the 2014 financial year, which ends next year March, could help push the prices up when released in early August. However, early fervour after the split on Friday could well move prices to the extent that only exceptional results can move the stock prices higher.

Filed Under: Company News, Dividends Tagged With: , ,

JSE: Another record high for juniors

July 4, 2013 by

Wednesday, 3rd July 2013 | The junior market hit another all-time high of 815.36, up 3.34 points from yesterday’s all time high of 812.02 with Lasco Financial Services and Lasco Manufacturing posting gains on the day.

The main market, which broke its losing streak yesterday, continued the up-movement as all indices with trades climbed except the US equities. The all Jamaican Index gained 143.73 points to close at 89,037.69, the Jamaica Stock Exchange Market index closed at 87,434.18 up 96.92 on the day on a day when 8 stocks advanced in price and 8 declined.

Trading took place with 2.8 million shares as investors expended only $21.57 million, which is above the levels of Tuesday’s trading. Only one stock, Lasco Manufacturing, closed with the last traded price reaching an all-time record at the close.

Main Market | There is not much interest in this side of the market as investors’ main attraction was the Lasco stocks. As of Friday 5th July, these stocks will trade at lower prices based on the 10 for 1 stock split. Scotia Investments, no doubt based on an arbitrage situation that now exists with the stock selling in Trinidad at $28.60 while trading at $26.25 in Jamaica, was up 15 cents. $1.3 million was swapped for the stock as 49,500 units changed hands. The next highest trade was Kingston Wharves which traded 11,400 units valued at $923,000. Pan Jamaican Investments closed down $1.52 at $51.08 as 2,435 units traded.

Market intelligence | The supply of Cable & Wireless on offer at 15 cents remains at 29.4 million units at the end of trading. The immediate bid is for 2.6 million at 14 cents, next is 1 million at 12 cents, then 9.76 million at 11 cents. RJR still has a bid of $1.23 to buy 4.79 million shares. The supply seems to be drying up with the lowest offer being at $1.89 with only 46,000 units in all on offer. There is potential for price appreciation but RJR’s recent results don’t suggest that earnings can support any major upward price movement. Carreras traded back up to $56 dollars but the bids in the system appear to be weak and offers are greater than bids that are above $53.01. Grace Kennedy’s stock, which picked up in price recently, has 700,000 unit son offer at $61 that has stymied any further upward movement for the time being. Mayberry Investments had just one bid on the stock at $2.60.

Junior market | Six junior market stocks traded, as Lasco Financial at $12.77 down 67 cents with 272,000 shares trading between $12.77 and $13.01. Lasco Manufacturing traded 337,500 shares with the price closing at $16.50 up 50 cents. Lasco Distributors, closed at $16.50 down $1.50, 346,000 units traded between $16.10 and $17. Caribbean Producers closed at $2.03 while trading 868,622 units. Blue Power did not trade and there are offers amounting to 306,000 units at $10.40 to $10.50 at the end of trading, but the bids have backed off with only 50,000 units on bid at around $9.

The junior market golden cross grows stronger. The 50 day and 120 moving averages trend-lines are crossing over the 200 day moving average which is a strong market signal for a major move in the months ahead. It will be interesting to see what effect the Lasco splits will have on values on Friday when all three stocks sell at the lower stock split prices.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer market sentiment indicator shows that bids for 5 stocks were higher with 5 stocks having offers lower than their last selling price. The junior market has three of the stocks in each category of higher bids and lower offers.

JSEIndicesJul3

Filed Under: JSE Main Market, Stock Market Tagged With: , ,

JSE: Junior market hits record high

July 2, 2013 by

Tuesday, 2nd July 2013 | The junior market that has been on a bull run from April closed today at a new all-time high of 812.02 as the index surpassed the previous all-time high of 811 points that was established on November 9, 2011. This market has gained 25 percent this year rising from 647.78 points as the three Lasco companies posted almost daily new highs since they announced a 10 for 1 stock split and released full year results at the start of June.

The main market broke its losing streak with a rise in the main indices with the all Jamaican Index gaining 951.70 points to close at 88,893.96 ad the Jamaica Stock Exchange index closing at 87,337.26, up 540.59 on the day.

Although all of the indices with stocks trading rose today, the advance decline ratio was just able to remain positive as 9 stocks gained to 6 that declined as trading levels declined sharply from Monday. Trading took place with 2.43 million shares as investors expended only $15.4 million, well down on Monday’s trading. Only one stock, Lasco Distributors, closed with the last traded price reaching an all-time record at the close.

stockmarketblue150x150Main Market | Carreras shares hit $56.04 by gaining $3.04 as just 4,430 units valued at $240,815 traded, Grace closed up 35 cents to  end the day at $60.35, a mere 1,240 units shifted hands, Sagicor Life traded 563,672 units valued at $5 million as the price moved up 63 cents to close at $9. Scotia Group traded 147,000 units, valued at $3.1 million and gained one cent in the process. Scotia Investment lost $1.40 in closing at $26.10 with 10,100 shares.

Like Monday, the supply of Cable & Wireless on offer at 15 cents fell a bit more to 29.4 million shares with 557,000 units trading at 14 cents. The bid to buy 4.79 million RJR shares still stands at $1.23 with no supply at hand.

Junior market | Seven junior market stocks traded with Lasco Financial at $12.10, down 60 cents, with 170,000 shares trading between $12.10 and $13. Lasco Manufacturing traded 5,000 shares with the price closing at $16. Lasco Distributors, closed at $18 but only 3,200 units traded between $16.50 and $18. General Accident traded 399,554 shares and the price closed at $2 and Caribbean Producers closed at $2.02 in trading 240,606 units. Blue Power closed at $10.40, down 60 cents, with 37,283 units but there were offers amounting to 332,000 units at $10.40 to $10.50 at the end of trading.

The junior market is in a golden cross as the 50-day and 120-day moving averages trend-lines have crossed over the 200-day moving average. This is a strong market signal for a major move in the months ahead.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer market sentiment indicator shows that bids for 5 stocks were higher with 3 stocks having offers lower than their last selling price.

JSEIndicesJul2

Filed Under: JSE Main Market, Stock Market Tagged With: , ,

Stocks to watch: week of 1st July, 2013

July 1, 2013 by

Keep an eye on these stocks for movement | There aren’t many changes to this week’s posting compared to last weeks’. We added two new ones in the junior market as the Lasco companies gain interest from the approved stock split of 10 for 1 and one for the TTSE.

StocksToWatchJul1

Filed Under: Company News, JSE Main Market, Stock Market, Stocks to watch, TTSE Market Tagged With: , ,

JSE: Advancing & declining stocks in a battle

July 1, 2013 by

Monday, 1st July 2013 | While the junior market index continues to advance towards the all-time high of 811 points, the main market indices fell moderately as investors try to find acceptable prices to execute trades.

Based on the recent rise in the prices of many stocks, it’s hard to see how this stalemate will change in the short term without new information to entice investors to view stocks as attractive to acquire now, rather than later. Although the majority of the indices fell today, the advance decline ratio was just able to remain positive as 8 stocks gained to 7 that declined. Trading levels of 4.7 million shares was half of Friday’s, but even less was expended as only $38 million traded compared to $116.17 million invested on Friday. Three stocks closed with the last selling price reaching an all-time record. These are Blue Power at $11, Lasco Distributors at $16 and Lasco manufacturing at $16.

Carreras shares gained 27 cents to $52 as just 9,096 units valued at $482,000 traded, JMMB closed up 50 cents as Scotia Investment bought the bulk of the 1,093 million units that traded, with the stock closing at $8.50. Active offers for JMMB is now at $9.25 an indication that the supply at recent market prices is drying up, but investors may well sell below this price as there is a big gap between bids of $7.72 and offers prices.  Sagicor Life traded 248,000 units valued at $2 million as the price slipped back by 18 cents. Scotia Group traded 176,000 units, valued at $3.7 million and lost 31 cents in the process.

The supply of Cable & Wireless share on offer at 15 cents fell below the 30 million mark at the end of trading as the amount offered is now at 29.88 million units. RJR has a bid of $1.23 to buy 4.79 million shares as this stock has had a fair volume of trading recently.

Junior market | Eight junior market stocks traded as Lasco Financial, continuing to respond to the 10 to 1 stock split, closed at $12.70 down 30 cents on Friday’s last traded price with 101,185 shares trading between $12.60 and $13. Lasco Manufacturing also responding to the announced stock split, traded over 736,000 shares, closing at $16 up by 40 cents with $11.66 million invested, while Lasco Distributors closed at $16 after trading at a record high of $16.50 with only 206,408 units valued at $3.37 million trading. Caribbean Cream traded down 15 cents to close at $1.05 with 350,000 units changing hands. Blue Power closed at $11 up $1 on the last selling price with 38,000 units but the offer was for 303,000 units at $10.50 at the end of trading. AMG packaging traded 27,800 shares at $4.20.

IC bid-offer Indicator | At the end of trading, the Investor’s Choice bid-offer market sentiment indicator shows that bids for 3 stocks were higher with 1 stock having an offer lower than the last selling price.

JSEIndicesJul1

Filed Under: JSE Main Market, Stock Market Tagged With: , ,

Blue Power dividend

July 1, 2013 by

Blue Power Group Limited declared a dividend of 15 cents per share payable on August 16, 2013 to shareholders on record as at July 31, 2013. The ex-dividend date is July 29, 2013.

The company last paid a dividend of 10.5 cents per share on September 6, 2012. The latest dividend is in keeping with the rise in profits to $1.84 per share compared with the earnings of 83 cents in 2012.

The board also agreed to introduce a resolution at the next Annual General Meeting to modify the Articles of Association to permit the appointment of two more directors to the Board which consists of six members at the present time.

To know more about Blue Power, read Blue Powered huge profit increase posted 16th June 2013.

Filed Under: Company News, Dividends Tagged With: , ,

$2.85 for JSE shares, is it worth it?

July 1, 2013 by

The Jamaica Stock Exchange (JSE) prospectus to raise $107,865,000 is now released to the public for consideration with the issue scheduled to open at 9:00 am, Friday 5th July 2013.  The Invitation is scheduled to close at 4:00 pm, Friday 19th July, subject to the right of the Company to close the Invitation at any time after it opens.  The total amount of shares being made available will be 38.25 million units comprising 28 million being issued directly by the Jamaica Stock Exchange and 10.2 million by JMMB. JMMB is selling the shares they acquired when they took over the Capital Group, which put their holding at 18.18 percent, well above the threshold of 10 percent any one investor is allowed to hold as stipulated by the JSE articles.

The issue price | IC Insider computes that the stock carries a value around 10 times 2013 earnings, based on the assumption that trading activity continues for the rest of the year at the rate experienced in June. For the 12 months to December last year, profit of $93 million was reported but that figure included revenue from the sale of a board seat to Proven Wealth Management for $60 million, as well as large fee income from the purchase of Lascelles’ shares that were acquired by Campari last year and to a lesser degree the shares traded when Capital & Credit was acquired.

Existing capital | There are currently 112,200,000 (formerly 28 million) ordinary shares in issue and the new shares will bring the issued capital to 140 million units.  The shares have a book value of $5.52 but earnings per share based on 2012 profit will be just over $0.83 and that figure is inflated by the non-recurring income mentioned above.

jse_logo150x150Profit after tax amounted to $5.8 million compared to a loss of $6.1 million in 2012. For the quarter ending March, the JSE’s income rose 8 percent to reach $69.5m compared to $64.4m in 2012. Other Operating Income increased by $5.5m or 32% over the same period, primarily due to an increase of $5.3 million in revenue from the JSE regional conference. Investment income of $22 million jumped $14 million over 2012 due largely to the gains on US dollar investments as a result of devaluation of the Jamaican dollar.

Positives | The number of shares to be issued is relative small but shareholding is limited to 10 percent of issued shares. The preference shares which was a debt instrument was repaid and these funds replace the amounts paid out. The stock market is not at its most buoyant but with interest rates having declined below ten percent and government slashing the fiscal deficit, rates could go lower. This development ultimately makes stock market investments more attractive and drive up trading volumes and therefore fee income for the exchange. The stock exchange plans for more instruments to be traded on the exchange but there are no imminent new listings that are known. The stock exchange is showing signs of greater activity this year but it has not reached a level to ensure that the JSE makes an operating profit. The JSE will benefit from listing fee income if the value of shares rise, as the annual listing fees are tied to the value of each company’s shares that are outstanding at the start of each year.

Negatives | The number of shares to be issued will not ensure a good level of liquidity for the stock, which will keep bigger investors away. There are no rules preventing existing shareholders from selling their holdings in partially or in full thus increasing the volume that could become available to the wider public. Short term profit prospects are not exciting suggesting that the stock is not very attractively priced relative to the rest of the market. The company has an oversized board of 19, resulting in an unnecessary waste of funds and an unwieldy structure that makes it more difficult to properly run board meetings and by extension, the company.

Revenues | The Company derives its revenue from a range of sources including the JSE cess, calculated on the value of each market transaction, fees charged for listing companies at the initial stage, annually, as well as any supplementary listings, membership, transactions, the registrar and trustee fees paid to its subsidiary company JCSD, amongst others, income generated from the provision of conferences, seminars and the e-Campus. The JSE has recently entered into a Memorandum of Understanding with the Bank of Jamaica to work towards the development of a fixed income trading platform for Government of Jamaica securities and corporate bonds. It is also conducting research into the development of exchange-traded products and other exchange-related products.

In summary | Stock markets are cyclical in nature resulting in peaks and troughs in earnings flowing from bull and bear markets. At this juncture, the market is in the process of moving into a bull market. Investors who buy the shares now are essentially buying at the lower end of the market. The levels of trading currently are a fraction of what they have been in the past, so the potential is huge going forward. The change in interest rates and the focus of government on controlling the fiscal deficit will ultimately have a huge impact on the fortunes of the stock exchange. Investors should not be looking for any big pay day any time soon from this stock.

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

Jamaica Broilers is buy rated

July 1, 2013 by

IC Insider is projecting a doubling of earnings for the current year ending in April 2014 for Jamaica Broilers. We project profits to hit $2.22 billion, which translates to $1.85 per share, up from the $1.1 billion reported in its latest audited results.

The improvement is expected from restoration of the gross margin for the broiler and feed business to levels that preceded the 2013 fiscal year, as well as increased sales and margin in the ethanol segment from full production compared to only partial production for most of last year. The ethanol operation generated the bulk of the profit in the April quarter of $260 million on revenue of $500 million compared to only $74 million on revenues of $1.36 billion for the nine months to January this year. Just maintaining the profitability in this segment, assuming that the other areas hold up as well as they did in the last year, earnings would likely grow by about $750 million or a little more than 60 cents per share.

The 2013 profit resulted in earnings per share of 91 cents based on 1.2 billion shares issued and arose from a 12.5 percent increase in revenues to $26.7 billion. IC Insider is projecting revenues of $29.8 billion for 2014, representing 11.6 percent more than in 2013.

While the increased results for the full year may not seem impressive as seen by the lack of reaction in the stock market to the results, the final numbers reflect a major recovery from the end of January as profit was down for the nine months from $687 million to $562 million. The last quarter profit jumped by 114 percent suggesting that this trend could continue well into the new fiscal year and is in keeping with the above forecast.

Jamaica-Broilers-Group_logo150x150Management’s Comments | In releasing the January results, the company management stated, “Gross profits were negatively impacted by increased US$ costs for corn and soya bean residue — our main feed ingredients. This, in addition to the depreciation in the value of the Jamaican currency, has resulted in continuing cost increases. Management felt constrained during this quarter from fully passing on these cost increases in selling price adjustments.

“Distribution and administrative costs reflect increases when compared to this quarter last year due to a number of unexpected items of expenditure. For much of this quarter our Co-Generation electricity operation was out of service. During this time over $50million in fixed costs were carried in administrative expenses while Jamaica Public Service invoices were charged to the Best Dressed Chicken Processing Plant. The Co-generation plant came back into service in mid-January. In addition, costs were incurred in relation to organizational strengthening and an assessment by the Tax Authorities, related to GCT deferred on imports.

The Ethanol Division maintained production under tolling contracts at 100% of capacity during this quarter. The segment result for this Division reflects a positive $81 million for the quarter; with the year-to-date result now showing $74million versus the negative $7 million at the end of the second quarter. Also, the build out in the Haiti operations is continuing with ever increasing sales of Haitian produced baby chicks, feed, layer birds, table eggs and processed chicken.”

Balance sheet | JBG was able to reduce the levels of inventories carried from sales to inventories of 7 times to 9 times, but it did not stop there, as inventories actually fell by $400 million, while at the same time, receivables climbed by $500 million at year end. The group took on more debt to fund asset acquisitions during the year as net debt climbed $1.38 billion to reach $5.49 billion but equity is up by $1.3 billion.

To read the full report Jamaica Broilers major profit gains, click here

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