Scotia Group traded as high as $22.89 before closing at $20.50 and was the main factor in the big jump in the Jamaica Stock Exchange two main indices while the prices of 9 stocks rose and 8 declined as 27 securities traded resulting in 5,724,168 shares trading valued at $32,909,845.
Main Market| The prices of 5 companies in the main market advanced and 6 declined as the indices jumped as the JSE Market Index gained 2,054.10 points to 76,042.79 and the JSE All Jamaican Composite index jumped by 2,296.84 points to close at 83,737.81.
Gains| Stocks recording gains at the end of trading in the main market are Cable & Wireless with 1,290,256 units to close with a 2 cents gain at 44 cents, Carreras traded 3,594 shares to close with a gain of a cent at $33.57, Gleaner gained 5 cents to close at $1.15 with 20,000 units changing hands, Jamaica Money Market Brokers 1,494 units to close at $7.27 up by 5 cents and Supreme Ventures with 79,975 shares to close with a gain of 5 cents at $2.10.
Firm| There were 6 stocks in the main market to close without a change in price with Desnoes & Geddes trading 1,064 shares and closed at $4.50, Jamaica Broilers 715,645 units and closed at $4.85, Jamaica Money Market Brokers 8.75% preference share, 654,081 units to close at $3.03, Jamaica Producers 96,627 units at $18.26, Mayberry Investments 2,040 shares in closing at $1.70 and Scotia Group 868,539 shares to close at $20.50 but traded as high as $22.98.
Declines| The number of stocks that declined in the main market are Berger Paints with 10,000 units in losing a cent to end at $1.67, Caribbean Cement with 25,899 shares to close at $3.90 by falling by a cent, Hardware & Lumber 36,100 shares to close at $10.50 for a $1.20 fall, National Commercial Bank 57,933 shares to close at $18.10 for a 20 drop, Pan Jamaican Investment 2,400 units to end 23 cents lower at $49.05 and Sagicor Group with 23,157 shares in closing at $9.03 for a 47 cents fall.
Junior Market| The JSE Junior Market Index declined by 6.86 points to close at 747.40 as 10 stocks traded with 4 advancing and 2 declining.
Gains| Stocks recording gains at the end of trading in the junior market are Dolphin Cove that traded 1,000 units to close at $8.23 with a gain of 3 cents, Medical Disposables 391,382 shares to close with a one cent gain at $2.05, Jamaican Teas up 29 cents to end at $3.50 for 49,470 shares and Lasco Manufacturing traded 1,035,268 units to close up a cent at $1.20.
Firm Trades| 4 stocks in the junior market that traded to close at the same price as the day before with Access Financial Services trading 4,044 units at $11.50, Caribbean Producers with 200,000 units to close at $3, Consolidated Bakeries 108,000 to close at $1.10 and Lasco Financial Services 31,200 shares at $1.20.
Declines| Stocks declining in the junior market at the end of trading are General Accident that traded 7,000 units at $1.50 as the price lost 10 cents and Lasco Distributors with 8,000 units, closed 5 cents lower at $1.35.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had only 3 stocks with the bid higher than the last selling price and 8 stocks with offers that were lower.
JSE Market gains 2,000 points
Very moderate market movement
There was very moderate activity on the Jamaica Stock Exchange at the close of the trading week as the prices of 10 stocks rose and 8 declined as only 25 securities traded in a very slow market session resulting in 1,571,377 shares trading valued at a mere $8,273,649.
Main Market| Six companies in the main and US dollar markets advanced and 6 declined as the indices moved down moderately with the JSE Market Index inching down by 6.80 points to 74,592.23 and the JSE All Jamaican Composite index shedding just 7.60 points to close at 82,115.83.
Gains| Stocks recording gains at the end of trading in the main market are Kingston Wharves with 9,534 shares to close with a gain of 48 cents at $5.99, National Commercial Bank gained 10 cents to close at $18.10 with 9,100 units changing hands, Proven Investments ordinary share, with 8,570 units to close up 0.02 us cents at 18 US cents, Sagicor Group 18,000 units closing at $9.80 for a 30 cents gain, Salada Foods 5,000 shares to close at $8 as the price gained 50 cents and Scotia Investments with only 700 shares to end at $23.10 for a gain of 10 cents.
Firm| There were only 4 stocks in the main market to close without a change in price as Cable & Wireless with 43,699 shares closed at 40 cents, Carreras with 5,000 units closed at $33.56, Jamaica Money Market Brokers 7.50% preference share traded 500,000 and closed at $2 and Proven Investments 8% preference share with 381,800 units closed at $5.07.
Declines| The stocks declining in the main market are Gleaner with 2,500 shares while falling a cent to close at $1.10, Grace Kennedy lost $1.49 to end at $56.51 with 1,600 shares, Jamaica Broilers exchanged 20,538 units to close down a cent at $4.85. Pan Jamaican Investment 10,529 shares to end 55 cents lower at $49.05, Scotia Group had 110,308 units at $20.50 at the close as the price shed 12 cents and Supreme Ventures 3,800 shares to close with a 5 cents decline at $2.05.
Junior Market| The JSE Junior Market Index declined by 8.14 points to close at 751.34 as 9 stocks traded with 4 advancing and only 2 declining.
Gains| Stocks recording gains at the end of trading in the junior market are AMG Packaging that traded 5,560 units to close at $3.50, up by a cent, Access Financial with 72,600 units to close at $11.50 with a gain of $1.50, Caribbean Cream 3,000 units to close at 79 cents with a 4 cents increase and Caribbean Producers with 90,000 units in closing at $3, up 2 cents.
Firm Trades| The 3 stocks in the junior market traded to close at the same price as the day before are Blue Power with 3,400 shares in closing at $9.01, Lasco Financial 3,000 shares while closing at $1.20 and Medical Disposables 94,700 units, closing at $2.04.
Declines| Stocks declining in the junior market at the end of trading are General Accident with 2,000 units a $1.60, down 10 cents and Lasco Manufacturing with 166,439 shares to end down by 10 cents at $1.10.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 3 stocks with the bid higher than the last selling price and 4 stocks with offers that were lower.
SVL: Revenues down, big profit increase
Supreme Ventures Limited posted net profit after tax for the first quarter of $301 million, a 64 percent increase over $184 million for the comparative period in 2012. The improvement was directly attributable to low lottery game payments for the quarter and a huge change to taxation charge on profit. While pretax profit climbed by $38 million, the tax on profit fell from $162 million in 2012 to just $82 million in 2013. The reduction in taxation is not sustainable. The rate used in the quarter was 25 percent, going forward it will be 30 percent. In all likelihood the charge for the first quarter may also have to be adjusted upwards to 30 percent as well.
“We continue to remind our investors that volatilities in game liabilities can adversely impact profitability in any financial quarter. The overall profitability of the company was also positively impacted by a $791.3 million reduction in direct expenses, reorganization of the company’s operating structure and interest income”, a management statement said.
Challenges | The second quarter onwards is poised to be a very challenging, as new tax measures for the sector took effect in April 2013. The tax package aims to collect a further $1.5 billion from the gaming industry.
The measures increase the tax rate for each lottery game from 17 percent to 20 percent and 23 percent to 25 percent respectively. The Company has taken the decision to absorb the fees for 2013, in light of what they see as uncertainty with the implementation process for this new licensing regime. They also speak of the elimination of the unclaimed prize allocation previously retained by the company. This allocation now has to be paid over to the Betting Gaming and Lotteries Commission. The effect of these new tax measures will no doubt affect the Company’s ability to achieve the levels of profitability projected over 2012.
Revenues | Revenue for the quarter was down 9 percent to $7.4 billion compared to $8.15 billion for the corresponding quarter in 2012. The gaming company management indicated that the decline was mainly due to decreases in lottery and VLT revenues of 11 percent and 39 percent respectively when compared to the same period in 2012. The significant decline in VLT revenues was directly attributable to closure of the Coral Cliff gaming lounge in Montego Bay for refurbishing which was rebranded and reopened as Acropolis Montego Bay on 7th March. Acropolis Portmore was also temporarily closed in January for refurbishing and new layout of the gaming floor. It is yet to be reopened. The Odyssey Gaming Lounge opened on 7th February and is enjoying early market support.
The Earnings per Share was $0.11, compared to $0.07 for the corresponding period in 2012.
The company has equity of $4 billion and borrowed debt of only $324 million. Cash was $1.45 billion at the end of March, more than enough to cover short term liabilities.
A dividend of $0.10 per share amounting to $263.725 million was paid in March. The company says it continues to execute an aggressive dividend payment policy, of quarterly payments based on the company’s performance.
During the quarter, the company commenced a scheme of amalgamating the betting, gaming and lottery operations of its subsidiaries into a single operating entity called Prime Sports (Jamaica) Limited.
The Betting Gaming and Lotteries Commission renewed the lottery license which has been issued to Prime Sports (Jamaica) Limited and will expire in January 2033. The company’s Bookmaker’s Permit was also renewed and issued to Prime Sports (Jamaica) Limited with the next renewal date being 31st March 2015.
Stock outlook | The stock traded on Monday, 2oth May at $3, up from $2.80 before the release of the results and is up from $2.60 at the start of May. Investing in the stock with the hope of short-term gains seem to be a bit of a gamble at this time.
Yes and no to dividends
It has come as no surprise that Pan Jamaican Investment Trust has decided to forgo the payment of a dividend, a decision made at the board meeting held on the 16th of May. The group has been making payments of 50 cents per quarter but upped it to $1.10 in March. The directors stated “having paid $1.10 in March 2013, the Directors agreed that it would not be prudent to pay another dividend at this time and will consider another dividend in the third quarter”. The increased amount was apparently due to a decision by government to increase withholding tax from 5 percent to 15 percent.
SVL to pay 8 cents | The Board of Directors of Supreme Ventures Limited declared a dividend of $0.08 per share payable on June 17, 2013 to shareholders on record as at June 3, 2013. The ex-dividend date is May 30, 2013.