Wigton inadequate disclosures in the quarterly report.
The capital market got a huge body blow with the release of Wigton Windfarm quarterly results for the first quarter to June that suggests a bright future outcome but the reality is vastly different.
Analysis of the results and historical data show clearly that investors have been unwittingly, duped into believing that the earnings of the company had blasted off sharply from 5.5 cents reported for the 2019 fiscal year, but nothing could be further from the truth. The directors’ report accompanying the June quarterly results is just inadequate, as it does not clearly communicate what investors can expect for the rest of the year. There is just very limited historical information to go by to help.
The company posted positive results for the June quarter, with profit jumping 109 percent from $175 million to $366 million with modest foreign exchange gains, resulting in earnings per share of 3.3 cents. IC Insider.com’s computation puts full year’s earnings at 7 cents for the year assuming revenues grow 6 percent for the year.
Revenues rose 6 percent to $833 million for the quarter with gross profit rising from $606 million to $641 million. Other income comprising $34 million in foreign exchange gains moved from $60 million to $68 million. Importantly, finance cost fell sharply from $358 million to $147 million while administrative expenses edged slightly higher to $79 million from $78 million. The data is showing revenues in the first quarter of 2018 as 32 percent of the full year’s earnings. The next three quarters earned 68 percent or an average of 22.5 percent. If the similar development takes place this year, then earnings in the balance of the year will be just above that for the first quarter, as fixed costs will reduce quarterly profit considerably from that reported in the first quarter.
Going forward, there will be added cost ongoing cost associated with the listing, including listing fees, registrar services for the more than 31,000 shareholders, production of the annual report and annual general meeting as well as additional staffing.
Directors have a responsibility to communicate critical information to investors so that they can properly interpret the financial information presented and not having to guess exactly what is placed before them.
Jamaica’s Ministry of Finance newest office building
The Wigton’s June quarterly report falls far short of what is expected of a company of its size and with so many shareholders. The quarterly shows that production of energy grew 2.9 percent to 55,331,319 KWH but the directors stated that they expect to produce 169 Giga Watt Hours the average over the past three years. There is no mention of how the first quarter’s production, relates to the full year’s output. There is no mention of seasonality in the report. In fact, a review of the prospectus provides no information about seasonality, a critical bit of information that is missing. “If the company’s business is highly seasonal, IAS 34 encourages disclosure of financial information for the latest 12 months, and comparative information for the prior 12-month period, in addition to the interim period financial statements. [IAS 34.21]”
The shocking discovery is the composition of directors and shareholders of the company. People in authority should avoid conflicts of interest. The big question is, on what basis was the Wigton’s prospectus approved with a board member of the Financial Services Commission shown as a director of the company and subsequently a shareholder? Judges cannot oversee cases involving themselves, to do so, would be a huge conflict.
At the close of trading, Wigton Windfarm ended trading at a 52 weeks’ closing high of $1 and Stanley Motta at $6.15.
Proven Investments rose $1 in trading 7,230 at $41, Sagicor Group jumped $2.20 in trading 392,582 shares to close at $76, Scotia Group climbed $1.99 to $56 with 25,966 shares changing hands, Seprod lost 39 cents in trading 1,562,565 shares at $51.60, Stanley Motta gained 65 cents in closing at an all-time high of $6.15 while swapping 242,427 stock units. Supreme Ventures rose $1 to close at $28 with an exchange of 250,878 shares, Sygnus Credit Investments fell $1 in trading 130,773 units to close at $23 and Wisynco Group climbed 50 cents to settle at $25.50 with 8,210,330 shares changing hands.
NCB Financial lost $4 trading 44,927 shares to close at $210, PanJam Investment ended with a loss of $1 at $105 with 150,865 stock units changing hands, Pulse Investments ended trading with 50,000 shares and rose 60 cents to end at $3.60. Scotia Group climbed $1.01 to $54.01 with 68,815 shares changing hands, Supreme Ventures ended with a loss of $1 at $27 with an exchange of 138,518 shares, Sygnus Credit fell 50 cents in trading of 105,993 units to close at $24 and Wisynco Group climbed $1.50 to settle at $25 with 1,050,510 shares changing hands.
The main market of the Jamaica Stock Exchange failed to benefit from the improved profit results reported by companies ahead of trading, as the market pulled back with the heavily weighted NCB Financial falling $4 along with large declines by others that had reported results days earlier. 
Sagicor Select Fund followed with 102 million shares accounting for 45 percent of the day’s trade and 
NCB Financial lost $4 in exchanging 234,263 units to close $214. PanJam Investment added $5 in trading of 343,829 units at $106, Pulse Investments fell 70 cents in exchanging 463,377 shares at $3, Sagicor Group closed trading of 277,884 units but declined $1 to end at $74. Scotia Group dropped $1 to close at $53 in trading of 266,479 units, Seprod dipped $3 in trading 94,787 shares to end at $52, Sygnus Credit Investments rose 95 cents in trading 66,430 shares to end at $24.50 and Wisynco Group fell 50 cents to $23.50 after exchanging 311,397 units.
Palace Amusement traded just 100 shares and jumped $450 to close at a record high of $1,950, PanJam Investment added $1 in trading of 379,101 units at $101, Portland JSX recovered the 35 cents lost on Monday in exchanging 29,385 shares at $7.90, Proven Investments closed trading of 37,487 units and gained $3 to end at $40. Scotia Group dropped $2.60 to close at $54 in trading of 1,556,853 units, Seprod dipped $1 in trading 17,941 shares to end at $55, Sygnus Credit Investments lost 40 cents in trading 650,915 shares to end at $23.55 and Wisynco Group jumped $4.08 to $24 after exchanging 279,826 units.
The focus this week is the entire Junior Market that remains severely undervalued, notwithstanding that it made up much-lost grounds in the past week. The Lab is the first stock to watch from this sector.
In 2018, first-quarter results were released on the 17 of July. 
Initial public offers have been extremely popular amongst investors who have made good money from the vast majority of them. Come this summer investors will get five more opportunities to invest in IPOS.
