Wigton Windfarm’s profit upgraded

April 10, 2019 by

Wigton IPO propectus is out.

Net profit for the nine months to December 2018 for Wigton ended at J$730 million compared to $1 billion reported in 2017 before taxation.
IC Insider.com now projects normalized earnings for the 2019 fiscal year between $600-700 million resulting in earnings per share of 6 cents. As earnings for the above periods, include foreign exchange gains and losses. Included in other income is $552 million to December 2018 of foreign exchange gains and in Finance cost, $748 million, in foreign exchange losses. With the company repaying the foreign currency loans, the main source of foreign exchange gains or losses no longer exits, hence the need to normalize results without them.
Based on the updated earnings, with the price of the stock at 50 cents each, the PE ratio is now
8.5, valuing the company at just $5.5 billion. The stock now sits at number 4 on IC Insider.com TOP 10 main market stocks, making it more attractive than the value based on the projection to March this year, included in the public bodies’ document.
“Wigton Windfarm IPO out very soon” an article published last week is running at the number one best read article on IC Insider.com and represents a clear sign of the popularity of the issue that opens on April 17.
IC Insider has now updated certain aspect of a second article, Wigton Windfarm IPO prospectus is out, carrying a more detailed look at the offer, and is proving to be quite popular but running well behind the first one currently.The lead broker for the IPO is Mayberry Investments.

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Wigton Windfarm IPO prospectus is out

April 8, 2019 by

The long awaited prospectus for Wigton Windfarm is now available to the public, with an offer of 11 billion shares priced at 50 cents each. The offer will officially open on April 17 and scheduled to close at 4.30 pm on May 1.   
The company’s net energy output can only be sold to Jamaica Public Services Company, the country sole marketing entity, supplying energy to consumers. According to the government’s public bodies accounting records, the company projects profit of $587 million to the end of March this year, down from $826 million earned in 2018, helped by other income of $637 million versus just $52 million in 2018. The company generated sales revenue of $2.5 billion in 2019 and $2.36 in 2018. The annual growth in profit before finance cost is minimal grew just over 11 percent in 2015 and 2016 and a much slower 7 percent in 2017 and 2018, with a 6 percent decline in 2019.

Wigton IPO propectus is out.

In the nine months to December 2018 sales revenue was $1.95 billion compared to J$1.91 billion in the prior comparable period in 2017. Cost of Sales closed at J$544 million compared to J$535 million in the nine-month period for 2017. Gross Profit ended at J$1.4 billion compared to J$1.38 billion in 2017. Net profit for the nine months to December 2018 ended at J$730 million compared to J$1 billion reported in 2017.
Earnings for these periods, include foreign exchange gains and losses. With the company repaying the foreign currency loans, the main source of foreign exchange gains or losses no longer exits, hence the need to normalize results without them. IC Insider.com projects normalized earnings for the 2019 fiscal year between $600-700 million, resulting in earnings per share of 6 cents.
The company is heavily indebted with $6.3 billion of borrowed funds carrying interest rates of 6.65 percent to 8.4 percent with an average rate of just under 8 percent. Cash funds on hand amounts to $1.4 billion and equity of $2.4 billion. Current assets exclusive cash and payables are minimal. The company had borrowed most of it loans in US dollars, resulted in annual swings in net profit as the

Mayberry Investments is the lead broker.

exchange rate of the Jamaican dollar moved up and down. Loans in US dollars were paid off and the company raised Jamaican dollar funds, in preparation for the initial public offer.
The company’s generating capacity is 63 mega-watts. Wigton I Power Interchange Agreement expires in April 2024 and accounts for up to 20MW, Wigton II Power Purchase Agreement expires, December 2030 to supply up to 18MW and Wigton III Power Purchase Agreement ends in March 2036 for up to 24MW.
The price of the stock results in a PE ratio of just under 8.5, the company would be valued at just under $5.5 billion and sits at number 4 on IC Insider.com top 10 stocks. The big question that should be on investors minds, when will meaningful growth in revenues and profits come to justify holding the shares beyound what may well be an initial bounce.
The company directors are; Oliver Holmes, B.Sc., M.Sc. (Acct.) Non-Executive Chairman, Nigel B. Davy, B.T., J.P. Non-Executive Director, M. Georgia Gibson-Henlin, Q.C., B.A. LL.B. LL.M., F.C.I. Arb. Non-executive Director Hugh Johnson, Non-executive Director Gregory Shirley, B.A., M.B.A. Non-executive Director, Jacqueline Stewart-Lechler, J.P. Non-executive Director.

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Up to $50m loan to buy Wigton shares

April 8, 2019 by

NCB Capital Markets will be providing investors up $50m in margin funding to assit with buying of Wigton’s shares in the IPO.

Investors in Wigton Windfarm initial public offer of shares will be able to access up $50 million in loan financing from NCB Capital Markets (NCBCM) to fund up to 50 percent of the purchase, NCBCM’s CEO Steven Gooden informed IC Insider.com.
The Wigton IPO, is generating lots of interest, amongst Jamaicans, residing locally and overseas and should pull in around $6 billion before expenses for the sellers, PetroJam. It will be one of the larger issues, to hit the Jamaican capital market.
In addition to providing margin funding to assist in purchasing the new IPO issue, NCBCM online portal, dubbed ‘GoIPO’ and created in conjunction with the Jamaica Central Securities Depository , will be available for their investors to use in making application for the shares. The application will allow investors with accounts at NCBCM, to easily fill out application forms as the system will automatically populate the form with the other information for persons with login access codes.
The GoIPO was born out of the major challenges that NCB encountered when they brokered the Wisynco IPO.
Investors with login codes can use them to access NCB system and access accounts that will fund the application. The system will be show the Wigton IPO application from which the appropriate application form is to be fill out. The required information will be the sum being invested. The system will compute the number of shares being applied for and the applicant will identify the account that the funds will come from.

Wigton IPO with propectus expected in a day or two.

Persons having no login code will have go online and fill in name, JSCD account number and TRN and enter the sum they are investing and method of payment as well as upload a photo ID to go with the application.
The new system will eliminate the need to visit a locations to deliver applications and significantly reduce errors associated with manual processing.
Of the GoIPO solution, platform is encrypted, providing security and confidentiality to users, who can access the digital portal once they have a JCSD number. Gooden said, too, that as selling agents of the IPO, NCBCM possesses the largest distribution channel within the broker space and clients who do not wish to apply digitally are encouraged to complete and return their forms to NCBCM locations islandwide.
NCBCM say that investors can apply through the NCB system to apply for shares to go into other brokerage accounts.

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Cement still top stock to watch

April 8, 2019 by

Caribbean Cement traded at a new high of $73.90 recently.


Jamaican stocks continue to consolidate as they await some major price moving events to change direction. During the past week, Caribbean Cement make a gallant move to break out but selling pushed the price back to close at $60.61, after posting a high of $73.90. On Friday, it traded at $66 but sellers pushed it back lower by the close. 
Buying interest remains good for Carib Cement while selling seems a bit muted. With first quarter results due by the last week in April, investors could be positioning to get ahead of those results, expected to be well ahead of the 2018 profit. The stock could close higher during the week based on demand and supply.
Earlier in last week, NCB Financial looked as if it was going to move back to the $150 range with no offers below $150 for an extended period of trading. That never lasted as sellers entered, keeping the price in the $145 range. Other main market stocks to watch include, Barita Investments, Berger Paints, Jamaica Producers, Radio Jamaica and Wisynco Group that has some selling around the $12 level and my take some more time to move higher.
While there are stocks that are pregnant with possibility to move, the sideways movement of the market, seems set to continue this coming week. The situation will be made worse, with the pending Wigton Windfarm IPO, that should be coming the market this week, and will suck up approximately $6 billion, at around 50 cents per share.

Wigton IPO with propectus expected in a day or two could pressure existing stock prices.

The Junior Market is currently, supported by two major technical indicators, indicating a rising market ahead. One is a triple bottom that it is bouncing off and the other a triangle formation, both indicate a big breakout. The last time the market had a triple bottom was between March and July last year and the market gained more than 500 points after.
Junior Market stocks to watch this week and beyond include, Caribbean Cream with full year results due towards the end of April that could help the stock. Caribbean Producers supported by technical indicator suggesting a higher price down the road. General Accident currently at a PE of 15 times 2018 earnings but well below likely 2019 earnings. Investors continue to demand Elite Diagnostic stock at $3.20 or lower with sellers mostly wanting close to $3.50. Honey Bun is showing all the signs of moving higher. Fontana remains fluid at $4 level. Express Catering that will benefit from the double-digit upsurge in Tourist arrivals so far in 2019. Lasco Manufacturing was in the news with expansion of the storage facilities to accommodate increased production, the stock gained last week and could record further gains this coming week, regardless it one worth watch for longer term gains.

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Wigton Windfarm IPO out very soon

April 1, 2019 by

Report reaching IC Insider.com is that the long awaited prospectus for Wigton Windfarm is due this week. The stock is set to come to the market at 50 cents each.
According to the government’s public bodies accounting records, “the divestment will be by way of listing PCJ’s 100 percent shareholding in WWFL on the Jamaica Stock Exchange.” The company is expected to report profit of $587 million to the end of March this year, down from $826 million earned in 2018. The 2018 earnings were helped by other income of $637 million versus just $52 million in 2018.
The company generated sales revenue of $2.5 billion in 2019 and $2.36 billion in 2018. Depreciation charge is high at nearly $700 million, this will result in a healthy cash flow per annum, allowing to either pay down debt or fund expansion from internally generated resourses and provide a basis of growing profits going forward.
The annual growth in profit before finance cost is minimal, growing just over 11 percent in 2015 and 2016 and a much slower 7 percent in 2017 and 2018, with a 6 percent decline in 2019.
The company is heavily indebted with $7 billion of borrowed funds, $1.4 billion in cash funds on hand and equity of $2.4 billion. Current assets exclusive of cash and payables are minimal. Borrowed funds were mostly in US dollars and resulted in annual swings in net profit, as the exchange rate of the Jamaican dollar moved up and down against the United States dollar. Loans that were previously denominated in US dollars, were swapped for Jamaican dollar funds, in preparation for the initial public offer.
The company’s generating capacity is 63 mega-watts with the output contracted to Jamiaca Public Seervice Company. Assuming a PE ratio of 10, the company would be valued at just under $6 billion.

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