Trans Jamaica & Wigton can’t compute EPS

This is proving to be very embarrassing; accountants unable to compute earnings per share (EPS) properly for companies issuing additional shares. A number of listed companies have been releasing quarterly and audited results with the wrong calculations for earnings per share.
Trans Jamaica, the latest company, to be divested by the Government of Jamaica, reported a profit for the quarter to March of US$2.27 million but only the application of a tax credit of US$3.77 million saved it from a loss for the quarter. Revenues for the quarter were $12.96 million, up from $12.79 million in 2019, but after incurring $5.6 million in interest cost they ended with a pretax loss of US$1.5 million. In the 2019 March quarter, they barely eked out a profit of $1.58 million but that was only after crediting US$1.234 million in shareholders’ grant that ended at the end of 2019. The company’s reported EPS are all wrong.
Interestingly, Trans Jamaica’s top 10 shareholdings, make for interesting reading. Others are NROCC with 2.5 billion shares and JMMB Group with 763 million units, NCB Group and connected entities dominate the top 10. Interestingly, the National Investment Fund, which acquired a large portion of Wigton Windfarm shares, is nowhere on the top 100 listings for Trans Jamaica shareholders.
For the December quarter, Wigton Windfarm reported the earnings per share for the December 2018 quarter as $56,701. That, of course, is completely incorrect.

Wigton closed at anew high of $1

Wigton posted a loss in the December 2019 quarter.

The company stated in the quarterly, “the average number of shares was 10,000 units”, and at the same time, they stated that 10,999,990,000 shares were added, in May 2019. In reality, no shares were added as the existing stocks were split to become 11 billion units. This is what the prospectus stated, “in anticipation of this Offer for Sale PCJ as sole shareholder adopted the following resolution in writing on April 3, 2019, with respect to the Company; namely (a) sub-dividing the Company’s 10,000 ordinary shares into 11,000,000,000 ordinary shares.”  That change required that 2018 and all prior years’ earnings, must use 11 billion shares to compute the company’s earnings per share. Wigton’s June to December quarterly reports published for 2019 are all incorrect and require revisions, as the incorrect information is still on the Jamaica Stock Exchange’s website.
The latest company to run foul-up this rule is Trans Jamaica Highway. The company, in its first report to the Jamaica Stock Exchange, reported EPS of 0.02 US cents for the March quarter, 5.8 US cents for the 2019 quarter and 30.7 cents for the year to December last year— all of which are incorrect. A note accompanying the share capital of the quarterly to March states. “On January 22, 2020, an extraordinary shareholders’ meeting passed a resolution to restructure the authorized share capital pursuant to section 65(1)(d) of the Companies Act, 2004, in anticipation of NROCC completing an initial public offering on the main market of the Jamaica Stock Exchange. Pursuant to this resolution, the Company’s share capital was restructured by dividing each of the 27 million existing ordinary shares to create 12.5 billion ordinary shares.”
As is the case for Wigton, the total number of shares now issued must be used to properly compute EPS for all three periods included in the quarterly report.
Limners and Bards, in releasing their audited accounts, made the same mistake that was quickly corrected after IC brought the matter to the public.

About IC