Traffic returning to Highway2000

Toll transactions for the first two months of 2020 were increased 2.1 percent increase over to the same period last year at Trans Jamaican Highway, the company reports in a news release to stakeholders.
The impact of national measures taken to limit the spread of the Coronavirus weighed on motorway traffic since mid-March 2020. “The decrease in traffic for March was 19.3 percent following the closure of schools, all-island curfews and the ‘work from home’ order issued by the Government of Jamaica for non-essential workers,” the release stated. According to the company, April, “saw a significant decrease of 52 percent when compared with April 2019, due to additional measures introduced such as the lockdown of the parish of St Catherine, which started on April 15.”
“The end of this confinement on May 1, was immediately followed by an increase in traffic on the motorway, as the decline fell to 34.2 percent when compared to May 2019. The trend being observed thus far for June 2020 is down 20 percent compared to the previous year,” the statement continued to say. The company estimates that the overall decline for the first semester of 2020 will be close to 20 percent.
“It is to be noted that the initial forecasts for 2020 showed traffic growth of around 1 percent compared to 2019 where the number of transactions were 24.2 million (66,223 vehicles per day)”, the statement concluded.
The company’s stock is listed on the Jamaica Stock Exchange and closed trading on Tuesday at $1.33 on the Main Market, down from the IPO price of $1.41.

QWI recovers 26% of lost value

QWI Investments‘ net asset value (NAV) per share surpassed the $1 mark again in hitting $1.01 per share at the close of the markets on Thursday. The NAV is up 26 percent from the lows reached in March.
The share price tumbled over the past month with the fall in the overall market, in sympathy with the fall in the net asset value per share to a low of 80 cents on March 20 but recovered some lost ground to close on April 3, at 93 cents per share. The stock traded on the Jamaica Stock Exchange as low as 63 cents on March 10 with that price proving to be a bottom so far. The price moved upwards to close on Thursday at 83 cents for a rise of almost 32 percent since the low in March.
The Company’s investment portfolio is invested in stocks that are listed on the Jamaica Stock Exchange, USA stock exchanges, with a few stocks that are listed on the Trinidad and Tobago Stock Exchange.
The local stock market has seen a V-shaped recovery over the past three weeks, and if this continues into the fourth week, it could result in more gains in the NAV for the Company. The stock is listed on the Main Market of the Jamaica Stock Exchange.

Sweet River delisted from Junior Market

Sweet River Abattoir and Supplies became the first Junior Market company to have its shares delisted from the Junior Market of the Jamaica Stock Exchange.
The delisting is effective on Monday, February 10, 2020. According to the Jamaica Stock Exchange, “the delisting is in accordance with Junior Market Rule 505 (14) (a) (i) and the Company’s failure to remedy Board Level and financial requirements breaches.
Sweet River was listed in2014 and the shares were undersubscribed, leaving the company short of critical working capital to function properly, as it embarked on building out a new abattoir. The targeted in the IPO was to raise $180 million from the sale of 46.6 million shares to the public, but subscribers only applied for approximately 30.6 million shares amounting to $118 million. Recently, the company’s land and buildings were auctioned off and acquired by the purchaser for far less than the more than $300 million they are recorded on the books.
Sweat River ran up losses of $124 million up to June 2019, according to the last interim report the company released to the JSE and had a net worth of just $19 million.

MPC Clean Energy hits $275

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MPC Caribbean Clean Energy (MPCL) stock traded at a record $275 on the Jamaica Stock Exchange on Monday as investors position to take advantage of a rights issue of 22,848,320 class B shares to be offered by the company.
The listed shares were priced at J$130 or US$1 when it came to the market in late 2018. The proposed new shares will be by way of a renounceable issue at J$140 to Jamaican shareholders and US$1 per share for shareholders in Trinidad and Tobago with a record date of November 8 as the Company seeks to raise the equivalent of US$22,848,320 from its shareholders.
The company went to the market in November 2018 to sell up to 50 million shares but the take up fell well short with the capital with just 11.25 million units with Jamaican taking up over 77 percent of the issue and Caribbean Clean Energy Feeder Ltd taking up 18.4 percent.
MPCL has 34.4 percent interest in the Paradise Park project that comprises a 50 MWP solar PV plant in Westmoreland in Jamaica that comprises a total investment of approximately US$64 million.
The second seed asset Tilawind is a 21 MW onshore wind farm based in Costa Rica in which MPC effectively holds 50 percent with the other half owned by ANSA McAL Group a Trinidad and Tobago group the total investment in that operation is approximately US$50 million. The wind park has been in operation since March 2015.
According to the company, a further 14 projects have been prioritized and form the indicative deal pipeline for the Investment Company. These require a total investment estimated at US$499 million to deliver up to 314 MW of new renewable energy capacity. The listed company invests in MPC Caribbean Clean Energy LLC who in turn invest directly the operating projects.
The company posted earnings for the nine months to September that reverses the positives number in the June Quarter. The results released are confusing, lacks transparency and will not help the company in raising the desired capital.
According to management, they have investments in two power-generating operations, with both in operation for the September quarter and generated share in profits of associated companies of $56,788. With just one-quarter of operation before from one location, they enjoyed a share in the profit of associate of $145 million in that quarter. The management report states that production at the Costa Rican operation generated 9.4 percent more energy than in the prior year. The numbers just do not seem to add up and management did not provide an explanation as to the reason why in their quarterly report. While the company is reporting total share of profit of $205,858 and a loss of $45,749 for the nine months period, the results from operations look vastly worse. The company reported a loss of $109,523 for the September quarter but advertising cost of $87,020 was the major cause of the big loss.
Regardless of what has been achieved to date, the performance is well off from the projections in the prospectus with a projected income of US$1.39 million and profit of $1.25 million for 2019 and projected revenues of US$2.94 million in 2020 with a profit of US$2.76 million.

$45 for Barita Investments rights

Barita Investments headquarters

Barita Investments will offer 116,845,955 ordinary shares to its ordinary stockholders by way of a renounceable rights issue of 11 shares for each 100 own as of August 20.
The exercise price will be $45 per share with the last date for renunciation will be September 10. Shareholders will have up to September 15, to accept the amount of their offer but can apply for additional shares from amounts not taken up by allottees, up to September 20.
The current offer is the second rights issue to purchase additional shares in the company, in less than a year. The stock traded on the Jamaica Stock Exchange on Friday to close at $91.50, for a rise of 72 percent for the year to date. but it has gained 862 percent in the last twelve months, not including gains from the issue of rights in March.

Sunshine Palace opens tomorrow

Palace Amusement latest cinema house – Sunshine Palace, opens its doors tomorrow Wednesday, July 24 to moviegoers in the Portmore community.
IC was informed, that the opening is highly anticipated by persons in the community. Sunshine Palace is located at 7 Braeton Parkway in the prime commercial district in Portmore area.
Sunshine Palace is said to boast silver screens, improved legroom, reclining seats, VIP service, improved concession stands, and laser projection that creates a brighter light for picture and is also environmentally friendly.
The Disney blockbuster, The Lion King, featuring Beyonce, Donald Glover, Chiwetel Ejiofor and James Earl Jones, will be integrally tied to the history of Sunshine Palace as it will be the opening movie that will be the showcase event of the season.
Sunshine Palace comprises 4 movie auditoriums with seating for 674 patrons.

Blue Power to split in two

Blue Power will split into two separate companies, the directors of the group decided on, to enhance prospects for growth of the two divisions.
The “Board of Directors considered the issue of growth of the two divisions of the Company and has reached the conclusion that having the Lumber Depot Division operate as a separate company will enhance its prospects for growth through acquisitions of and or mergers with other companies in related lines of business. The same considerations would apply to the growth of the Blue Power Soap division.”
In order to effect this move, an Extraordinary General Meeting will be held following the Annual General Meeting on August 14, to consider the matter.
Shareholders will be asked approve the issue or transfer of shares in a newly created subsidiary, Lumber Depot Limited, to the group’s shareholders on record as at August 1, with the intent that after such actions, shares in New Lumber Depot shall be held by the shareholders of the group in proportion to their existing holdings..
Blue Power shareholders will also vote to transfer the business, assets and relevant liabilities of the Lumber Depot Division to the new Company.
The directors approved the payment of a dividend of 2 cents per share on August 12. The record date is July 25 and the ex-dividend date, August 9, 2019.
The last audited financial statements, show the Lumber shop division with sales to April this year of $1.197 billion and profit of $74 million, while the Soap division recorded sales of $469 million and profit of $85 million. In the previous year, the Lumber division recorded sales of $1.07 billion and profit of $62 million and the Soap division had sales of $440 million and profit of $53 million.
The assets of the Lumber shop amounts to $222 million at the end of April with liabilities of $54 million. The soap division had assets of $761 million and liabilities of just $31 million.
The two divisions are involved in two completely different business with little synergies. The two companies should have their own management and boards, suited to move the separate companies to much higher levels of operations and profits.
The stock last traded at $6 on the Junior Market of the Jamaica Stock Exchange on Thursday.

Elite Drax Hall opens August

Word reaching IC is that the third branch of Elite Diagnostic is set to open by the beginning of August.
Earlier this week, IC sited the new building that is substantially complete and seems ready to welcome patrons. Elite had purchase of MRI machine from early in 2018 and had it store for installation at this location.
The new location is expected to carry a smaller staff compliment that the two in Kingston. The new location will be a drag on earnings for the company until it gets up to speed, but the cost will be less than for the second location.
At the 2018 annual general meeting, the directors indicated that the cost to set up St Ann Bay is in the region of $20-22 million plus U$375,000 for the MRI machine.
The company bought the MRI equipment early because it became available locally, but it comes at a cost as it was being stored with rental and electricity cost incurred to maintain it at a cool temperature. While the company has 3 other MRI competitors in Kingston, there will be no immediate competitor within 50 miles in St Ann. Operating cost at this location will less than at Liguanea with the former being staffed by 7 employees versus a planned staffing of 4 or 5 for St Ann.

Drax Hall branch of Elite nearing completion.

Elite reported net profit for the December 2018 quarter of $5 million compared to $1 million for the same period a year ago. Net profit for the 6 months was $6.8 million, down from $12 million for the same period in 2017. Revenues rose strongly to $97 million in the second quarter compared to $72 million for the 2017 period. For the six months to December, revenues rose to $182 million compared with $142 million for the year ago period. The stock traded at $4.80 on the Junior Market on Tuesday, with PE ratio of 7.5 based on estimated 2020 earnings of 65 cents per share.

Watch Barita with a new rights issue

Barita eyeing acquisition.

Barita Investments is planning another rights issue to raise new capital that is being earmarked IC gathers to fund a major expansion.
A Directors meeting is set for Thursday, July 11, at which they will consider the recommendation of a rights issue to the company’s ordinary stockholders.
IC gathers that the issue will be fully underwritten but will likely be renounceable which means shareholders will be able to sell their rights if they want to.  The terms and conditions are likely to be approved at an extraordinary meeting of shareholders to be convened by August.
The price has not yet been set but there is a view that it will be at about around 30 percent to the then market price. There are views suggesting that the nine months’ earnings are likely to be boosted by a sharp bounce in the company’s investment portfolio, courtesy of a booming stock market, increased fee income and a rise in fees from a growing unit trust portfolio that is benefitting from the buoyant stock market and pulling in new investors. Strong gains from investment banking activities are said to be major factors driving revenues and profit, the result of several deals that were finalized during the June quarter. IC also gathers that foreign exchange trading has also ballooned and brought in much more income than previously.

Barita Investments headquarters

Importantly, our source is suggesting is that the rights issue that should bring in around $4 billion in fresh capital is primarily targeted to fund an acquisition that have Caribbean while locations and will make a big impact on profitability when fully integrated into the existing structure, if the deal goes through. IC had projected the earnings for 2019 at $3 per share> With the consolidated of operations and acceleration in earnings that seems to be taking place starting with the second quarter earnings for the full year is most likely to exceed the above forecast handily. If that happens then the stock could be trading in the $60 region before too long after the third quarter numbers are released later this month.
The third quarter report shows total assets jumping to $27.7 billion from $16 billion at the end of March 2018 with equity capital at $7.8 million up from just $2.9 billion at the end of March 2018. Revenues net of interest expense more than doubled in the March 2019 quarter to $770 million from $329 in 2018 and profit rising to $408 million for the quarter compared to just $88 million in the 2018 quarter.  For the half year net revenues grew to $1.16 billion from $490 million in 2018 and profit rose to $517 million from $49 million.

Jamaica Producer’s appetite for acquisitions

Jamaica Producers sale of 30 percent of JP Snacks Caribbean, for  $720 million add to the group’s cash pile for the Group bringing it to just over $6 billion.
The total amount of financial resources provide good ammunition to undertake a sizeable acquisition, locally or overseas.
In an exclusive interview with Jamaica Producers’ Managing director, Jeffrey Hall, IC gleaned that the group has a number of plans under its belt. Hall stated that all their businesses are doing well, but The Group is looking growth opportunities in infrastructure and Manufacturing. The low cost of and abundance of local capital is opening up possibilities for local businesses not seen for a long time, Hall stated. However, the group is not about to take on just about any business.
Tortuga International Holdings Company 62 percent subsidiary of Jamaica Producers is one such acquisition the group did a few years ago. The company manufactures the rum cake for sale with the main target being the overseas residents. The company produces rum cake in Jamaica for all the markets except Cayman suffered a fall in revenues in 2018. Tortuga International had revenues of $879 million in 2018, down from $907 million in 2017, according to the group’s audited accounts. Hall attributes the decline to the effects that hurricanes in the region on tourism traffic to some countries within the region.
“Tortuga will launch Mamajuana Rum Cake in the Dominican Republic in the second quarter of 2019 and Vanilla Rum Cake un Mexico in the third quarter of the year Hall told IC  
Producers delivered $816 million profit for shareholders of the group up from $662 million in 2017 from a 21 percent increase in revenues to $19.6 billion compared to $16.2 billion in 2017, at the same time gross profit rose below the increase in revenues at 16.4 percent. Segment results show JP Foods and Drinks division revenues rising 29 percent to $11.3 billion from $8.8 billion in 2017 and delivered segment profit that rose 36 percent to $378 million while the logistic segment comprising mainly Kingston Wharves grew revenues 11 percent to $8.3 billion for a 26 percent rise in profit $2.7 billion.