JMMB profit down slightly but…

JMMB sign at Knut BrnchJMMB Group posted a 14 percent fall in net profit compared to 2013, with profit after tax of J$1.85 billion. Earnings per share amounted to J$1.14 for the nine month period to December 2014, and $644 million after tax, for the December quarter or 40 cents per share, in line with the September quarter results of $651 million but just 8 percent below 2013. Operating expenses, however, rose by $220 million in the quarter above that of the September quarter, helping to keep profit down.
Earnings for the full fiscal year to March, should end around $1.60 per share, at a stock price of $7 and a PE of 3.5, the stock is undervalued. Profit before tax was higher for the latest quarter, a near $100 million increase in corporate tax provision resulted in net profit falling behind the December 2013 quarter. Operating revenues grew 18.1 percent over prior period, to J$7.8 billion, due mainly to acquisition of two subsidiaries and $2.8 billion for the quarter versus $2.45 billion for the December 2013 quarter.
JMMB_ibl_logoThe group’s Net Interest Income grew J$270 million or 7.1 percent year-over-year to J$4 billion. Management attributed the growth to “expanded business lines through the acquisition of Intercommercial Bank (IBL) in October 2013, coupled with effectively managing the group’s investment portfolio and cost of funds. Other operating revenues, namely, gains on securities trading, foreign exchange margins from cambio trading, and commission income also reflected increases of 25.2 percent, 78.5 percent and 30.7 percent respectively, these were driven largely by volume increases and taking advantage of market opportunities. Our operations in the Dominican Republic continue to produce positive results contributing J$508 million to the Group and IBL contributed J$162 million to the group’s earnings.”
Operating expenses increased from J$3.99 billion to J$5.45 billion. ”Expenses associated with the expansion of the group through the acquisition of IBL and AIC Securities accounted for J$796 million (54.6 percent) of this increase and the remaining J$662 (45.4 percent) is attributable to costs associated with integration, growth in subsidiaries in the regional markets, increase in asset tax and normal inflationary increases”, management advised shareholders.
One of the effects of the increase in operating costs was that the group’s efficiency ratio (administrative costs as a percentage of operating revenue) moved from 60.4 percent in 2013 to 69.9 percent. Management is taking medium to long-term measures to correct this increase, mainly through extracting synergies from its recent acquisitions through its integrated financial services model across regional territories, the company stated.
JMMB 12-14Concerns|Insider selling of the company’s stock has been high, raising concerns about the prospects going forward, with the likely impact on earnings that could arise with the restrictions being placed on repo trades that will see smaller amounts no longer acceptable to be booked directly by dealers. This change will affect margins on such funds, even if they are shifted to unit trust. The company made much income from foreign exchange trading which could be curtailed with what seems set to be greater stability in rate of the Jamaican dollar against the US dollar. IBL is operating in Trinidad where the economy is facing reduced income from the energy industry with the fall in the price of oil and gas, the country also is faced with high inflation, these developments are likely to see measures being implemented that could constrain business activities and so affect income and profits in the subsidiaries in that country.
Locally, Treasury bill rates have been falling since the first half of 2014 and seem set to decline some more, this can be both positive and negative, depending on the length of time, funds are placed on the asset and liabilities sides. Lower rates mean less income being earned by the company’s own funds, some investments will see an increase in values and greater activity in the stock market which can lead to more fee income as well as appreciation in any stock portfolio it may hold.
JMMB Group will replace shares in Jamaica Money Brokers shortly, and become the listed company. Shareholders of the group were paid 33 cents in dividend last year.

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Comments

  1. Garnett Weir says

    The JMMB has been treading water for a long time. When will they break out? Is it time for new management?

    • IC Insider.com says

      The performance of JMMB is due more to the market valuing the stock properly and to the absence of management providing investors with relevant information to allow them to understand what impact changes in the repo business will have on profits. With 2015 earnings looking like $1.60 per share the stock should have been priced higher. and by the way the heavy selling of insiders over the past two years have not helped.

Trackbacks

  1. […] over the profit of 2014 after asset tax of $398 million was fully expensed in the 2015 quarter. JMMB earned profit of $278 million and earnings per share of 36 cents for the quarter ended June, this […]

  2. […] JMMB Group has acquired ninety percent (90%) of the shares of Banco Ahorro y Credito Rio (Banco Rio) through the group’s Dominican Republic subsidiary, JMMB Holding Company Limited after obtaining regulatory approval for the acquisition, the group informed the Jamaica and Trinidad & Tobago Stock Exchanges today. Banco Rio is a savings and loans bank, in accordance with the Financial and Monetary Law of the Dominican Republic they are licenced to provide consumer loans; loans to small and medium enterprises (SMEs); commercial loans; credit lines; credit cards, cambio services; savings accounts and certificates of deposit. “This acquisition serves as another key step in JMMB’s strategy of building out an integrated financial services business model in the Dominican Republic (DR) market. In particular, for all current and prospective JMMB and Banco Rio clients in the DR, this acquisition will pave the way for them to access an even more diversified bundle of financial solutions (through banking and investments), that will serve to achieve their financial goals and objectives at every stage of their life,” states JMMB in its report. JMMB is a diversified financial group with operations in Jamaica, Trinidad and Tobago and the Dominican Republic. JMMB made revenues of $4.5 billion in the March 2015 quarter 13 percent ahead of the $3.96 billion generated in the 2014v period but was only able to report a disappointing $119 million in the quarter compared to $488 million in 2014. For the 2015 fiscal year revenues amounted to $18.46 billion or 17 percent ahead of that of 2014 of $15.75 billion. Increased cost which climbed much faster than revenues held profits down for the year but more so in the final quarter. JMMB shares trade on the Jamaica Stock Exchange, and was last quoted at $7.50, or just 6.4 times 2015 earnings. […]

  3. […] JMMB Group dominated trading with 9.9 million units valued at $74.5 million on Wednesday in activity on the Jamaica Stock Exchange but the stock price was up only moderately. In trading the prices of 14 stocks rose, 6 declined as 28 securities changed hands, ending in 13,740,198 units trading, valued at $109,298,383, with two new closing 52 weeks’ high, in all market segments but with Jamaica Broilers trading at a 52 weeks’ high during the day. TheJSE Market Index gained 661.40 points to 97,257.91, theJSE All Jamaican Composite index rose 739.27 points to close at 107,647.14 and the JSE combined index gained 659.28 points to end at 99,953.05. Stocks trading include, Caribbean Cement adding 800,705 shares to gain 40 cent to close at $5.40 for a new closing 52 weeks’ high, Desnoes & Geddes lost 40 cents to $7.60 with 7,235 shares trading, Hardware and Lumber traded 210,000 shares at $18 but the bid that was at $18 was moved down to $16, shortly the trade. Jamaica Broilers had 47,213 shares trading to close at $5.45 for a gain of 25 cents but traded earlier in the day at $6. JMMB Group traded 9,935,904 shares at $7.50, up from $7.41 on Tuesday, the shares were sold in 10 lots by JMMB Securities and all but 96,142 were purchased by NCB Capital Markets for clients. Mayberry traded 147,3000 shares at $2.88, National Commercial Bank trading only 4,777 shares as high as at $29.99 but closed at $29.45, Pan Jamaican Investment closed at a new 52 weeks’ high of $63.51 with only 5,000 shares but traded at $63.75 during the day. Sagicor Group in trading 1,773,139 shares, ended up 10 cents higher at $12.40 at the close. Sagicor Real Estate fund gained 30 cents in trading 23,151 units and closed at $8, Scotia Group ended with 61,864 shares at $23.11, Supreme Ventures had 59,656 shares trading at $3.70 at the end and Jamaica Money Market Brokers 8.75% preference share traded 143,000 units to lose 1 cent and close at $2.99. IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator shows 11 stocks with bids higher than their last selling prices and 5 with offers that were lower well down on the 19 bids and 7 offers on Tuesday. […]

  4. […] to close up by $3.57 to $29.85, Supreme Ventures enjoyed trading in 21,700 shares at $3.60 and Jamaica Money Market Brokers 7.50% preference share traded 113,120 units at $2.11 for a 19 cents […]

  5. […] lower at $3.55, National Commercial Bank contributing just 120 shares, 5 cents lower at $1.70 and JMMB Group with a volume of 100,000 shares being traded 3 cents lower, at 47 cents. Firm Trades| Stocks […]

  6. […] Investment Fund with 29,468 shares trading and advancing by 4 cents to end at $22.55. Declines| JMMB Group was the sole stock to decline by shedding 1 cent to close at 54 cents with 18,346 shares traded. […]

  7. […] a gain of 45 cents. Jamaica Stock Exchange ended with 607,587 units and lost 3 cents at $2.90, JMMB Group closed with 35,677 shares at $9.10, for a gain of 39 cents. Mayberry Investments had dealing in only […]

  8. […] $47.18, Grace Kennedy finished trading with 216,915 units and put on 41 cents to close at $64.01. JMMB Group concluded trading with just 10,465 shares and closed with a gain of 30 cents at a new 52 […]

  9. […] Scotia Group closed with 8,627 units and put on $2.26 to a new 52 weeks’ high of $25.49, Jamaica Money Market Brokers 7.50% preference share traded 140,900 units to end at $2.30 and Jamaica Money Market Brokers 8.75% […]

  10. […] to $60 with 6,550 shares, Sagicor Real Estate X Fund had a large trade of 873,309 units at $6.55,Jamaica Money Market Brokers 8.75% preference share traded 246,146 units at $3.20 after gaining 13 cents. Scotia Group traded […]

  11. […] increased by 0.09 points to close at 44.05. Gains| Stocks increasing in price at the close are, JMMB Group with 363,145 shares changing hands for a value of $163,428 to close 3 cents higher at 43 cents, […]

  12. […] closed at 90 cents higher at $63, Jamaica Broilers had 86,530 shares trading to close at $4.70, JMMB Group traded 855,593 ordinary shares for 38 cents higher at $7.48. The stock had JMMB Securities on the […]

  13. […] Stock Exchange (TTSE) website and trading data, leads to confusion as to the correct name of the JMMB Group Limited, the incorrect name was still being carried up to Friday in the trading summary, but based […]

  14. […] to end at $42, Grace Kennedy had 51,721 shares changing hands and lost $1.15, to end at $62.05, Jamaica Money Market Brokers 8.75% preference share traded 1,100,000 units at $3.10. Margaritaville (Turks) had 87,810 units […]