Friday, June 20, 2008

Mayberry shareholders demand bigger dividend payout

Published: Friday June 20, 2008

Mayberry shareholders are looking for dividend distributions of at least 30 cents per share based on fees earned from the Angostura buyout of Lascelles de Mercado. As the lead broker for the largest acquisition in Jamaica's history, Mayberry earned substantial fees and capital gains which sent its first quarter 2008 earnings to record highs of J$630 million from J$58 million earned in the first quarter of 2007.

"We understand that you want to see increasing dividends," Gary Peart, Mayberry's chief executive officer explained to shareholders, "in fact, we have gotten calls for an interim dividend payout. However, we have to look long term. Our business is very volatile and the outlook can change rapidly.

We will wait until the end of the year and we will make our distribution then as usual."

Over the past two fiscal years, Mayberry shareholders have seen the dividend payout increase by 100 per cent from 10 cents per share to 20 cents per share. Peart stated that Mayberry has one of the highest dividend distribution on the Jamaica Stock Exchange. "While 10 cents and 20 cents might not seem like a lot a money, this represents payout of $120 million in 2006 and $240 million in 2007. Our net profits in 2007 was $372 million and so we paid out over 60 per cent of our profits. There are only a handful of listed firms that do so."

Peart noted that instead of making a large payout, Mayberry is actually looking to deploy the proceeds of the Lascelles transaction into another investment. While he would not give details, Peart stated, "We believe that with our expertise and research capabilities we will be able to find such an investment that will give the same type of returns earned by Lascelles in another three to five years." Peart and Mayberry chairman, Christopher Berry, noted that the country faced a number of challenges which impact the firms. Berry told shareholders, "The challenges of crime and inflation is bad for the economy and especially the tourism industry. The rising nature of these threats point to the economy slowing down." Peart explained further, "While we are bullish on Jamaica, we are patient investors. So although crime and inflation are real threats to economic stability, we believe that there are opportunities out there. And so we will hold our capital until the time is right."

Berry informed shareholders that the ideal acquisition is a firm that, "maintain their cash flow going forward and are conservative."

Peart noted that the company has diversified its core business in line with regulatory requirements. "The regulators define the core business of a securities dealer as trading, not net interest income. Therefore the message is that a securities firm must generate over 50 per cent of income from trading and we at Mayberry earn over 60 per cent - one of the highest ratios in the market." On the strength of its trading abilities, the firm earned the JSE distinction as number one in volume, value and number of transactions for 2007 and year to date, 2008. "We don't start the year aiming to be number one in anything, we actually try to increase quality of relationship with our clients, and so becoming number one is just a consequence of that relationship."

Beyond the profits earned by the company, Peart focused much of his presentation on the firm's corporate social responsibilities. "Over the years, we have done a lot of work with various schools and charitable organizations and we have taken a decision to formalize the effort." Peart announced to shareholders that Mayberry's marketing manager, Kayree Berry-Teape has been appointed to the post of Chief Executive Officer of the Mayberry Foundation.

Speaking to the Observer yesterday, Berry-Teape outlined the vision of the Foundation. "The whole aim of the Mayberry Foundation is not to do one off projects, but projects with a lasting effect." She explained, "I feel strongly that while we need to assist persons, it is very important not to give for giving sake but to make a difference. For example, the Foundation will embark on long term benefits such as reading rooms and computer labs which facilitate e-learning that then becomes a resource room."

Among the many projects that the brokerage house is involved in, Berry-Teape highlighted the relationship with Naggo Head Primary. "Last year we gave 10 scholarships to children who passed for Campion with grades above 90. These children are the assets of our country and we must ensure that they have the best educational opportunities."

Source: Jamaica Observer

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