Published: Friday May 16, 2008
Scotia Group Jamaica, the number one banking group by capital base, will today roll out a half a billion dollar plan for a new branch that encapsulates its banking, investment and insurance services.
The company this week advised in a press notice that the new branch would cost $410 million to build, but has advised the Financial Gleaner that the total investment to be made will reach $586 million.
The other $176 million was invested in site preparation and infrastructure, the bank said ahead of last night's launch of the construction phase, which is expected to be finalised within a year.
Network growth
The branch, which should grow the group's network to 55, inclusive of Scotia DBG Investment offices islandwide, is to be constructed at Constant Spring Road, St Andrew on property that formerly housed a McDonald's fast food outlet.
Scotiabank in June 2006 acquired the property for US$1.56 million - then the equivalent of some $103 million.
The new branch will be built as a two-storey complex, with a red distinguishing tower similar to the Portmore branch.
The centre, measuring 16,976 square feet, is to house the wealth management arm of the company's operation comprising of the Scotia Private Clients Services, Scotia Jamaica Life Insurance Company (SJLIC) and Scotia DBG Investment office on the upper floor, while the banking branch will take up the ground floor.
The contractors are Tu-Stan Engineering Company Limited, while Hue Lyew Chin Engineers Limited have been hired as the structural engineers, Berkeley & Spence as quantity surveyors and Rivi Gardner, architectural services.
The mechanical and electrical engineers are Gartek Engineering Corporation, based in Miami.
Scotiabank expects to occupy the new building by April 2009.
Source:
Sabrina Gordon
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20080516/business/business7.html
sabrina.gordon@gleanerjm.com
Friday, May 16, 2008
Gleaner takes steps to improve ownership transparency
Published: Friday May 16, 2008
Gleaner Company shareholders yesterday approved an amendment to the company's rules that would give directors the right to demand the identities of hidden stockholders, but the change requires approval from the Jamaica Stock Exchange before it can be implemented.
Oliver Clarke, the media company's chairman and managing director, told shareholders that the proposed replacement of the Gleaner's Article 26 was in the context of the growing global demand for transparency and concern about issues such as money laundering and other forms of corporate criminality.
"We believe the company has a right to know who are the beneficial owners of the shareholding," Clarke told stockholders at The Gleaner's annual general meeting at the company's headquarters in Kingston.
"If you have people buying into the company, you have to know who they are."
The move is similar to a provision previously implemented by GraceKennedy Limited, whose chairman and CEO, Douglas Orane, also sits on The Gleaner's board.
Modelled approach
Yesterday, Orane sought to assuage sceptical shareholders and analysts, who were uneasy that the shift could lead to undue prying or weaken the capacity of deal-makers to take strategic stakes in firms.
The GraceKennedy boss explained that his firm had modelled its approach on what exists among the top 20 companies on the London Stock Exchange and said the change had had "no material impact on the liquidity of the GraceKennedy stock."
"If anything it has increased the liquidity," he said, in that the move had built confidence in shareholders.
Under the existing article 26, Gleaner directors can decline to register any transfer of shares, or suspend registration for up to 30 days in any single year.
But with the proposed replacement, they would have the authority to demand from proxies the identities of beneficial owners of shares held in their names, or to whom those shares have been passed on.
Forfeiture of dividends
Failure to provide the infor-mation could lead to the forfeiture of dividends or other payments related to those shares and the suspension of voting rights.
"At the end of the day, you are giving shareholders the confidence of knowing who their fellow shareholders are," Clarke told the meeting.
The Gleaner recorded profit in 2007 of $98 million, down from $274 million in the prior year, resulting from impairment losses associated with its United Kingdom operation and reduction in employee benefit asset. Trading profit improved by $120 million.
The meeting yesterday retired and re-elected to the board deputy managing director Christopher Barnes, Lisa Johnston, Joseph M. Matalon and Morin Seymour.
Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20080516/business/business3.html
business@gleanerjm.com
Gleaner Company shareholders yesterday approved an amendment to the company's rules that would give directors the right to demand the identities of hidden stockholders, but the change requires approval from the Jamaica Stock Exchange before it can be implemented.
Oliver Clarke, the media company's chairman and managing director, told shareholders that the proposed replacement of the Gleaner's Article 26 was in the context of the growing global demand for transparency and concern about issues such as money laundering and other forms of corporate criminality.
"We believe the company has a right to know who are the beneficial owners of the shareholding," Clarke told stockholders at The Gleaner's annual general meeting at the company's headquarters in Kingston.
"If you have people buying into the company, you have to know who they are."
The move is similar to a provision previously implemented by GraceKennedy Limited, whose chairman and CEO, Douglas Orane, also sits on The Gleaner's board.
Modelled approach
Yesterday, Orane sought to assuage sceptical shareholders and analysts, who were uneasy that the shift could lead to undue prying or weaken the capacity of deal-makers to take strategic stakes in firms.
The GraceKennedy boss explained that his firm had modelled its approach on what exists among the top 20 companies on the London Stock Exchange and said the change had had "no material impact on the liquidity of the GraceKennedy stock."
"If anything it has increased the liquidity," he said, in that the move had built confidence in shareholders.
Under the existing article 26, Gleaner directors can decline to register any transfer of shares, or suspend registration for up to 30 days in any single year.
But with the proposed replacement, they would have the authority to demand from proxies the identities of beneficial owners of shares held in their names, or to whom those shares have been passed on.
Forfeiture of dividends
Failure to provide the infor-mation could lead to the forfeiture of dividends or other payments related to those shares and the suspension of voting rights.
"At the end of the day, you are giving shareholders the confidence of knowing who their fellow shareholders are," Clarke told the meeting.
The Gleaner recorded profit in 2007 of $98 million, down from $274 million in the prior year, resulting from impairment losses associated with its United Kingdom operation and reduction in employee benefit asset. Trading profit improved by $120 million.
The meeting yesterday retired and re-elected to the board deputy managing director Christopher Barnes, Lisa Johnston, Joseph M. Matalon and Morin Seymour.
Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20080516/business/business3.html
business@gleanerjm.com
Wednesday, May 14, 2008
DB&G, Gov't deal was guided by procurement guidelines, says Bunting
Published: Wednesday May 14, 2008
Peter Bunting yesterday dismissed claims, made by Finance Minister Audley Shaw, of "sweetheart deals" that benefited Dehring Bunting & Golding Ltd (DB&G), a financial institution once owned by the Opposition member of parliament.
In his explanation, pursuant to Standing Order number 18, Bunting sought to "show that (Shaw) misled this Honourable House and also breached Standing Order 35 (5) which states "No member shall impute improper motives to any other member of either chamber."
"I am requesting that the minister withdraw these statements and if he complies then it will be unnecessary to seek further sanctions."
The two deals referred to by Shaw in his closing budget presentation involved the sale by the government of cash flows owing by the Jamaica Redevelopment Foundation and the sale of future receivables from the sale of National Commercial Bank (NCB) to Michael Lee Chin's AIC.
Bunting contends that the former never took place."DB&G did communicate with the Government about the potential benefits of a transaction arising from the Government's ongoing dealings with the Jamaica Redevelopment Foundation. However, those discussions did not lead to any form of transaction," he said.
The second "deal", Bunting said, arose from his company approaching the government with an offer to purchase the receivables for its present value, which, according to him, assisted the government in meeting its 2003/2004 fiscal targets while the transaction fell under the ambits of the Government of Jamaica Handbook of Public Sector Procurement Procedures (May, 2001) of the National Contracts Commission.In particular, the Procedures provide that Sole Source or Direct Contracting may be justified in circumstances such as when the procuring entity receives an unsolicited proposal it considers meritorious; when there is an unusual and compelling urgency; or where it is otherwise in the public interest.
"It was a matter of public record that part of the price at which the Government had sold the National Commercial Bank (NCB) to AIC some time before, included a portion that would be paid over time with interest," said Bunting's statement. "As the 2003/4 fiscal year was drawing to a close, it was also well known in financial circles that the Government was facing a significant challenge in meeting its fiscal target. Failure to meet the target would have been damaging to the Jamaican economy, as it would result in expectations of higher public sector borrowings and higher interest rates in the coming year."
Bunting said his firm had conceptualised the transaction in which the Government would sell the future payments from AIC to yield their present value, applying current interest rates to determine the price of the sale of those cash flows.
By his reasoning, the government would have acted unethically if it had tendered out DB&G's idea to the public and the resultant benefit to the overall economy would have been "thwarted if the transaction did not proceed with urgency".
"It was a clear case in which the Sole Source or Direct Contracting approach was justified in the public interest," he said.
The AIC receivables transaction carried a return of 1.5-2.0 percentage points above six-month treasury bill rate and gave DB&G a one per cent fee for conceptualising and carrying out the entire transaction.
Bunting insisted in his statement yesterday that it would have been unfair to compare the negotiated fee to those Government pays for routine offerings of debt that do not involve any financial engineering or any continuing administrative role, as DB&G had a continuing obligation as registrar and paying agent for the transaction.
Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20080513T220000-0500_135579_OBS_DB_G__GOV_T_DEAL_WAS_GUIDED_BY_PROCUREMENT_GUIDELINES__SAYS_BUNTING.asp
Peter Bunting yesterday dismissed claims, made by Finance Minister Audley Shaw, of "sweetheart deals" that benefited Dehring Bunting & Golding Ltd (DB&G), a financial institution once owned by the Opposition member of parliament.
In his explanation, pursuant to Standing Order number 18, Bunting sought to "show that (Shaw) misled this Honourable House and also breached Standing Order 35 (5) which states "No member shall impute improper motives to any other member of either chamber."
"I am requesting that the minister withdraw these statements and if he complies then it will be unnecessary to seek further sanctions."
The two deals referred to by Shaw in his closing budget presentation involved the sale by the government of cash flows owing by the Jamaica Redevelopment Foundation and the sale of future receivables from the sale of National Commercial Bank (NCB) to Michael Lee Chin's AIC.
Bunting contends that the former never took place."DB&G did communicate with the Government about the potential benefits of a transaction arising from the Government's ongoing dealings with the Jamaica Redevelopment Foundation. However, those discussions did not lead to any form of transaction," he said.
The second "deal", Bunting said, arose from his company approaching the government with an offer to purchase the receivables for its present value, which, according to him, assisted the government in meeting its 2003/2004 fiscal targets while the transaction fell under the ambits of the Government of Jamaica Handbook of Public Sector Procurement Procedures (May, 2001) of the National Contracts Commission.In particular, the Procedures provide that Sole Source or Direct Contracting may be justified in circumstances such as when the procuring entity receives an unsolicited proposal it considers meritorious; when there is an unusual and compelling urgency; or where it is otherwise in the public interest.
"It was a matter of public record that part of the price at which the Government had sold the National Commercial Bank (NCB) to AIC some time before, included a portion that would be paid over time with interest," said Bunting's statement. "As the 2003/4 fiscal year was drawing to a close, it was also well known in financial circles that the Government was facing a significant challenge in meeting its fiscal target. Failure to meet the target would have been damaging to the Jamaican economy, as it would result in expectations of higher public sector borrowings and higher interest rates in the coming year."
Bunting said his firm had conceptualised the transaction in which the Government would sell the future payments from AIC to yield their present value, applying current interest rates to determine the price of the sale of those cash flows.
By his reasoning, the government would have acted unethically if it had tendered out DB&G's idea to the public and the resultant benefit to the overall economy would have been "thwarted if the transaction did not proceed with urgency".
"It was a clear case in which the Sole Source or Direct Contracting approach was justified in the public interest," he said.
The AIC receivables transaction carried a return of 1.5-2.0 percentage points above six-month treasury bill rate and gave DB&G a one per cent fee for conceptualising and carrying out the entire transaction.
Bunting insisted in his statement yesterday that it would have been unfair to compare the negotiated fee to those Government pays for routine offerings of debt that do not involve any financial engineering or any continuing administrative role, as DB&G had a continuing obligation as registrar and paying agent for the transaction.
Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20080513T220000-0500_135579_OBS_DB_G__GOV_T_DEAL_WAS_GUIDED_BY_PROCUREMENT_GUIDELINES__SAYS_BUNTING.asp
JP snack operation back on track
Published: Wednesday May 14, 2008
Jamaica Producers Group Limited's local snack business, which was nega-tively impacted by Hurricane Dean last year, is said to be fully back in operation.
The company's Annotto Bay factory in St Mary, which was forced to close temporarily because of the unavailability of bananas for its snack operation, went back into production four weeks ago, on April 17.
Steady supply
General Manager for Jamaica Producers Foods, David Martin, said the combination of the snack factories in the Dominican Republic and Jamaica was now allowing JP to more steadily supply the market.
"As far as snacks go, we are having a really good season," Martin told Wednesday Business, referring to the resumption of frying at the St Mary plant. "We are able to supply the market."
Immediately after Hurri-cane Dean struck last year August, most of the company's banana crop was destroyed.
Production at the St Mary factory ceased eight weeks later, as JP Foods was still able to harvest the felled bananas, which it used to continue the production of chips. Thereafter, the company started to rely on its snack factory in the Dominican Republic, to continue feeding snacks to Jamaica, with the overseas operation currently servicing 50 per cent of the local market.
That will change when the St Mary operation is back in full production.
JP normally exports about 85 per cent of its banana crop, but the company has been absent from that market since the storm.
No revenues
In fact, JP said in a stock market filing that its Jamaican snack business and bananas exports had earned no revenues for the group in the March quarter.
"When a hurricane strikes, the first thing to stop is exports and the last thing to go is domestic fresh bananas," Martin said.
It is now replanting its field, however, and is planning to begin exporting again by the third quarter. The other 15 per cent would go into snack production and supplies of ripe and green bananas on the local market.
Local market
Martin told Wednesday Business that JP is now using about two thirds of the crop for its snack business and is distributing the remaining one third into the local market.
"On a normal basis, factory frying has been twice as much as the company selling ripe and green locally. We are in a peculiar position because of the hurricane," said Martin.
The distribution of the food locally is being handled from JP's Retirement Road complex in Kingston.
Source:
Sabrina Gordon
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20080514/business/business2.html
susan.gordon@gleanerjm.com
Jamaica Producers Group Limited's local snack business, which was nega-tively impacted by Hurricane Dean last year, is said to be fully back in operation.
The company's Annotto Bay factory in St Mary, which was forced to close temporarily because of the unavailability of bananas for its snack operation, went back into production four weeks ago, on April 17.
Steady supply
General Manager for Jamaica Producers Foods, David Martin, said the combination of the snack factories in the Dominican Republic and Jamaica was now allowing JP to more steadily supply the market.
"As far as snacks go, we are having a really good season," Martin told Wednesday Business, referring to the resumption of frying at the St Mary plant. "We are able to supply the market."
Immediately after Hurri-cane Dean struck last year August, most of the company's banana crop was destroyed.
Production at the St Mary factory ceased eight weeks later, as JP Foods was still able to harvest the felled bananas, which it used to continue the production of chips. Thereafter, the company started to rely on its snack factory in the Dominican Republic, to continue feeding snacks to Jamaica, with the overseas operation currently servicing 50 per cent of the local market.
That will change when the St Mary operation is back in full production.
JP normally exports about 85 per cent of its banana crop, but the company has been absent from that market since the storm.
No revenues
In fact, JP said in a stock market filing that its Jamaican snack business and bananas exports had earned no revenues for the group in the March quarter.
"When a hurricane strikes, the first thing to stop is exports and the last thing to go is domestic fresh bananas," Martin said.
It is now replanting its field, however, and is planning to begin exporting again by the third quarter. The other 15 per cent would go into snack production and supplies of ripe and green bananas on the local market.
Local market
Martin told Wednesday Business that JP is now using about two thirds of the crop for its snack business and is distributing the remaining one third into the local market.
"On a normal basis, factory frying has been twice as much as the company selling ripe and green locally. We are in a peculiar position because of the hurricane," said Martin.
The distribution of the food locally is being handled from JP's Retirement Road complex in Kingston.
Source:
Sabrina Gordon
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20080514/business/business2.html
susan.gordon@gleanerjm.com
C&WJ bundles up for competition - Hunts 15-20% new market share
Published: Wednesday May 14, 2008
Cable and Wireless Jamaica Limited (CW&J), this week rolled out a suite of bundled services structured for both post- and pre-paid clients who want predictability in their spending on mobile phone services.
It is a 'first to market' innovation for Jamaica's largest and oldest telecoms, which, since the turn of the decade, has been battered by competition and has confessed to bad bets on recent creations.
For one flat rate per month, ranging from a low of $799 up to $7,499, for on-network, off-network and international calls and SMS texting, bmobile subscribers can buy packages of 280-3,800 minutes and 40-1,000 texts, from among eight structured plans.
First-time effort
"It's the first time that we're putting together comprehensive bundles," said chief commercial officer Mariano Doble, who joined the company last year.
C&WJ sees it as an opportunity to seize market share, saying the plan could "easily add 15 per cent to 20 per cent more to our customer base," according Doble, under its SupaPak prepaid and UltraPak post-paid bundles.
Its brochure matches the cost of each bundle against chief rival Digicel Jamaica's offerings, indicating prices that are 83 per cent to 400 per cent cheaper. For example, C&WJ's cheapest bundle, the SuperPak200, which allows 200 minutes of on-network calls, 40 minutes to other networks and 40 minutes of international calls to the United States, Canada and United Kingdom fixed lines, plus 40 text messages anywhere, is priced at $799 prepaid. Similar services at Digicel, said C&WJ, costs $3,238 - or 305 per cent more.
Less for individual products
But it is also a 250 per cent less than the $2,800 that bmobile subscribers now pay for the individual products, Wednesday Business calculations show.
C&WJ has just under 600,000 'active' mobile subscribers, which means the company is looking to grow its base to about 700,000 or more under this new marketing thrust.
More than 90 per cent of its customers are on pre-paid plans, said Doble.
The post-paid suite is $1,099 for the cheapest bundle of 420 minutes and 60 texts, but packages range up to $6,999 for 3,800 minutes and 1,000 texts. Cable and Wireless, it appears, is seeking to leverage new income from its smaller grouping of post-paid clients, who, since April, have been paying basic rates of $399-$1,499 per month.
C&WJ on Monday laid claim to close to a third of the Jamaican mobile market, but remains a distant second to the 1.9 million customers that Digicel has claimed. MiPhone remains at No 3, with an estimated 220,000 customers.
Doble on Monday exuded confidence in his dismissal of MiPhone, now owned by América Móvil, as a serious threat to C&WJ's market position.
"We have the right plans in place," he told Wednesday Business. "We have 30 per cent market share," he added. "They don't have anything close to that."
Already in place
Doble was cagey about the money being spent on the roll-out of the new plan, saying the infrastructure was already in place and was just being leveraged to deploy new products.
Still, with full-page teaser advertisements in the major newspapers, and promotions on the electronic media, plus glossy product brochures, all spelling a full-scale marketing campaign, the commercial director said the roll-out was a multimillion-dollar investment.
Over the past two to three years, Cable and Wireless Jamaica, backed by its parent C&W Plc, has been rolling out a $5-billion capital-expenditure programme to improve its network, including transmission via construction of new cell towers, topped by new product roll-outs.
Doble said some of the products have not been as lucrative as hoped, and while he gave no specifics, the company has in the past named Homefone and ICC cricket sponsorship as a drag on revenues, while also recently reshaping its Anyone mobile suite and dropping the $10/$8 plan on April 1, around which a massive promotional drive had been mounted two years before.
Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20080514/business/business3.html
business@gleanerjm.com
Cable and Wireless Jamaica Limited (CW&J), this week rolled out a suite of bundled services structured for both post- and pre-paid clients who want predictability in their spending on mobile phone services.
It is a 'first to market' innovation for Jamaica's largest and oldest telecoms, which, since the turn of the decade, has been battered by competition and has confessed to bad bets on recent creations.
For one flat rate per month, ranging from a low of $799 up to $7,499, for on-network, off-network and international calls and SMS texting, bmobile subscribers can buy packages of 280-3,800 minutes and 40-1,000 texts, from among eight structured plans.
First-time effort
"It's the first time that we're putting together comprehensive bundles," said chief commercial officer Mariano Doble, who joined the company last year.
C&WJ sees it as an opportunity to seize market share, saying the plan could "easily add 15 per cent to 20 per cent more to our customer base," according Doble, under its SupaPak prepaid and UltraPak post-paid bundles.
Its brochure matches the cost of each bundle against chief rival Digicel Jamaica's offerings, indicating prices that are 83 per cent to 400 per cent cheaper. For example, C&WJ's cheapest bundle, the SuperPak200, which allows 200 minutes of on-network calls, 40 minutes to other networks and 40 minutes of international calls to the United States, Canada and United Kingdom fixed lines, plus 40 text messages anywhere, is priced at $799 prepaid. Similar services at Digicel, said C&WJ, costs $3,238 - or 305 per cent more.
Less for individual products
But it is also a 250 per cent less than the $2,800 that bmobile subscribers now pay for the individual products, Wednesday Business calculations show.
C&WJ has just under 600,000 'active' mobile subscribers, which means the company is looking to grow its base to about 700,000 or more under this new marketing thrust.
More than 90 per cent of its customers are on pre-paid plans, said Doble.
The post-paid suite is $1,099 for the cheapest bundle of 420 minutes and 60 texts, but packages range up to $6,999 for 3,800 minutes and 1,000 texts. Cable and Wireless, it appears, is seeking to leverage new income from its smaller grouping of post-paid clients, who, since April, have been paying basic rates of $399-$1,499 per month.
C&WJ on Monday laid claim to close to a third of the Jamaican mobile market, but remains a distant second to the 1.9 million customers that Digicel has claimed. MiPhone remains at No 3, with an estimated 220,000 customers.
Doble on Monday exuded confidence in his dismissal of MiPhone, now owned by América Móvil, as a serious threat to C&WJ's market position.
"We have the right plans in place," he told Wednesday Business. "We have 30 per cent market share," he added. "They don't have anything close to that."
Already in place
Doble was cagey about the money being spent on the roll-out of the new plan, saying the infrastructure was already in place and was just being leveraged to deploy new products.
Still, with full-page teaser advertisements in the major newspapers, and promotions on the electronic media, plus glossy product brochures, all spelling a full-scale marketing campaign, the commercial director said the roll-out was a multimillion-dollar investment.
Over the past two to three years, Cable and Wireless Jamaica, backed by its parent C&W Plc, has been rolling out a $5-billion capital-expenditure programme to improve its network, including transmission via construction of new cell towers, topped by new product roll-outs.
Doble said some of the products have not been as lucrative as hoped, and while he gave no specifics, the company has in the past named Homefone and ICC cricket sponsorship as a drag on revenues, while also recently reshaping its Anyone mobile suite and dropping the $10/$8 plan on April 1, around which a massive promotional drive had been mounted two years before.
Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20080514/business/business3.html
business@gleanerjm.com
Tuesday, May 13, 2008
GHL continues to improve
Published: Tuesday May 13, 2008
Guardian Holdings Limited
A welcome recovery in 2007 followed through into a strong operational first quarter performance for Guardian Holdings Limited (GHL). For the first quarter ended March 31, 2008, the Group recorded an earnings per share diluted of $0.24, compared to a loss per share of $0.99 at the end of the first quarter (1Q) of 2007. Excluding fair value losses, GHL's earnings growth was up approximately 30 per cent from $0.26 to $0.34.
The chairman commented that all operating divisions in the various geographic regions produced positive returns during the first quarter.
The core revenue source, Net Insurance Premium Revenue grew by 3 per cent from $1B to $1.1B. With the exception of 'Other Revenue', all other revenue streams experienced meaningful growth, which led to 3.9 per cent boost in Total Revenue from $1.3B to $1.4B.
A 0.7 per cent growth in Net Insurance Benefits & Claims, and a 0.9 per cent reduction in Expenses, led to a 66.5 per cent boost in Operating Profit before fair value losses to $122.4M.
A modest resurgence in the local and regional equity markets during the first three months of 2008 translated into an encouraging improvement in the Group's equity portfolio. However, the gains experienced as a result of local equities were adversely affected by the declining market value of the Group's holdings of international equities and Jamaican Government Bonds. As a result Fair Value losses were down 15.7M, although still a significant improvement when compared to the 251.1M loss in the 1Q of 2007.
After factoring in the increase in investments in associated companies, and Finance Charges, the Group closed the first quarter with a Net Profit of $50.6M from a Net Loss of $205.2M in the comparable period if 2007.
Gains from the sale of its holding of RBTT shares along with the Grupo Mundial of Panama investment should translate into a one time gain of $2.24 per share.
It is anticipated that the cash injection of $2 billion from the RBTT deal will be used to reduce some of the Group's debt burden and by extent Finance Charges. The majority of the cash however, may be used for further acquisitions or for investment in any viable investment opportunities that may arise.
At the current price of $30.75, this stock is trading at an attractive forward P/E multiple of 12.8 times. In considering the Group's operational recovery which started at the end of 2007, and the opportunities arising for GHL out of the completion of the RBTT/RBC deal, BOURSE maintains a BUY recommendation on this stock.
Republic Bank Limited
For the first half of the financial year 2008, Republic Bank Limited (RBL) produced an EPS of $3.93, a 22.8 per cent decline from the $5.09 EPS of the comparable period of 2007. Both periods included one-off gains which if excluded would paint a different picture. The first half of 2007 included a $370M gain from the sale of the Bank's shareholding in FirstCaribbean International Bank, while the first half of 2008 included an after tax gain of $82M from the allocation of shares in VISA Inc. Excluding these non-recurring items, core earnings grew by 23 per cent from $443.8M to $547.6M. The board of directors has approved a half year dividend of $1.15 per share, a 22 per cent increase over the 2007 dividend, which will be paid to shareholders on May 29, 2008.
A brief review of the company's results will reveal a 12.7 per cent decline in Profit before taxation from $1B to $879.6M, while After tax profit fell 20.5 per cent from $859M to $683.4M.
The Bank's Total Assets increased over the comparative period by 9.5 per cent, while Total Shareholders' Equity improved by 15.9 per cent.
RBL continues to prove itself to be a very competitive contender in a very lucrative local economy and has remained unaffected by the ongoing financial crisis affecting the international financial institutions and the global economy.
At the current price of $100.00, shares of RBL are trading at a forward P/E multiple of 13.7 times based on core earnings. Consistency at achieving strong operational growth, and the expectation of yet another strong financial year resulted in the share price appreciating 25 per cent since the start of 2008. BOURSE revises its recommendation at this time to a HOLD.
Trinidad Cement Limited (TCL)
Within the past two weeks Trinidad Cement Limited (TCL) released results for both financial year 2007 and the first quarter of 2008. For the year ended December 31, 2007, the Group announced a 28 per cent growth in its EPS from $0.60 at the end of 2006, to $0.77. When Cement Claims incurred by the Group's Jamaican subsidiary, Caribbean Cement Company Limited (CCCL) in both 2006 and 2007 were excluded, a smaller growth in earnings was reflected, more in the range of 10 to 12 per cent. The board of directors approved a dividend of $0.07 (2006:$0.06), which will be paid on June 20, 2008 to shareholders on record at the close of business on June 6, 2008. The Group remains prudent in terms of its dividend for the financial year 2007 as a result of the various expansion and modernisation projects currently on the table.
A buoyant construction industry, increased revenues and operational efficiencies of one of the Group's subsidiaries, Readymix West Indies Limited (RML) in 2007, contributed to TCL's year end performance. The Group's Jamaican subsidiary, CCCL also recorded an increase in profitability for the year 2007.
Total Group Revenue increased by 11.9 per cent from $1.7B to $1.9B, the highest Revenue ever achieved by the Group. Operating Profit before Cement Claims experienced a 19.1 per cent increase while a 31.9 per cent increase in Operating Profit was achieved after Cement Claims were deducted. With Finance costs remaining relatively flat, Profit before Taxation increased 53.1 per cent to $245.7M, while Profit after Taxation was up 39.3 per cent from $151.8M to $211.4M.
The good performance of 2007 did not follow through into the new year as the Group's 2008 first quarter results revealed a relatively flat year on year growth in earnings. For the three months ended March 31, 2008, the TCL Group reported a 5 per cent decline in EPS from $0.20 to $0.19.
While the RML and CCCL subsidiaries continued to do well, the Arawak Cement Company Limited (ACCL) subsidiary encountered some hurdles during the first three months of 2008. These challenges were a result of the new fuel system, which the Group anticipates will be resolved by mid 2008.
For the first quarter of 2008, Group Revenue was up 8.7 per cent from $479.6M to $521.5M. An increase in operating costs resulted in a decline in Operating profit of 5.9 per cent. while at the bottom line, Net Profit diminished by 7.4 per cent from $56M to $51.9M. Recent and ongoing expansions have resulted in a relatively high debt to equity ratio of 91 per cent.
Looking forward, the Group anticipates that both domestic and export demand for cement will remain stable. The benefits of TCL's expanded production capacity, the commissioning of the new kiln at CCCL, along with the new fuel system at AACL, are expected to bear fruit for the Group by year end 2008. Should these benefits materialise during the year, the Group is well poised to deliver a good financial performance for the year 2008, despite its flat first quarter results.
On a fundamental basis, shares of TCL are trading at a current price of $10.25 and at a forward P/E multiple of 12.3 times, At a valuation of 14 times, BOURSE maintains a BUY recommendation on this stock.
Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161321865
Guardian Holdings Limited
A welcome recovery in 2007 followed through into a strong operational first quarter performance for Guardian Holdings Limited (GHL). For the first quarter ended March 31, 2008, the Group recorded an earnings per share diluted of $0.24, compared to a loss per share of $0.99 at the end of the first quarter (1Q) of 2007. Excluding fair value losses, GHL's earnings growth was up approximately 30 per cent from $0.26 to $0.34.
The chairman commented that all operating divisions in the various geographic regions produced positive returns during the first quarter.
The core revenue source, Net Insurance Premium Revenue grew by 3 per cent from $1B to $1.1B. With the exception of 'Other Revenue', all other revenue streams experienced meaningful growth, which led to 3.9 per cent boost in Total Revenue from $1.3B to $1.4B.
A 0.7 per cent growth in Net Insurance Benefits & Claims, and a 0.9 per cent reduction in Expenses, led to a 66.5 per cent boost in Operating Profit before fair value losses to $122.4M.
A modest resurgence in the local and regional equity markets during the first three months of 2008 translated into an encouraging improvement in the Group's equity portfolio. However, the gains experienced as a result of local equities were adversely affected by the declining market value of the Group's holdings of international equities and Jamaican Government Bonds. As a result Fair Value losses were down 15.7M, although still a significant improvement when compared to the 251.1M loss in the 1Q of 2007.
After factoring in the increase in investments in associated companies, and Finance Charges, the Group closed the first quarter with a Net Profit of $50.6M from a Net Loss of $205.2M in the comparable period if 2007.
Gains from the sale of its holding of RBTT shares along with the Grupo Mundial of Panama investment should translate into a one time gain of $2.24 per share.
It is anticipated that the cash injection of $2 billion from the RBTT deal will be used to reduce some of the Group's debt burden and by extent Finance Charges. The majority of the cash however, may be used for further acquisitions or for investment in any viable investment opportunities that may arise.
At the current price of $30.75, this stock is trading at an attractive forward P/E multiple of 12.8 times. In considering the Group's operational recovery which started at the end of 2007, and the opportunities arising for GHL out of the completion of the RBTT/RBC deal, BOURSE maintains a BUY recommendation on this stock.
Republic Bank Limited
For the first half of the financial year 2008, Republic Bank Limited (RBL) produced an EPS of $3.93, a 22.8 per cent decline from the $5.09 EPS of the comparable period of 2007. Both periods included one-off gains which if excluded would paint a different picture. The first half of 2007 included a $370M gain from the sale of the Bank's shareholding in FirstCaribbean International Bank, while the first half of 2008 included an after tax gain of $82M from the allocation of shares in VISA Inc. Excluding these non-recurring items, core earnings grew by 23 per cent from $443.8M to $547.6M. The board of directors has approved a half year dividend of $1.15 per share, a 22 per cent increase over the 2007 dividend, which will be paid to shareholders on May 29, 2008.
A brief review of the company's results will reveal a 12.7 per cent decline in Profit before taxation from $1B to $879.6M, while After tax profit fell 20.5 per cent from $859M to $683.4M.
The Bank's Total Assets increased over the comparative period by 9.5 per cent, while Total Shareholders' Equity improved by 15.9 per cent.
RBL continues to prove itself to be a very competitive contender in a very lucrative local economy and has remained unaffected by the ongoing financial crisis affecting the international financial institutions and the global economy.
At the current price of $100.00, shares of RBL are trading at a forward P/E multiple of 13.7 times based on core earnings. Consistency at achieving strong operational growth, and the expectation of yet another strong financial year resulted in the share price appreciating 25 per cent since the start of 2008. BOURSE revises its recommendation at this time to a HOLD.
Trinidad Cement Limited (TCL)
Within the past two weeks Trinidad Cement Limited (TCL) released results for both financial year 2007 and the first quarter of 2008. For the year ended December 31, 2007, the Group announced a 28 per cent growth in its EPS from $0.60 at the end of 2006, to $0.77. When Cement Claims incurred by the Group's Jamaican subsidiary, Caribbean Cement Company Limited (CCCL) in both 2006 and 2007 were excluded, a smaller growth in earnings was reflected, more in the range of 10 to 12 per cent. The board of directors approved a dividend of $0.07 (2006:$0.06), which will be paid on June 20, 2008 to shareholders on record at the close of business on June 6, 2008. The Group remains prudent in terms of its dividend for the financial year 2007 as a result of the various expansion and modernisation projects currently on the table.
A buoyant construction industry, increased revenues and operational efficiencies of one of the Group's subsidiaries, Readymix West Indies Limited (RML) in 2007, contributed to TCL's year end performance. The Group's Jamaican subsidiary, CCCL also recorded an increase in profitability for the year 2007.
Total Group Revenue increased by 11.9 per cent from $1.7B to $1.9B, the highest Revenue ever achieved by the Group. Operating Profit before Cement Claims experienced a 19.1 per cent increase while a 31.9 per cent increase in Operating Profit was achieved after Cement Claims were deducted. With Finance costs remaining relatively flat, Profit before Taxation increased 53.1 per cent to $245.7M, while Profit after Taxation was up 39.3 per cent from $151.8M to $211.4M.
The good performance of 2007 did not follow through into the new year as the Group's 2008 first quarter results revealed a relatively flat year on year growth in earnings. For the three months ended March 31, 2008, the TCL Group reported a 5 per cent decline in EPS from $0.20 to $0.19.
While the RML and CCCL subsidiaries continued to do well, the Arawak Cement Company Limited (ACCL) subsidiary encountered some hurdles during the first three months of 2008. These challenges were a result of the new fuel system, which the Group anticipates will be resolved by mid 2008.
For the first quarter of 2008, Group Revenue was up 8.7 per cent from $479.6M to $521.5M. An increase in operating costs resulted in a decline in Operating profit of 5.9 per cent. while at the bottom line, Net Profit diminished by 7.4 per cent from $56M to $51.9M. Recent and ongoing expansions have resulted in a relatively high debt to equity ratio of 91 per cent.
Looking forward, the Group anticipates that both domestic and export demand for cement will remain stable. The benefits of TCL's expanded production capacity, the commissioning of the new kiln at CCCL, along with the new fuel system at AACL, are expected to bear fruit for the Group by year end 2008. Should these benefits materialise during the year, the Group is well poised to deliver a good financial performance for the year 2008, despite its flat first quarter results.
On a fundamental basis, shares of TCL are trading at a current price of $10.25 and at a forward P/E multiple of 12.3 times, At a valuation of 14 times, BOURSE maintains a BUY recommendation on this stock.
Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161321865
Friday, May 9, 2008
Jamaica Stock Exchange (JSE) preference offer to open May 16
Published: Friday May 9, 2008
The Jamaica Stock Exchange (JSE) in one week will offer preference shares to the market, with the dual intent of raising capital while presenting investors with a clear sign that the organisation was now demutua-lised and serious about going public.
The offer, priced at $2 per share, is targeting take up of 33 million shares to raise $66 million of equity for the exchange.
The exchange is currently capitalised at $928 million, and has assets of $1 billion.
The placement on which NCB Capital Markets is lead broker and arranger, is on May 16 to 30.
The prefs taken up under the offer will be listed, said JSE General Manager Marlene Street-Forrest, adding that in two years, the exchange will head back to the market with another offer of common stock.
The exchange was formalised as a 'for profit' entity in April, when its regulatory functions were split off from its commercial arm.
Before that, the exchange had revised and adopted new articles of association and memorandum of understanding, created new share capital and distributed to its dedicated former owners.
Profitable entity
As a mutual company, the JSE was owned by its 11 member stockbrokerages, which had seats on the exchange.11 seats have been exchanged for issued shares.
The JSE is a profitable entity, reporting $44 million of profit in 2007 to recover some ground on the $8 million made in 2006. Still, the company has more ground to make up, to get back into striking distance of the $114 million net income made in 2005.
"The planned listing of the exchange's securities follows on a commitment made to the market," said Street-Forrest.
The JSE last month completed its reorganisation under which its commercial arm, now run by Street-Forrest, was divorced from its market regulatory division and placed under Wentworth Graham's supervision.
That reformulation, Street-Forrest said, finalised the process of demutualisation.
The JSE continues to oversee the market and listed companies - ensuring compliance with market rules and meting out sanctions when breached - but won't be allowed to regulate itself.
That job will fall to the Financial Services Commission (FSC) once the JSE prefs are publicly listed in June, deepening its watchdog role over the exchange.
"Oversight regulation for the exchange as a listed company will come from the FSC in the event that there is a conflict, whereby the exchange fails to comply with all the various requirement of a listed company," said Street-Forrest.
"Therefore, if the exchange fails to submit financials on a timely basis the market regulatory committee will refer this to the FSC to be dealt with."
The FSC already has oversight of the exchange, as an organisation operating within the securities industry, which it regulates.
The Securities Act gives the regulator various powers including, the right to object to a change in the exchange's rules, the right to approve persons appointed to the board of the exchange, the power to enforce the rules of the exchange and to suspend trading in a listed stock.
The exchange as a listed company will be guided by the same agreements and rules that govern all other public companies, including the reporting of quarterly and annual financial statements, and disclosure of information to the market on any material events.
Source:
Sabrina Gordon
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20080509/business/business8.html
sabrina.gordon@gleanerjm.com
The Jamaica Stock Exchange (JSE) in one week will offer preference shares to the market, with the dual intent of raising capital while presenting investors with a clear sign that the organisation was now demutua-lised and serious about going public.
The offer, priced at $2 per share, is targeting take up of 33 million shares to raise $66 million of equity for the exchange.
The exchange is currently capitalised at $928 million, and has assets of $1 billion.
The placement on which NCB Capital Markets is lead broker and arranger, is on May 16 to 30.
The prefs taken up under the offer will be listed, said JSE General Manager Marlene Street-Forrest, adding that in two years, the exchange will head back to the market with another offer of common stock.
The exchange was formalised as a 'for profit' entity in April, when its regulatory functions were split off from its commercial arm.
Before that, the exchange had revised and adopted new articles of association and memorandum of understanding, created new share capital and distributed to its dedicated former owners.
Profitable entity
As a mutual company, the JSE was owned by its 11 member stockbrokerages, which had seats on the exchange.11 seats have been exchanged for issued shares.
The JSE is a profitable entity, reporting $44 million of profit in 2007 to recover some ground on the $8 million made in 2006. Still, the company has more ground to make up, to get back into striking distance of the $114 million net income made in 2005.
"The planned listing of the exchange's securities follows on a commitment made to the market," said Street-Forrest.
The JSE last month completed its reorganisation under which its commercial arm, now run by Street-Forrest, was divorced from its market regulatory division and placed under Wentworth Graham's supervision.
That reformulation, Street-Forrest said, finalised the process of demutualisation.
The JSE continues to oversee the market and listed companies - ensuring compliance with market rules and meting out sanctions when breached - but won't be allowed to regulate itself.
That job will fall to the Financial Services Commission (FSC) once the JSE prefs are publicly listed in June, deepening its watchdog role over the exchange.
"Oversight regulation for the exchange as a listed company will come from the FSC in the event that there is a conflict, whereby the exchange fails to comply with all the various requirement of a listed company," said Street-Forrest.
"Therefore, if the exchange fails to submit financials on a timely basis the market regulatory committee will refer this to the FSC to be dealt with."
The FSC already has oversight of the exchange, as an organisation operating within the securities industry, which it regulates.
The Securities Act gives the regulator various powers including, the right to object to a change in the exchange's rules, the right to approve persons appointed to the board of the exchange, the power to enforce the rules of the exchange and to suspend trading in a listed stock.
The exchange as a listed company will be guided by the same agreements and rules that govern all other public companies, including the reporting of quarterly and annual financial statements, and disclosure of information to the market on any material events.
Source:
Sabrina Gordon
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20080509/business/business8.html
sabrina.gordon@gleanerjm.com
Subscribe to:
Posts (Atom)