Home' Trinidad and Tobago Guardian : March 29th 2015 Contents MARCH 29 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG11
Trust Ltd (PJAM) is an
investment and manage-
ment holding company
involved in a wide range of
activities. The tust marked
its 50th anniversary on
March 5, 2015.
The ten largest shareholders collectively own
128,752,608 shares, representing 60.38 per cent
of the total outstanding shares. Guardian Life
Ltd owns 4,136,759 shares or 1.94 per cent.
Senior managers, Stephen B Facey and Paul
Facey, personally and via connected parties,
own 82,504,936 shares or about 39 per cent of
To help bring matters a little closer to home,
some readers may recall that Agostini s Ltd
bought Barbados-based Facey Trading Ltd in
Some of its subsidiaries include Portfolio
Partners Ltd (investment management), Jamaican
Floral Exports Ltd (horticulture), Scotts Preserves
Ltd (food and beverage) and Busha Browne s
Company Ltd (distribution). All these entities
are Jamaican-based companies.
Perhaps, of greater interest to local readers,
is its investment in two listed associated com-
panies. The trust holds a 20.83 per cent interest
in Hardware & Lumber Ltd, which is connected
to the GraceKennedy Group. In addition, it owns
31.56 per cent of Sagicor Group Jamaica Ltd,
which is a subsidiary of Sagicor Financial Cor-
Interestingly, the Sagicor Pooled Equity Fund,
which is managed by Sagicor Group Jamaica
Ltd, owns almost 11.18 per cent (23,835,559
shares) of PJAM. This investment is held as part
of PJAM s pension fund asset, which Sagicor
Let us see what factors contributed to PJAM s
performance for the 12-month period ended
December 31, 2014.
Total revenue declined to J$1.94 billion from
the previous year s J$2.1 billion. The most sig-
nificant change occurred in the investment
income component. Here, income fell from
J$485.8 million to J$257.3million. There was a
huge reduction in foreign exchange gains, which
registered at J$117 million from the previous
level of J$219 million; this was due to the slower
devaluation of the Jamaican dollar.
In addition, impairment charges on avail-
able-for-sale investments increased from J$34
million in 2013 to last year s J$69 million. Finally,
fair value losses on financial assets at fair value
through profit and loss moved from a positive
J$43 million in 2013 to a negative J$55 million.
Property income rose to J$1.55 billion from
J$1.47 billion. The rental income component
increased by 10.7 per cent to J$1.35 billion from
J$1.22 billion previously. This gain was partly
offset by the lower level of fair value gains on
property valuation; this component was J$202
million versus J$253.4 million in 2013. The occu-
pancy level on its various properties exceeds 95
Commissions increased to J$61.4 million from
the previous year s J$52.1 million.
Both components of other income, manage-
ment fees and other income, registered declines.
The former fell to J$63 million from J$75.7 mil-
lion. In the latter s case, the decline was more
precipitous as the 2014 figure came in at J$6.4
million (2013: J$20.9 million).
Expenses and finance costs
Operating expenses for 2014 were J$1.18 billion
from the previous year s J$1.05 billion. The most
significant component, direct cost of property
management, rose from J$599.7 million to last
year s J$650.8 million. Also contributing to the
increase was much higher staff costs; these rose
to J$302.8 million from the 2013 level of J$227.8
Bad debts jumped to J$10.6 million from a
modest J$0.4 million previously, while auditors
remuneration rose to J$19.4 million from J$15.2
Among the declining costs were professional
fees (2014: J$61 million; 2013: J$ 71million) and
other expenses (2014: J$44.3 million; 2013: J$50
Finance costs saw a welcome decline, moving
down to J$506.6 million from the previous year s
J$609.1 million. The interest expense component
did increase to J$372.5 million (2013: J$363.7
million. Fortunately, helped by the slower pace
of devaluation of the Jamaican dollar, foreign
exchange losses fell to J$131.7 million; this was
J$111.1 million less than the J$242.8 million
recorded for 2013.
Associated companies and joint
ventures boosted pre-tax profits
The share of results from joint ventures moved
from a positive J$5.5 million in 2013 to a negative
J$39.6 million last year.
This adverse result was driven by the loss of
J$40 million at Mavis Bank Coffee Factory Ltd.
In 2013, this company recorded a gain of J$6
million. This loss was driven by an industry-
wide reduction in available coffee. Mavis Bank
is the leading processor and seller of the famous
Blue Mountain coffee.
On the other hand, profits of J$13 million
(2013: J$19 million) at New Castle, which exports
a unique line of seasonings and sauces, helped
contain the losses from joint ventures.
The trust s star holding is its 31.56 per cent
stake (2013: 32.8 per cent) in Sagicor Group
Jamaica Ltd. This investment alone accounted
for J$2,663 million of the J$2,733 million attrib-
uted to its share of results from its associated
Sagicor Jamaica s profit rose from J$6.3 billion
in 2013 to J$8.56 billion last year. The main
driver of this result was the robust increase in
investment income, which climbed to J$12.55
billion from 2013 s J$8.78 billion. In addition,
the company recognised negative goodwill of
J$3.21 billion resulting from the acquisition RBC
Royal Bank Jamaica Ltd.
On the other hand, Hardware & Lumber
recorded a significantly lower profit of J$217
million when compared to the J$610 million
earned in the previous year.
Included in the 2013 result was a one-time
credit of J$502 million which was triggered when
the company ended its participation in the
GraceKennedy Group defined benefit pension
plan. Lower gross margins also helped pull down
the 2014 result.
Our second table shows some key figures for
five of its associated companies, two of which
are publicly traded.
All these changes helped PJAM record a pre-
tax profit of J$2.94 billion (2013: J$2.62 billion.
A lower effective tax rate saw net income register
at J$2.85 billion. Of this amount, J$2.84 billion
was attributable to shareholders (2013: J$2.49
billion). This result translated into EPS of J$13.55
The property management and rentals division
generated higher revenues and an improved
profit. At almost full occupancy at most its
properties, this division is expected to do well
in the current year.
The investment division suffered steep declines
in incomes and recorded a small loss. Despite
these challenges, the bulk of its income is still
derived from its share of profits from joint ven-
tures and associates. A one-off negative goodwill
transaction at Sagicor Jamaica helped this division
deliver a strong performance for 2014.
The trust s total assets rose to J$26.4 billion
from J$23.3 billion. The principal component,
investments, increased from J$21.9 billion to
last year s J$24.9 billion. Most of this improve-
ment resulted from the increase in the value of
its investment in associated companies, with
Sagicor Jamaica being the main contributor.
On the other hand, investment securities
declined to J$2.13 billion from the previous level
of J$2.53 billion. Here, the main contraction was
observed with available-for-sale instruments,
which fell to J$1.42 billion from J$1.69 billion.
Lower balances were shown for both equities
and corporate debt.
Total liabilities fell to J$5.0 billion from J$5.21
billion as at December 2013. The major decline
was noted under retirement benefit liabilities,
which sank from J$259.2 million to J$133.9 mil-
lion. This change was due to the improved per-
formance of the pension plan, which no longer
has an unfunded liability. The lower liability
mostly represents contingencies for health and
life insurance coverage.
Excluding non-controlling interests, share-
holders equity rose to J$21.1 billion from the
previous level of J$17.8 billion. The largest con-
tributors were recorded under retained earnings
and investment and other reserves.
With 213,231,978 shares outstanding, each
share had a book value of J$99.12 (2013: J$83.67)
Share price and dividends
On April 2, 2014, the share price was J$49.05
and it reached a peak of J$59.97 on December
30, 2014. Last Tuesday, it was quoted at J$55.06.
During 2014, PJAM paid total dividends of
J$2.65. When related to its most recent price,
this gives a yield of 4.8 per cent.
Interestingly, on March 6, 2015, a related (and
as yet, unidentified) party purchased 24,401,900
shares in PJAM.
Last November, PJAM bought the Oceana
Hotel in downtown Kingston from the Urban
Development Corporation for J$400 million in
cash. The purchase was handled by a PJAM
subsidiary, Jamaica Property Company partnering
with a Canadian developer, Downing Street
Realty Partners. The partners expect that, by
mid-2015, a new re-developed Oceana site will
In a related development, the Trust expects
to open a new Courtyard Marriott Hotel very
soon. Although the Jamaican government con-
tinues to meet IMF targets, this has not yet
resulted in much visible growth. PJAM believes
that opportunities for new investments will
soon become clearer.
These and other events should help ensure
that the trust s profits continue on an upward
trajectory for the foreseeable future.
Sagicor Jamaica's profits boost
Pan-Jamaican Investment Trust Ltd
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