Home' Trinidad and Tobago Guardian : April 27th 2017 Contents Effective November 22, 2016,
Trust Ltd changed its name to
PanJam Investment Ltd (PJAM).
PanJam's largest holding is its
31.56 per cent stake in Sagicor
Group Jamaica Ltd.
Let us now review PJAM's results to December
Changes in financial position
Total assets advanced from J$28 billion to
J$32.44 billion or by 16 per cent.
The investments element rose to J$30.51
billion from J$26.2 billion. The largest com-
ponent, investments in associated companies,
climbed to J$20.9 billion from J$17.8 billion.
Here, Sagicor Jamaica's portion rose from
J$16.1 billion to J$19.2 billion; this improve-
ment was helped by higher profits and im-
proved reserves. This investment has a JSE
market value of J$36.9 billion.
Its investment in Hardware and Lumber Ltd
declined to zero from J$242.2 million, which
reflects the sale of that entity.
Its investments in New Castle Company Ltd,
Caribe Hospitality Jamaica Ltd and Chukka
Caribbean Adventures Ltd all exhibited modest
increases to J$317.6 million, J$360.9 million
and J$397.3 million respectively. The major ad-
dition was an investment (including post-ac-
quisition profit) of J$198 million in Downing
Street Realty Fund V1 Ltd, which is based in
Investments in joint ventures fell to zero
from J$240.6 million; this reflected two trans-
actions, one being the sale of its 50 per cent
in Mavis Bank Coffee Factory, which removed
J$84.5 million. The other deal, valued at J$156.1
million, was the reclassification of its 50 per
cent in Kingchurch Property Holdings Ltd from
a joint venture to a joint operation.
Investment securities climbed by 56.4
per cent to J$3.35 billion from J$2.14 billion.
The largest swing was shown under availa-
ble-for-sale investments, which advanced to
J$2.54 billion from J$1.29 billion. Corporate
debt securities climbed to J$1.15 billion from
J$277 million while equities grew to J$1.21 bil-
lion from J$889 million.
Investment properties increased from J$5.19
billion to J$5.58 billion. This improvement ben-
efitted from the Kingchurch transfer and fair
value gains of J$161.6 million.
The total of other assets improved from
J$1.64 billion to J$1.87 billion, which included
J$718 million for land awaiting development.
Year-end cash and cash equivalents fell to
J$686.9 million from J$940.9 million. The cash
and bank balances component contracted to
J$56.6 million from J$120.1 million while de-
posits climbed to J$499.3 million from J$281.3
million. The other large component, securities
sold under agreements to resell, declined to
J$206.2 million from J$553.9 million.
Total liabilities expanded to J$6.18 billion
from J$5.85 billion or by 5.6 per cent.
Loan liabilities were little changed at J$5.18
billion for both periods. Two commercial notes
matured, one for J$596.9 million in Jamaican
dollars and the other for J$60.2 million in US
Additions for the year were debt to Sagicor
Bank Jamaica Ltd of J$393.1 million and Urban
Renewal Bonds of J$332 million.
Other liabilities rose from J$379 million to
J$636.6 million. The largest components were
dividends payable of J$210.9 million and oth-
er liabilities and accrued expenses of J$223.5
Deferred tax liabilities climbed to J$140
million from J$54.3 million.
Total equity swelled to J$26.3 billion from
J$22.1 billion. Excluding minority interests of
J$588 million, shareholders' equity closed at
J$25.7 billion from J$21.8 billion.
Retained earnings expanded from J$14.5
billion to J$17.5 billion. The brought forward
figure was boosted by comprehensive income
of J$4 billion while dividends consumed J$893
million and a transfer of J$150 million to unre-
alised property revaluation gains lowered the
Investment and other reserves climbed to
J$2.78 billion from J$1.78 billion. This increase
included comprehensive income of J$1.15 bil-
lion subsequently reduced by J$265 million,
which reflected a change in reserves of an
Share capital was unchanged at J$2.14
billion. However, effective May 2016, PJAM
effected a five-for- one stock split, which in-
creased the number of outstanding shares to
1,066,159,890 from 213,231,978.
Adjusting for the stock split and treas-
ury shares, the weighted average number
of shares increased from 1,048,940,000
to 1,050,219,000; consequently, the book
value of each share was J$24.44 versus
J$20.75 as at December 2015.
Income and profit
Total income declined to J$1.74 billion from
J$1.84 billion or by 5.4 per cent.
This shrinkage was most prominent under
the property income category, which fell to
J$1.38 billion from J$1.48 billion. Both rental
income and fair value gains on property val-
uation experienced contractions; the former
closed at J$1.22 billion from J$1.25 billion while
the latter registered at J$161.6 million from
Commissions fell to J$51.6 million from
J$56.6 million while other income closed at
J$69.3 million from J$97.3 million.
In the latter's case, both management fees
and miscellaneous income contracted; the for-
mer ended at J$64.8 million from J$87.1 million
while the latter shrivelled to J$4.5 million from
On the other hand, investment income ex-
panded by 16.3 per cent to J$239.3 million from
J$205.7 million. Included in this category was
impairment charges on investment securities,
which climbed to J$160.8 million from J$39.1
Even so, notable swings were shown under
fair value gains on financial assets through in-
come statement, which advanced from a nega-
tive J$51.7 million to a positive J$155.2 million.
In addition, foreign exchange gains expanded
to J$104.4 million from J$26.2 million.
Operating expenses rose by 3.4 per cent to
J$1.31 billion from J$1.27 billion.
Staff costs declined to J$377.5 million from
J$427.9 million. Although core salaries rose
by J$21.1 million, this fall was hugely helped
by the lower cost of the funded pension plan,
which contracted to J$44.5 million from J$133.8
million. In 2015, the company upgraded the
benefits of its pension plans, which helped
push up that year's costs. The company is
awaiting approval for the wind-up of one of
its pension plans.
The direct costs of property management
increased to J$572.7 million from J$562.5 mil-
lion, while donations exploded to J$72.8 million
from J$29.3 million.
In addition, amortisation charges registered
at J$20.2 million from zero; this reflected the
amortisation of property management solution
software licences, which was bought in 2015.
These movements saw operating profit come
in at J$431.2 million; this was J$143.2 million or
24.9 per cent less than 2015's J$574.4 million.
Finance costs advanced from J$496.4 million
to J$527.2 million.
The share of profit from joint ventures in-
creased to J$53.3 million from J$34.2 million.
The entire 2016 figure represented its share
of profit from Mavis Bank prior to the sale of
that company, while the 2015 value was Ma-
vis Bank's profit of J$47.6 million reduced by
Kingchurch's loss of J$13.4 million.
The share of results from its associated
companies advanced by 14.1 per cent to J$3.64
billion from J$3.19 billion. Mainly, this repre-
sented the profit from Sagicor Jamaica (J$3.52
billion) along with the contribution from New
Castle Company (J$67.6 million), while other
entities comprised the remainder.
Gains on disposal of associated and joint
venture companies registered at J$851.1 mil-
lion from zero in 2015. The profit on the sale
of Mavis Bank Coffee Factory accounted for
J$665.6 million while that from the sale of
Hardware and Lumber Ltd was J$185.5 million.
These changes resulted in pre-tax profit of
J$4.45 billion compared with J$3.30 billion
The effective tax rate climbed from 1.53 per
cent to 2.24 per cent, while actual taxes rose
from J$50.6 million to J$99.9 million. The tax
calculation benefited from two key deductions.
Income not subject to tax was J$242 million,
which included the exemption for the profit
on the sale of two companies.
Also, a deduction of J$924.1 million repre-
sented taxes paid by associates (mainly, Sagicor
Jamaica) and joint venture companies, which
is included on a net basis.
Consequently, the after-tax result came in
at J$4.35 billion. Of this sum, J$301.2 million
related to minority interests leaving share-
holders with a profit of J$4.05 billion (2015:
These results translated to EPS of J$3.86
compared with J$3.04 for 2015.
In line with its lower revenues and higher ex-
penses, the property management and rentals
segment recorded reduced profits.
PJAM's portion of Sagicor Jamaica's profit
climbed by J$463.3 million, advancing from
J$3.05 billion to J$3.52 billion. This improve-
ment accounted for the bulk of the J$604.7
million net profit increase under the invest-
The growth in investment income by J$33.6
million also contributed to this result.
The huge spurt in profit shown under other
services was helped by the profit on the sale
of Mavis Bank Coffee Factory and Hardware
Eliminations represented the interest
charged to the subsidiaries for their use of
Share price and dividends
On the JSE, PJAM's share price closed at
J$94.00 (post-split J$18.80) on December
31, 2015. As the target date for the stock split
drew closer, its price jumped to J$125.87 on
May16, 2016. When the 5-for- 1 stock split
became effective, the price adjusted to J$24.23
on May 27, 2016.
The price ended 2016 at J$28.32, which re-
flected a one-year appreciation of 50.6 per
cent. In 2017, the share ended at J$40.47 on
February 13, but recently closed at J$35.00.
Total dividends paid in 2015 were J$0.57. In
2016, regular dividends increased to J$0.65;
in addition, a special dividend of J$0.20 was
declared in December and paid on January
Relating the total 2016 dividend of J$0.85 to
the recent price of J$35.00, the yield is 2.43 per
cent. That price also reflects a P/E multiple of
9.07 and price to book value of 1.43.
PJAM paid its first interim dividend of J$0.20
for 2017 on March 30.
In next week's article, we will review ANSA
Merchant Bank Ltd 2016 results.
APRIL 27 • 2017 guardian.co.tt BUSINESS GUARDIAN
STOCKS | BG15
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