Highlights From Seprod Limited (SEP) – Unaudited Financial Statements for the 3rd quarter ending September 30, 2024

Q3 performance (July-September 2024)
For the three (3) months ended 30 September 2024 (Q3), the Seprod Group achieved revenues of $35.10 billion, an increase of $7.35 billion (27%) over the corresponding period in 2023.

Gross profit closed at $9.80 billion, an increase of $1.76 billion (39%) above the corresponding period in 2023.

The net profit was $828 million, a decrease of $154 million (16%) versus the corresponding period in 2023 when profits were boosted due to a non-recurring gain of $363 million on net profit and $442 million on other comprehensive income in respect of the restructuring of A.S. Bryden’s post-employment medical plan.

Effective 9 July 2024, A.S. Bryden & Sons Holdings Limited (ASBH) acquired 44.8% of the share capital of Caribbean Producers (Jamaica) Limited (CPJ), a company incorporated and domiciled in Jamaica which is a leading food and beverage distributor for major global brands with a focus on serving hotels and resorts in Jamaica and St.Lucia. CPJ’s results have been consolidated in these financials.

Q3 year-to-date performance (January-September 2024)
For the nine (9) months ended 30 September 2024 (Q3 year-to-date), the Seprod Group achieved revenues of $93.43 billion, an increase of $11.23 billion (14%) over the corresponding period in 2023.

Gross profit closed at $24.72 billion, an increase of $3.86 billion (19%) above the corresponding period in 2023.
The net profit was $2.97 billion, a decrease of $551 million or 16% versus the corresponding period in 2023.
The less than the usual stellar performance was influenced by a definite slowness in the economy post the Beryl hurricane in July plus the USA travel advisory to Jamaica that led to a material reduction in the hotels’ occupancy rates.

Outlook
 The Group anticipates a strong last quarter performance from ASBH as we enter the Christmas season and Carnival band launches.
 ASBH had no profit uplift from CPJ in this quarter, this will turn around in Q4 as the winter tourist season gets going in Jamaica, with the hotels already reporting stronger booking than last quarter experience.
 Seprod’s export is at 20% growth this year and that will close the year even higher.
 Seprod’s Jamaica business is banking on overcoming the sluggishness in the retail space, coupled with reducing cost and improving productivity.

As we look to the last quarter of the year we remain optimistic that we will produce a strong performance that will enable us to partially close the YTD gaps.

Richard R. Pandohie Chief Executive Officer Seprod Limited (SEP)

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Following the challenges highlighted in Q1 and Q2, EduFocal Limited has continued to navigate a complex operating environment, marked by a decline in revenue and profitability. Management remains committed to the strategic plan laid out in the first half of 2024, with a focus on stabilizing the business, optimizing costs, and repositioning EduFocal for sustainable growth. This quarter, significant progress has been made in implementing our cost-reduction strategies, enhancing our technology platforms, and exploring new revenue avenues.

Progress on Strategic Initiatives

Revenue Diversification and Growth Initiatives
To counter the decline in traditional revenue sources, EduFocal has accelerated efforts to diversify its revenue base. The company has focused on expanding its educational services into new markets and exploring strategic partnerships to enhance its reach. These initiatives aim to build a more resilient revenue model, with an emphasis on recurring revenue streams.

While the impact of these efforts on Q3 results remains limited, early indicators are promising, and management is optimistic that these initiatives will contribute to revenue stabilization in the coming quarters. We are also actively pursuing opportunities to monetize our proprietary technology platforms through licensing agreements, adding a new dimension to our growth strategy.

Operational Efficiency and Cost Optimization
EduFocal’s cost optimization program has yielded measurable results in Q3. A thorough review of our cost structure led to a leaner operational model, with targeted reductions in administrative expenses. The recent workforce restructuring, which was implemented to align our operating expenses with revenue levels, has contributed to this cost-saving initiative. The savings realized from these actions are being reinvested in high-priority areas such as technology and market expansion, ensuring that we remain competitive in our core offerings.

Management continues to assess other areas for potential cost efficiencies. This ongoing review aims to build a more agile and efficient organization, capable of adapting to shifting market conditions while maximizing profitability.

Technology Advancements and Platform Enhancements
EduFocal has completed a significant upgrade to its “Amigo” platform, designed to improve user engagement, retention, and satisfaction. These enhancements are expected to strengthen our competitive position by offering a more robust, interactive, and personalized learning experience. Feedback from early adopters of the upgraded platform has been encouraging, and we are working to expand its features to cater to a broader user base. The technological improvements align with our shift towards a recurring revenue model, where user engagement is critical to maintaining steady income streams. By continually enhancing our platform, we aim to attract new users and retain existing ones, laying the groundwork for long-term growth.

Debt Management and Cash Flow Stabilization
EduFocal’s cash flow constraints, highlighted in the previous quarters, remain a key area of focus.
The company has made progress in managing liquidity through improved working capital practices. We have tightened controls on receivables and are engaging in more proactive cash collection efforts to ensure timely inflows. Additionally, management continued to have discussions to refinance our existing debt under more favorable terms, which should reduce interest expenses and ease cash flow pressures.

In Q3, we also implemented a series of cash conservation measures, deferring non-essential capital expenditures and focusing on core projects with high potential for immediate impact. These steps are critical in stabilizing our cash position as we work towards a more sustainable capital structure.

Q3 Financial Performance Highlights
Revenue
Revenue for Q3 2024 was J$21.79 million, significantly lower than the J$46.86 million in the same quarter of 2023. This decline reflects our ongoing transition to a more predictable and resilient revenue model focused on recurring income. While this shift has temporarily impacted our topline, management believes it is essential for building long-term stability.

Operating Expenses
Operating expenses have been better aligned with our current revenue base as a result of recent restructuring. Administrative expenses were kept under control through cost-saving initiatives, including renegotiated vendor contracts, management of staff costs and streamlined processes. However, these savings have been offset in part by investments in technology, which are essential for future growth.

EBITDA and Net Profit
EduFocal’s EBITDA remains negative, underscoring the impact of the revenue decline on profitability. However, the adjusted EBITDA loss has been mitigated by cost optimization measures, suggesting early signs of improvement in operational efficiency. Net profit remains under pressure, but management expects that revenue diversification and operational improvements will yield a gradual recovery.

Outlook and Forward-Looking Statements

Focus on Revenue Rejuvenation and Growth
EduFocal’s primary goal for the upcoming quarters is to stabilize and grow revenue. The expanded “Amigo” platform, coupled with strategic partnerships and market expansion initiatives, is expected to drive incremental revenue gains. Management is also exploring ways to leverage data analytics to better understand user behavior, which will help refine our offerings and maximize customer lifetime value.

Gordon Swaby
Chief Executive Officer EduFocal Limited (LEARN) 

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EduFocal Limited (LEARN) Unaudited Financial Statements for the Third Quarter Ended September 30th, 2024

Third Quarter Performance

• Net Profit after Tax of $194.9m was 255% greater than the prior year comparable quarter.
• Earnings per share of $0.28 cents reflected an increase of 250% compared to the corresponding quarter in 2023.
• The Return on Equity was 7.1% as against 2.3% in 2023 representing an improvement of 208.7%.

Income
Total Income for the JSEG of $746.4m, represents a $232m (45.1%) increase over the corresponding quarter of 2023. The increase in Income is attributed to Cess which increased by $138.6m (249.7%) when compared to prior year. Fee Income and eCampus increased over prior year by $94.7m (22%) and $3.4m (51.5%) respectively.

Expenses
Total Expenses of $495.9m increased by $76m (18.1%) when compared to the corresponding quarter in 2023. The main expenditure contributing to the increase are as follows:
• Staff Cost was above 2023 comparatives by $14.6m (7.2%). This was due to an 8% cost of living increase and new staff hires to facilitate anticipated growth and enhanced customer service delivery.
• Advertising and Promotion was above 2023 comparatives by $8.3m (50.3%). This is mainly due to additional activities aimed at stimulating growth within the markets.
• Net impairment loss on financial asset was above prior year by $10.7m (110.4%) due to the requirements of the expected credit loss model.

Net Profit
Net Profit after Tax of $194.9m represents an increase of $140m (255%) when compared to the profit of $54.9m for the corresponding period in 2023.

Financial Position
Total JSEG Assets as at September 30, 2024, of $3,365.3m, reflects an increase of $411.8m (13.9%), when compared to holdings as at September 30, 2023, due primarily to increase in Trade and Other Receivables and Government Securities Purchased Under Resale Agreement.

Total Equity of $2,739.8m as at September 30, 2024, reflects an increase of $331.3m (13.8%) and $120.8m (4.6%) over the comparable positions at the end of September 30, 2023, and December 31, 2023, respectively.

Revenue Reserves reflect an increase of $125.3m (7.4%) over the position as at December 31,2023, which is net of $239.1m paid to shareholders as dividend and the nine months’ profit.

Market Developments & Outlook
The Third Quarter performance has been particularly good. We anticipate that as interest rates trend down and other market turbulences subside, investors and companies will be more active in the market, which will result in improved performance. We have made significant stride in our diversification strategies, and this has and will continue to support us as we cope with geo-political unrest and other uncertainties in the economy that have impacted the market.

The JSEG will continue our effort at ensuring that our governance framework is strong and our risk mitigating measures which assists in driving sustainability are robust. We remain resolute in our commitment to maximize shareholders’ wealth, through the improvement in income and the management of our expenditure while providing strong support to stakeholders and the country at large.

Marlene J Street Forrest Managing Director Jamaica Stock Exchange Group
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Net profit after tax (“NPAT”) for Q4 FY24 increased by 200% to $999 million, bringing NPAT for FY 2024 to $3.9 billion, 14% ahead of 2023. The improvements achieved in Q4 FY24 reflected the effects of management’s strategy to influence improvements in operating revenue through a focus on active balance sheet management, revenue diversification and expense management, in particular the management of funding costs.

Revenue growth in Q4 FY24 was both robust and well-distributed, led by an exceptional performance in our Treasury, Trading and Brokerage business line, which accounted for 56% of total revenue. This improvement was supported by the continuation of the uptrend in net interest income which rose 3% to $164 million relative to the comparable quarter in financial year 2023.

Directionally, this performance aligned with expectations, buttressed by a pivotal shift in the monetary policy stance of the Bank of Jamaica and the US Federal Reserve, both of which reduced their benchmark policy rates by 25 and 50 basis points respectively, during the fourth quarter. While an additional 25 basis point cut was announced at the end of September, to come into effect at the beginning of October, the BOJ had communicated a shift in its policy posture during Q3 FY24, to which the market began to react via the downward repricing of liabilities, by extension, benefitting our Net interest income. The balance of risks points towards continued improvement in our net interest income as our interest-bearing liabilities reprice with a more frequent cadence.

The macroeconomic landscape has also evolved favourably. Domestic inflation has moderated, now averaging within the BoJ’s target range for the last 6 months, and a similar moderation has taken hold in the U.S.A., even as the Federal Reserve continues to signal a cautious, data-driven approach to future rate cuts. While these developments suggest a more stable financial environment prospectively, potential global risks remain. Slowing growth in key global markets, coupled with geopolitical uncertainties and the impending change in administration following the recent election in the US could introduce volatility; however, Barita’s diversified revenue streams and resilient business model position us well to navigate these headwinds.

Operating Performance
Barita generated net operating revenues of $10.0 billion for FY24, representing an increase of 10% or $901 million relative to FY23. The increase was broadly distributed across our various business lines, with income from the treasury, trading and brokerage and investment banking business lines being the largest contributor.

Net profit was $3.9 billion for FY24, rising 14% relative to FY23. The resulting earnings per share (“EPS”) was $3.24, up 14%.

Quarterly Performance
For the quarter ended September 30, 2024, Barita registered revenue of $3.0 billion, $1.2 billion or 72% higher than Q4 FY23, driven by a material uplift in the Treasury, Trading and Brokerage business line during the quarter. In the quarter, Barita produced NPAT of $999 million, $667 million (200%) higher than the prior year. This resulted from the aforementioned higher operating revenue, partially offset by a 26% or $346 million increase in operating expenses. Profit before taxation amounted to $1.3 billion, which was an improvement of $888 million or 207% relative to the prior year.

Shareholders’ equity closed the period at $35.5 billion, an increase of $71 million, marginally higher than the $35.4 billion outturn at the end of FY23. This was driven by an improvement of $734 million in the fair value reserve, offsetting the decline in retained earnings due to dividends declared and paid during the year. Our capital levels remain resilient, with capital adequacy of 25.45% compared to the FSC’s early warning level of 14%.

Investment Strategy & Capital Management: Our Outlook
The outlook for monetary policy continues to evolve over the course of the fourth quarter of FY24, transitioning from the tightening cycle that has dominated the past two years. Both the Bank of Jamaica (BoJ) and the Federal Reserve, along with other major Central Banks, have reduced their policy rates amidst a sustained moderation in inflation. This shift is expected to lay the groundwork for a more favourable investment environment in the coming quarters.

In the United States, recent economic indicators suggest that the cooling effect of tight monetary conditions has begun to take hold. Core PCE inflation has moderated to 2.7% from a pandemic peak of 5.7% in February 2022. Unemployment remained low at 4.1% in September but has attracted more focus from policymakers at the Federal Reserve given the upward trend since the beginning of 2024. The U.S. economy delivered solid GDP growth of 3.0% in the second quarter of 2024, exceeding expectations, but leading indicators continue to suggest potential weakness ahead. Against this backdrop, the Fed opted for a 50-basis point rate cut in September 2024, bringing the federal funds target range to 4.75%-5.00%. Markets have since priced in the expectation of further rate cuts as inflation trends towards the Fed’s 2% target.

Locally, Jamaica has seen similar progress. Annual headline inflation in Jamaica stood at 5.7% as of September 2024, back within the BoJ’s target range following the uptick in August to 6.5% due to the impact of Hurricane Beryl. Moreover, the BoJ’s recent cumulative reduction of its policy rate by 50 basis points to 6.50% during the quarter, reflects growing confidence that average inflation will remain within the target range in the near term, supported by stable domestic demand, a relatively stable exchange rate, and the continued moderation of global commodity prices. Jamaica’s economy remains resilient, albeit with moderating growth in key goods-producing and service sectors.

Looking ahead, we anticipate a further shift toward more expansionary monetary conditions, both locally and globally, which will likely enhance our ability to optimize our balance sheet and improve the net interest margin. As funding costs stabilize and earning assets continue to reprice upward, we expect to see a positive impact on our financial performance. Additionally, more favourable market conditions should provide increased opportunities for trading gains, and we foresee a gradual acceleration in deal-making activity, further boosting revenue growth.

However, we remain cognizant of the risks that persist in the global macroeconomic environment. Slowing growth in key global markets, coupled with geopolitical uncertainties and the impending election in the world’s largest economy, may introduce volatility that could impact our investment activities. Despite these headwinds, we continue to prioritize the diversification of our revenue streams, particularly through our alternative investment platform, which includes our real estate ventures that are poised to deliver significant returns in the medium to long term.

In this context, prudent capital management remains central to our strategy. We will continue to ensure strict compliance with regulatory requirements while maintaining the flexibility to capitalize on emerging opportunities. Through these efforts, we are confident in our ability to navigate the evolving economic landscape and deliver sustained value to our shareholders.

Mark Myers, Chairman Barita Investments Limited (“Barita” or “the Group”)

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This quarter, Visual Vibe’s strong performance has been instrumental, reinforcing its pivotal role within Kintyre Holdings’ portfolio. Additionally, we are now unlocking value from our strategic investments in key properties, which are contributing positively to our income and strengthening our position as a dynamic investment holding company committed to delivering sustained value to our shareholders.

Change of Name & Purpose of the Business
At our Annual General Meeting (AGM) held in October 2024, the company officially rebranded from iCreate Limited to Kintyre Holdings (JA) Limited. This name change reflects our shift in purpose to an investment holding company, better aligning with our broader business strategy.

We are transitioning from a digital and creative training company to a diversified investment holding company.

This rebranding reflects our expanded focus across various sectors and strategic ventures, marking a significant shift in our corporate trajectory. Additionally, our purpose has been updated to reflect this new direction, positioning Kintyre Holdings as an investment holding company designed to foster sustainable growth across industries.

Financial Overview
Kintyre Holdings achieved strong growth in Q3 2024, driven by strategic investments and Visual Vibe’s expanding success in addition to gains from our investment assets.

Operational efficiency has improved, contributing to robust financial performance.

The Group is positioned for steady growth and profitability. Quarterly revenue reached $56.6 million, a 59.3% increase over Q3 2023, with year-to-date revenue at $128.4 million, up 57.5% year-over-year.

• REVENUE: Q3 2024 revenue reached JMD 55.1 million, up 59.3% from Q3 2023. Year-to-date revenue stands at JMD 123.4 million, showing a 57.5% increase over the same period in 2023, driven by strong performance in digital advertising.

• OPERATING PROFIT: Q3 2024 operating profit rose by 718.9%, from a loss of JMD 4.2M to a profit of JMD 26.2M. Year-to-date improved by 126.3%, from a
loss of JMD 126.4M to a profit of J$33.3M, driven by operational improvements and non-occurrence of one-off acquisition costs in 2023.

• Visual Vibe Operating Profit YTD 2024 vs YTD 2023: Year to date, Visual Vibe has posted a 46.8% increase in Operating Profits, bolstered by expanding its
network and introducing new advertising products like the backpack billboards and indoor digital screens.

• NET PROFIT: The Net profit for the parent company (Kintyre Holdings) Q3 2024 was JMD 21.4 million, an improvement from the loss of JMD 13.9 million recorded in Q3 2023.

• Year-to-date Net Profit stands at JMD 20.4 million, representing a significant improvement from the net loss of JMD 150.1 million in 2023. The positive shift in
net profit is attributed to the increased revenue from the DOOH advertising segment, greater control over operating expenses. YTD 2023 also had one-off acquisition related costs that weighed heavily on Net Profits.

• BALANCE SHEET: Total assets stood at JMD 564.7 million, down 19% year-over year, due to a reduction in goodwill and investments in assets. Total liabilities decreased by 40% to JMD 225.6 million, strengthening the company’s financial position.

Strategic Partnerships & New Business Initiatives
• New strategic partnerships for indoor advertising have been secured across the island, positioning Visual Vibe as a major player in the digital out-of-home advertising space.

• In addition, Kintyre Holdings has successfully partnered with SportsMax as their official out-of-home advertising partner for the 2024 Olympics. We showcased live streams of key races on our Hope Road, Spanish Town, and North Parade screens, reaching a wide audience and positioning our brand prominently during this high-profile event.
Physical and Technology Upgrades

• Visual Vibe upgraded its Manor Park screen to the latest technology, enhancing content quality and engagement.

• Yello Partnership: iCreate partnered with Yello to support SMEs by developing an affordable option for outdoor advertising, making high impact marketing accessible to smaller businesses across the region.

Impact of Hurricane Beryl
• Hurricane Beryl caused electrical outages and screen damage in remote areas, but we collaborated with JPS to use our screens for critical updates on rehabilitation efforts. This partnership minimized the storm’s impact and highlighted Visual Vibe’s role in community support during crises.

OUTLOOK
As we approach Q4 2024, Kintyre Holdings is focused on maintaining the growth momentum achieved in Q3. We are expanding our offerings, particularly through iCreate Institute’s new educational products, which will enhance our training services in the growing digital economy.

This expansion aligns with the increasing demand for innovative and agile upskilling
solutions.

Looking ahead, Kintyre Holdings is committed to operational efficiency, optimizing our assets, and driving cost-effective growth. We will continue to focus on executing our long-term strategy, ensuring profitability, and exploring new opportunities in key sectors to further strengthen our market position.

2024
Sustained Revenue Growth and Profitability:
• Target a 20% revenue increase in the second half of 2024 through expanded digital advertising and increased enrollments at iCreate Institute.
• Reach a net profit margin of 20% by optimizing operations and focusing on high margin business lines.

Expansion of Digital Advertising Network:
• Add 10 new indoor locations to our Digital Out-Of-Home (DOOH) network, leveraging partnerships that have been secured

Digital Transformation of iCreate Institute:
• Launch new courses and upgrade the learning management system to boost enrollment and enhance the student experience.

Strengthening Customer and Partner Relationships:
• Deepen existing partnerships, secure three new strategic partnerships, and achieve a 90% customer satisfaction rate by year-end.

Operational Efficiency and Cost Management:
• Reduce administrative expenses as a percentage of revenue from 60% to 50% by streamlining processes and adopting new technologies.

Corporate Social Responsibility and Community Engagement:
• Focus on creative talent development, digital literacy, sustainable business practices and promoting charitable causes.

Risk Management and Strategic Flexibility:
• Continue monitoring market trends, adjusting strategies as needed, and maintaining robust risk management to ensure stability and growth.

Tyrone Wilson Executive Chairman Kintyre Holdings (JA) Limited

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