VM Group has entered into a partnership agreement with the Private Sector Organization of Jamaica (PSOJ) to convert its 39 Hope Road offices into a new commercial hub with rental spaces, from which it will generate additional revenue.

The development will consist of four upper levels with a lobby area, basement and ground floor parking. Additionally, a rooftop amenity area will be available for tenants to use for a variety of activities.

The redevelopment of the property is estimated to cost $1 billion. VMWM will provide the financing for this landmark development jointly with VM Pensions Management.

John Mahfood Chief Executive Officer and Director Jamaican Teas Limited has released the following report for  the Second Quarter Results to March 2024

Jamaican Teas Limited is pleased to report growth of $218m in its adjusted profits before tax for the half year to 31 March 2024 from $13.4m a year ago to $231 million this year before deducting a nonrecurrent loss of $92.49 million from the sale of its Bell Road factory in March 2024.

Manufacturing Division | Manufacturing revenues increased 11 percent in the quarter and 8 percent for the half year driven principally by a strong performance in the domestic market where revenues grew by 8 percent in the quarter and 18 percent for the half year. This performance was strongly influenced by the appointment of Wisynco as our new distributer for Jamaica on November 1, 2023. Export sales grew by 5 percent in the quarter and 3 percent for the half year.

Real Estate Division | No real estate sales were booked in the year ago quarter or half year as construction work on our new studios at Belvedere Road, in Kingston was still underway up to March 2023. Construction of this complex finished in Sept 2023 and sales of 7 units have been completed in the year to date.

Retail Division | For this quarter, retail revenues increased 11 per cent. This reflects a continuation of the accelerated revenue growth we have seen in our store in recent months. Our retailing profits increased by approximately 8 percent for the half year.

Investment Division | During this quarter, there was a reversal of the declines in the prices of stocks listed on the Jamaica Stock Exchange. The prices of stocks listed on USA Stock Exchanges continued to increase in the quarter. This resulted in significant unrealised gains in our overseas investments without a repeat of the offsetting investment losses on the local portfolio experienced in the year ago period.

Following from this, QWI Investments Limited (QWI) reported a pre-tax profit of $74 million for the quarter, a $102m reversal from their year ago loss of $28m. This builds on the positive trend seen in the first quarter, and resulted in a $238 million increase in the group’s total investment income for the half year.

REVENUES

JTL’s total revenues for the quarter increased by $134 million or 20 per cent overall from $666 million a year ago to $800 million this quarter. $86m of this increase reflected the absence of real estate revenues in the year ago period, as noted above. The half year revenues reflected a similar trend.
The increases shown in Investment Income mainly reflect the realized and unrealized overseas investment gains of QWI, partially offset by slightly lower dividend income and increased foreign exchange losses compared with the year ago period.

EXPENSES

Cost of sales moved from 78 percent of revenues a year ago to 80 percent this quarter. This apparently adverse trend is a reflection of low margin real estate sales this year versus no real estate sales a year ago. Adjusting for this year’s real estate sales, the gross profits of the manufacturing and retail divisions actually improved from 22.0 per cent to 22.5 percent in the quarter. The year to date gross profits showed a similar improvement.

A loss before deferred tax of $92.49 million was recorded on the sale of the Bell Road factory in March 2024. This is a non-recurrent expense and compares with the net revaluation surplus of $257.25 million recorded in prior financial years on the revaluation of this building between its acquisition and it’s disposal in March 2024. This surplus was forms part of the revaluation reserves in the company’s equity capital.

During the quarter, overhead costs increased slightly. For the year to date, the increase in overhead costs largely reflected increased costs for insurance and professional fees. The increase in interest expense during the quarter resulted from higher interest rates as well as increased short term borrowings by Jamaican Teas.

NET PROFIT

Net profit attributable to Jamaican Teas for the quarter after adjusting for the loss on the sale of the Bell Road factory was $73 million, a sharp increase from the $59 million profit in the same quarter of the previous year. Adjusted net earnings per share was 3.39 cents (2022/23 – earnings of 2.7 cents). The unadjusted net loss attributable to Jamaican Teas for the quarter was $18.99 million or 0.9 cents per share.

For the year to date, net profit attributable to Jamaican Teas after adjusting for the loss on the sale of the Bell Road factory was $114 million, a sharp increase from the $86 million profit in the previous year.

Adjusted earnings per share was 5.3 cents (2022/23 – earnings of 4.0 cents). The unadjusted Net profit attributable to Jamaican Teas for the year to date was $21.67 million or 0.9 cents per share.

FINANCIAL POSITION

The net decrease in fixed assets of $162 million since September 2023 is due mainly to the sale of the Bell Road factory building in March 2024 offset, in part, by the purchase of, and capital improvements and machinery purchases at, the Temple Hall factory.

The company moved its spice and dry pack production from leased premises at Montgomery Avenue to our Temple Hall factory in Feb 2024 and the tea division will be relocated during the third quarter of this financial year reuniting all the manufacturing activities into one facility.

The reduction in Investment properties since September 2023 reflects the sale of one of our buildings at Harbour Street, Kingston during the period. Efforts are continuing to sell the two remaining buildings at Harbour Street along with two other investment properties.

Housing inventories fell by $173 million due to the sale of the first seven units at Belvedere, while other inventories and receivables increased during the half year reflecting the increased scale of operations in our manufacturing activities.

OUTLOOK

In the half year to March 31 2024, the group has:
-purchased a new factory at Temple Hall and sold its Bell Road facility (subject to a short term lease back)
-transferred its manufacturing activities from Jamaican Teas Limited to Caribbean Dreams Foods Ltd, its wholly owned subsidiary
-installed two new co-General Managers at its manufacturing Division
-acquired new spice packing machinery that will facilitate a tripling of Saizon production adding up to $80 million in annual gross profit
-begun the process of exiting its real estate activities

In the next 6 months the group will complete its transfer from Bell Road to Temple Hall and continue the divestment of its real estate holdings. This is expected to make the group more cost efficient, better focused and more profitable. While many of the geopolitical developments taking place around the world are discouraging, the group is optimistic about its future.

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Chairman of the Jamaica Social Investment Fund (JSIF), Dr. Wayne Henry, says the construction industry is one of the key growth pillars of the economy.

“This is evident in the Sector Plan for Construction, one of the 31 sector plans that form the foundation for the Vision 2030 Jamaica – National Development Plan,” he noted.

Dr. Henry, who was addressing a recent JSIF contractors’ seminar at the Courtyard by Marriott in New Kingston, noted that at the time of drafting Vision 2030, it was envisioned that the country would develop a dynamic and internationally competitive construction sector, with the flexibility and creativity to adopt new construction technologies that may emerge over the long-term.

As such, he said, it is imperative that contractors remain on the cutting edge of construction innovation through important knowledge exchanges.

The seminar on project planning and execution was targeted at contractors who wish to bid for JSIF’s proposals on national infrastructure projects.

It provided an avenue for participants to learn more about the requisite construction practices and procurement guidelines.

Managing Director of the JSIF, Omar Sweeney, in his remarks, said that the construction industry is a major economic driver.

Managing Director of the JSIF, Omar Sweeney

He said that the sector is a vital component of the country’s development and infrastructure growth and has a high demand in the areas of residential and commercial spaces.

Noting the critical link with other sectors, Mr. Sweeney said that the success of any building project relies on collaboration among key stakeholders such as engineers, architects and quantity surveyors.

“Hence, it is imperative to foster open communication and continuous dialogue through effective fora such as this seminar,” he noted.

Mr. Sweeney said that for over 27 years, JSIF has maintained its position as a leading project management agency and has consistently implemented hundreds of solid infrastructure development projects.

He noted that the entity executed projects amounting to more than three billion dollars during a one-year period.

These are largely funded by the Government of Jamaica, World Bank, The European Union and the Caribbean Development Bank, Mr. Sweeney noted.

JSIF is an agency of the Government of Jamaica with portfolio responsibility for the implementation of several major infrastructure projects across Jamaica, predominantly in vulnerable communities.

By: BRITNEY STEVENS, JIS March 18, 2024

Photo JIS File

Ian Parsard Chairman For 138 Student Living Jamaica Limited Has Released The Following Unaudited Financial Statements For The Twelve Months Ended 30 September 2023

For the twelve months ended September 30, 2023, short-term rental income contributed J$132.19 million or 9% of total revenue. This reflects a 39% increase relative to the similar period ended September 30, 2022. This revenue was generated primarily from sporting and UWI affiliated groups. Accordingly, the Company continues to deepen its focus on the group booking segment which is showing buoyant demand.

The Group recorded J$94.43 million in other operating income, an increase of J$80.54 million which was derived from interest charged on receivables. Other operating income represented 7% of total revenue.

The Group’s enhanced revenue performance resulted in an operating profit of J$703.17 million for the twelve months ended September 2023 from J$698.54 million in the corresponding prior period. Despite the 37% increase in administrative expenses, which included $12.09 million relating to the Additional Public Offering,

138SL’s efficiency ratio improved from 42% to 49% year over year. Profit before taxation increased to J$342.30 million for the twelve-month period ended September 2023 when compared to J$335.05 million for the twelve-month period ended in September 2022.

Profit per stock unit for the twelve months increased to $0.80 compared to $0.77 for the twelve-month period to 30 September 2022, a 4% increase.
Demonstrative of the Board of Directors intention to return value to its Ordinary Shareholders, 138SL paid its first dividend in February 2023 of J$0.13 per share.

Shareholders’ equity increased by J$310.50 million to end the fourth quarter of 2023 at J$4.87 billion. This increase was primarily driven by the increase in retained earnings which reflected the J$53.89 million dividend payment deducted from the J$330.91 million net profit.

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Dr Ike Johnson, Executive Vice President and Chief Operating Officer of the Sygnus Group has released the following Unaudited Results for the 3 Months Ended November 30, 2023 for Sygnus Real Estate Finance Limited.

Belmont Road 9-storey commercial tower

The Group continued to unlock value from its major real estate investment assets (“REIAs”) by achieving another set of key milestones namely: achieving practical completion for the J$3.70 billion Belmont Road 9-storey commercial tower in December 2023 and starting the process to monetize SRF’s partial investment exit; advancing SRF’s investment exit on the built-to-suit industrial warehouse facility on Spanish Town Road to 83% by harvesting J$388.68 million from sale proceeds during the quarter; and advancing the value creation process for two major strategic projects, namely Mammee Bay in St Ann and Lakespen in St Catherine.

SRF’s book value per share was J$23.48 for 3 Month FY 2024, up 3.4% versus J$22.71 the financial year prior.

The Group is expected to complete real estate projects in excess of J$5.3 billion in the current financial year. SRF has entered the final stages of its first investment life cycle, while simultaneously moving into its second investment life cycle, primarily focused on its two largest strategic investment assets.

The overlap of these two investment cycles is likely to result in an initial slowdown of investment deployment activity through the first part of this financial year, followed by a substantial increase in capital redeployment during the latter half of the financial year through to the 2025 financial year.

At a meeting of the Board of Directors on December 27, 2023, the Directors approved the issuance of payment-in-kind ordinary shares (“PIK shares”) at a price of J$18.25 to the Investment Manager valued at J$377.91 million and the issuance of subscription warrants valued at J$377.91 million to ordinary shareholders at a price of J$18.25 per J$ ordinary share and US$0.12 per US$ ordinary share.

The PIK shares represent a debt-for-equity conversion for J$377.91 million. The PIK shares and warrants are subject to final approval at SRF’s annual general meeting to be held on March 21, 2024.

For 3 Month FY 2024, total investment income or core revenues was negative J$30.96 million compared to J$21.33 million for the three months ended November 30, 2022 (“3 Month FY 2023). This was primarily driven by higher interest expense relative to the comparable period last year, as well as reduced interest income from a lower REIN balance after exiting high yielding REINs during the previous financial year.

As a result of the exits, the weighted average fair value yield on REINs was 8.9% compared with 11.2% last year. The weighted average cost of debt was 7.2% compared with 6.1% last year, reflecting higher market interest rates.

The share of gain on joint ventures, which captures SRF’s 70.0% ownership of the One Belmont development, amounted to a loss J$302.26 thousand for 3 Month FY 2024 compared to a gain of J$146.37 thousand last year. This loss was driven by audit fees and foreign exchange losses recorded during the period by Monadh Rois Holdings Limited.

SRF’s total investment income is comprised of all activities that are involved in the unlocking of value from its portfolio of real estate investment assets, namely: interest income, lease income and commitment fees related to REINs; gain or loss on property investments or on any real estate assets that were exited; and share of gain or loss on its joint venture investments.

Based on the nature of its business model, SRF’s earnings during interim reporting quarters may experience “lumpiness” in total investment income and net profits, which is typically normalized at the end of each financial year, as demonstrated at FYE Aug 2023 relative to the interim quarterly results.

The Group uses independent appraisers to value its investment property assets annually. All investment properties are USD investment assets which are converted to JMD for financial reporting purposes. SRF’s key strategic assets are held via wholly owned subsidiaries or joint ventures.

Net investment income or core earnings for 3 Month FY 2024 was negative J$114.89 million versus negative J$82.36 million last year.

The reduction was mainly attributable to the negative total investment income of J$30.96 million relative to positive total investment income of J$21.33 million last year.

For FYE August 2023, SRF generated J$312.58 million in net investment income.

Net loss attributable to shareholders for Q1 2024 amounted to J$132.98 million, representing an improvement of J$39.52 million versus a net loss of J$172.50 million last year.

Basic earnings per share (EPS) was negative J$0.41 for Q1 2024 relative to negative J$0.53 last year, while diluted EPS was negative J$0.38 for Q1 2024 compared to negative J$0.49 last year. Similarly, basic core earnings or net investment income per share (NIIPS) was negative J$0.35 for Q1 2024, compared with negative J$0.25 last year. At FYE Aug 2023, SRF’s return on average equity was 2.7% for the year with a 4-year average ROE since inception of 22.9%.

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