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Cover Story : The Battle for Control of Salada Foods

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A deal that left more questions than answers

What did Donovan Lewis, Chairman of Three Bears see in Salada Foods that nobody else saw? How about a pre-tax profit of JA$482,906,847.38

The latter part of 2008 saw Christopher Berry, Chairman of Mayberry Investments and Donovan Lewis, Chairman of Three Bears in a one sided battle for control of Salada Foods. What did they see and know that other players in the market didn’t?

On the 15th July 2008, the announcement on the Jamaica Stock Exchange (JSE) website was that “Salada Proposed A Stock Split”. Salada Foods Jamaica Ltd advised that at a meeting of the company’s Board of Directors to be held on July 22, 2008, the directors would be considering a split of the company’s share.

On the 25th of July in 2008, the following was posted on the JSE website “Stock Split-Salada Foods.”

“The Board of Directors of Salada Foods Limited has advised that the Directors have decided on the following matters at its meeting held on July 22, 2008:
a. To increase the number of authorized shares in the company from ten million four hundred thousand to five hundred million ordinary shares of no par value by the creation of four hundred and eighty nine million six hundred thousand new shares of no par value.
b. From the new shares created the company will issue nine new ordinary shares for every one ordinary share currently held by each member of the company.
c. To call an Extraordinary General meeting of the shareholders’ to be held on August 28, 2008, at 3 p.m., at the Hilton Kingston Hotel to put forward the above stated Ordinary resolutions and
d. To put forward at the meeting Special resolution for the adoption of Articles of Incorporation of the company and cancel the existing Articles and Memorandum in substitution therefore. “
There was no indication from this report what the intention of this move might be; was it to increase the company’s share capital to fund projected growth and expansion, or was it designed to raise funds to pay down expensive debt?.

At the time, the company’s stock was trading between JA$130 and JA$135 per unit having started the year at JA$44 and would go as high as JA$150 before the end of the year on very low trading volumes (see table below). It could therefore be assumed that the stock split was designed to allow the shares to trade in smaller denominations thus attracting more investors. But was this the real value of the stock? Or was this the result of rampant speculation driving the price up?

SALADA MONTHLY
TRADING VOLUMES 2008

Jan 1,899,214
Feb 90,822
Mar 67,615
Apr 14,014
May 29,386
Jun 850
Jul 3,620
Aug 1,149
Sept 1,235
Oct 1,175
Nov 30,150
Dec 94,500

Did the volume of stock trades warrant this kind of move in the stock price? One could hardly take these low levels of trades as a serious bid to wrestle and secure control. Still, more unanswered questions.

What did Salada have to offer?

For the financial period ending September 30th 2008, Salada posted revenues of $393.8M an increase of $51.1M or 14.9% over 2007. Profit before tax was $114.0M compared to $102.6 for the corresponding period in 2007. Net profit attributable to shareholders was $75.3M compared to $68.2M. Earnings per share (EPS) was $7.25 compared to $6.56.

“I can’t think of anything special or specific at the time that would warrant a stock price war and battle for control of Salada foods, other than a good brand name and reasonable good export growth prospects I don’t see much else”, according to one financial analyst when asked the question. That also seemed to be the perspective of a number of other industry watchers. So what really was it? What did Chris Berry and Donovan Lewis, the two players battling for control, see and know that other players in the market didn’t know and could not see? Was this much ado about nothing or was there really something there? Could it be that there was collusion to drive the stock price up?

One senior business executive suggested that Mayberry’s attempt to secure control by offering $32.50 per share for 51 per cent of the coffee company’s near 10.4 million issued shares was not realistic, as Donovan Lewis controlled just over 60 per cent of Salada, and was not likely to sell to Mayberry to give them the desired control.

So, when Mayberry announced a hostile bid for Salada Foods, at $32.50 per share for 51 per cent of the coffee company’s near 10.4 million issued ordinary shares, investors started to take notice. The offer opened on August 30th and closed September 28th last year. At the time, there were 10,388,320 Salada shares outstanding, which would put Mayberry’s cash offer at approximately J$172.2 million.

The Mayberry bid rivalled that of the August 17th 2008 Donovan Lewis-controlled Three Bears’ offer of $25.82 per share for the remaining 39.77 percent of ordinary stock units in Salada. Mayberry said its cash offer had long-term benefits for the company, including profitability growth potential.

There was, as would be expected, varying views by analysts on the offers. According to one published view, “The move to acquire a 51 per cent shareholding in Salada might be an attempt by Mayberry to prevent Three Bears from increasing its shareholding in Salada by as much as 80 per cent and subsequently delisting the company”. However published statements attributed to Donovan Lewis confirmed that he had no intentions of delisting the company, and was only responding to take-over rules triggered by his current holdings. Others felt it could diversify Mayberry’s business and boost Salada’s share price.

Three Bears, which is based in the British Virgin Islands, surpassed the 50 per cent threshold to trigger a mandatory take-over bid when Lewis or companies controlled by him acquired Three Bears from the Caribbean Investment Fund (CIF) at the end of 2006.

The deal gave Three Bears 2,052,000 ordinary stock units in Salada. Lewis, through Three Bears, subsequently purchased a further 2,018,981, ordinary Salada stock units from the CIF. The combined acquisitions gave Three Bears 60.23 per cent ownership of Salada.

Chief Executive Officer of Mayberry, Gary Peart, in published media reports last year was quoted as saying that “his (Mayberry) firm was prepared to offer more than Three Bears as it believes the acquisition of shares in Salada has sound, long-term benefits.”

“We are prepared to offer close to 26 per cent ($6.68) above the Three Bears’ take-over offer because we believe that the acquisition of shares in Salada has sound, long-term benefit. Salada presents the profile and profitability growth potential that we look for in companies to include in our acquisition strategy going forward, though it’s continuing profitability is not a certainty,” Peart also said.

It’s interesting to note that both bids were significantly below Salada’s then market price of $45.

This begged answers to the following questions.

What triggered the stock movement to 45 dollars per share?

Why were the offer prices for the stock below 45, hovering now between JA$26 and JA$32.5 dollars?

What’s the real value of a Salada stock?

And so a bidding war was on for controlling interest in Salada Foods, and as one analyst said, “it could be that Mayberry is banking on the fact that any price below 45 is a good buy and with an expectation that the price may move back up they will be guaranteed a handsome profit on the deal. And with a bidding war now in play with Three Bears, chances are that the prices will begin to move again. So it appears no matter what Mayberry and Three Bears do by virtue of their actions, each may just get the price movement they seek.”


So was the Salada takeover battle an exercise in futility?

“I have over 60 per cent of the shares and I’m not selling. Is he (Chris Berry) really serious?” commented Donovan Lewis, Chairman Three Bears Limited.

The buzz around Salada pushed the stock price to JA$70 per share and in the face of a clear and unequivocal rejection of an offer to buy controlling interest from Donovan Lewis, Chris Berry’s Mayberry Investments was still pushing. The only question to be answered was why?

Given that Donavan Lewis acquired the stock at $25.82 or $161.5m in total value, this represented a whopping $277m gain in less than ten months. Chris Berry did not do too badly either. Mayberry Investments’ 0.3 per cent share holdings made roughly $1.4 million based on the stock price. Investment managers were reported to be saying at the time that the stock price might even climb further to $80.

The Salada Board subsequently announced that Mayberry had served a written notice upon the Company increasing its take-over bid price from J$32.50 per stock unit to J$40.08 per stock unit. The new price valued the Mayberry bid at $212 million. In response, the coffee company called an urgent meeting of its Board of Directors on September 19, 2008 to consider the Mayberry increased offer.

Mayberry’s move was ahead of the Board’s recommendation that shareholders reject the original bid in August of $172 million, or $32.50 per share, to gain fifty-one per cent (51%) of Salada, rivalling the mandatory bid of $25.82 made by controlling shareholder, Donovan Lewis’ Three Bears. The Salada Board said it had undervalued the holdings. At $70 per share, Salada was valued at $727.2 million ($70 times 10,388,330 stock units in issue). At that price, Mayberry’s holding, a negligible 31,250 units or 0.3 per cent of the Company was worth $2.2m; while Three Bears, which owns 60.23 per cent of Salada or 6,256,891 units, was worth $438m.

Not selling

To secure its targeted 51 per cent bid, Mayberry would have to woo Three Bears to sell some of its holdings. Lewis however is reported to have again said that he would not sell neither would he improve his offer, calling the Mayberry offer a futile exercise. “I don’t know what they are trying to do; that doesn’t make sense,” he said. “I have over 60 per cent of the shares and I’m not selling. Is he really serious?”

Mayberry however remained undaunted indicating that it saw value in the stock and that responses to the offer had been fair so far, indicating that the price offer was a result of Mayberry’s re-evaluation of the stock.

Lewis said that even at the new price, Mayberry’s rival offer could not succeed. He said that, “no one at the company had approached him to sell and that the new $40.08 offer was neither worth the time nor the effort.”

However, Peart said Salada is an illiquid stock and that the price could jump significantly either way. He argued that a lot of shareholders had already taken up the offer saying they had been trying to sell their shares for years but could not find buyers.

As 2008 came to a close, Salada stock price reached as high as JA$150 per unit, driven largely by speculations. The Directors of Salada Foods subsequently advised that they would do a stock split and shareholders were to receive a ten to one offer, consistent with the resolutions put forward at the Extraordinary General Meeting.
With the stock price at JA$150 per share, the value of Donovan Lewis’ share holding in the company moved from JA$161,552,925 to JA$644,459,773, a gain of JA$482,906,847. Mayberry’s investments now had a pre-tax profit of JA$2,411,875.
Was this the end game? Your guess is as good as mine.

Additional Sources: Jamaica Gleaner, Jamaica Observer, Jamaica Stock Exchange, Internet sources

Businessuite Markets

The Strategic Importance of Investor Communication and Recommendations for Caribbean Listed Companies

By embracing these practices, Caribbean listed companies can foster stronger relationships with investors, enhance market perceptions, and potentially realize higher valuations that reflect their true intrinsic value.

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Effective communication with investors is not merely a compliance exercise; it’s a strategic imperative that influences a company’s market valuation and access to capital.

Key benefits include:

Enhanced Market Valuation: Transparent and consistent communication reduces information asymmetry, leading to improved investor confidence and potentially higher stock valuations.

Improved Liquidity: Engaged investors are more likely to trade shares, increasing liquidity and reducing volatility.

Broader Investor Base: Proactive communication attracts a diverse range of investors, including retail investors who can provide stability and advocacy for the company.

Resilience During Crises: Companies that maintain open lines of communication are better positioned to navigate challenges and retain investor trust during turbulent times.

Global Trends in Investor Relations
Internationally, companies are adopting innovative strategies to engage with investors:

1. Digital Engagement Platforms
Companies are leveraging digital tools to provide real-time updates and interactive content:
Investor Portals: Secure platforms offering access to financial reports, updates, and company news.
Webinars and Virtual Events: Facilitating direct interaction between management and investors.
Social Media: Utilizing platforms like LinkedIn, Twitter, and YouTube to disseminate information and engage with a broader audience.

2. Personalized Communication
Tailoring messages to specific investor segments enhances relevance and engagement:

Segmented Reporting: Providing information tailored to the interests of different investor groups.
Interactive Content: Using videos, infographics, and interactive reports to make complex information more accessible.

3. Emphasis on ESG Reporting
Environmental, Social, and Governance (ESG) factors are increasingly influencing investment decisions:

Transparent ESG Disclosures: Providing comprehensive reports on ESG initiatives and performance.

Integrated Reporting: Combining financial and non-financial information to present a holistic view of the company’s performance and strategy.

Recommendations for  Caribbean Listed Companies
To bridge the communication gap and unlock shareholder value, Caribbean listed companies should consider the following strategies:

Establish Robust Investor Relations Programs: Develop dedicated IR teams or functions responsible for managing investor communications and relationships.

Leverage Digital Channels: Utilize websites, social media, and email newsletters to provide timely and accessible information to investors.

Host Regular Investor Events: Organize webinars, virtual town halls, and Q&A sessions to engage directly with investors and address their concerns.

Enhance Transparency and Disclosure: Provide clear, comprehensive, and timely information on financial performance, strategic initiatives, and ESG efforts.

Solicit and Act on Investor Feedback: Implement mechanisms to gather investor input and demonstrate responsiveness to their concerns and suggestions.

Adopt Integrated Reporting Practices: Combine financial and non-financial reporting to present a cohesive narrative of the company’s value creation strategy.

By embracing these practices, Caribbean listed companies can foster stronger relationships with investors, enhance market perceptions, and potentially realize higher valuations that reflect their true intrinsic value.

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Spur Tree Spices Projects Growth from Product Innovation, Domestic Sales, and E-Commerce Scaling

The Company expects continued growth in the traditional product segments, supported by the rollout of new products, increased domestic sales through expanded retail penetration and stronger trade execution, and the scaling of its Amazon and e-commerce presence through optimised listings, targeted advertising, and improved fulfilment efficiency.

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Albert Bailey Chief Executive Officer Has Released The Following Report On The Financial Performance Of Spur Tree Spices Jamaica Limited For The First Quarter Ended March 31, 2025, Including The Presentation Of Unaudited Financial Statements Prepared In Accordance With International Financial Reporting Standards

The Company’s overall results for the first quarter were shaped by several ongoing challenges in the agro-processing sector. These challenges disproportionately impacted the subsidiaries. However, amidst these challenges, there were many positive indicators, including continued double-digit revenue growth in the traditional seasonings and sauces segment of the business. While profit performance for the quarter declined compared to the corresponding period for 2024, the company remains on track for a successful year. In the coming months, all indicators point to the normalisation of key raw material supply, including ackee. These factors, combined with expected growth from new product segments and continued expansion of traditional product categories, put the company on a firm path to continued success.

Consolidated revenue for the first quarter totalled J$336.39 million, compared to J$394.49 million in the corresponding period 2024, representing a 17.3% decline. This was primarily due to continued constraints in the supply of ackee, a key raw material for the Company’s subsidiaries. Despite this challenge, the Company recorded notable growth in several categories, including seasonings, sauces, and dried products, supported by expanded distribution in local and export markets, strong consumer demand, and the successful launch of new product lines.

Cost of Sales for the period amounted to J$245.86 million, or 73.09% of revenue, compared to J$287.62 million (72.91%) in Q1 2024. The slight increase in the cost-to-revenue ratio reflects the shift in product mix, as the Company adjusted production output to include a higher proportion of lower-margin items in response to the limited availability of ackee. Though not ideal, these measures enabled the business to sustain production and meet customer demand amidst raw material constraints.

Gross Profit for the quarter was J$90.53 million, down from J$106.86 million in the corresponding period of the previous year, a 15.3% decline. This was driven by the revenue reduction and a greater contribution from lower-margin substitute products produced during the ackee shortfall.

Nonetheless, the Company remains optimistic about the recovery of gross margins in the coming quarters. Continued rollout of new and value-added products across core and subsidiary operations is expected to improve the overall margin profile. In addition, the gradual recovery of ackee supply, enabled by targeted investments in farming and expanded sourcing, is expected to restore availability and strengthen the Company’s higher-margin revenue base. Together with ongoing cost-efficiency measures, these strategic actions are anticipated to drive improved profitability as the year progresses.

Administrative Expenses for the quarter amounted to J$69.62 million, representing a 2.5% reduction compared to J$71.38 million in Q1 2024. This reflects the Company’s disciplined approach to cost management and operational efficiency while ensuring that critical support functions remain in place to advance strategic objectives.

Finance Costs rose to J$12.05 million, compared to J$9.54 million in the same period last year, an increase of 26.3%. This was primarily due to interest on an additional J$55 million loan secured to support Spur Tree’s farming operations. This investment is key to the Company’s broader strategy to stabilise raw material supply and ensure production continuity.

Net Profit attributable to the Company totalled J$12.00 million, down from J$28.18 million in Q1 2024, representing a 57.3% decline. The result was mainly impacted by the continued raw material shortages affecting subsidiary operations, which offset gains achieved through product expansion and cost containment elsewhere in the Company.

At the end of the reporting period, Cash and Cash Equivalents stood at $131.7 million, reflecting a 26% increase over the $104.4 million reported for the corresponding period in 2024. Total Assets increased to $1.68 billion, up from $1.56 billion, representing an 8% yearover-year improvement. Shareholders’ Equity also strengthened, rising by 9% to $1.03 billion compared to $948 million in the prior year.

Although the consolidated performance fell below expectations for the quarter, the Company remains confident in its long-term strategy. Investments in farming, supply chain resilience, and innovation are expected to yield increasing benefits in the quarters ahead, supporting recovery and future growth.

Outlook

The outlook for 2025 remains positive despite the temporary headwinds experienced in the first quarter. The Company continues to demonstrate resilience and growth in its core operations, with strong performance across established and new product categories, supported by increased market penetration locally and internationally.

The Company expects continued growth in the traditional product segments, supported by the rollout of new products, increased domestic sales through expanded retail penetration and stronger trade execution, and the scaling of its Amazon and e-commerce presence through optimised listings, targeted advertising, and improved fulfilment efficiency.

The Company’s subsidiaries are actively pursuing product diversification strategies to safeguard the ackee supply, which we expect to normalise in the coming months. The Company is also broadening its portfolio to include other complementary items. This will lead to a return to an overall profit position by the end of the year.

Investment in direct farming continues to be a cornerstone of the Company’s strategy. It enhances the availability of raw materials and strengthens supply chain resilience. These efforts are expected to increase value throughout the year, supporting operational stability and margin recovery.

With these initiatives firmly in motion, the Company is well-positioned to build momentum over the coming quarters. Management remains focused on delivering sustainable growth and creating long-term value for all stakeholders.

For More Information CLICK HERE

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Mailpac Group Doubles Q1 Revenue to $716.4M, Driven by My Cart Express Integration

The Company delivered a strong performance for the first quarter of the financial year, with total revenues of $716.4 million, representing a 94% increase over the J$368.5 million reported for the corresponding period in 2024. This growth was primarily driven by the integration of My Cart Express in reporting.

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Khary Robinson Executive Chairman, Mailpac Group Limited has released the following Unaudited Financial Statements for the First Quarter Ended March 31, 2025

Throughout the quarter, Mailpac focused on improving service delivery, and increasing customer conversions.

Despite an increasingly competitive marketplace and external factors threatening efficiencies, our financial performance reflected the impact of our continued focus on long-term growth and sustainability, delivering superb results for the period.

Financial Performance: The Company delivered a strong performance for the first quarter of the financial year, with total revenues of $716.4 million, representing a 94% increase over the J$368.5 million reported for the corresponding period in 2024. This growth was primarily driven by the integration of My Cart Express in reporting. Gross profit for the quarter amounted to $388.7 million, compared to $197.9 million for the same period last year, reflecting improved margins and operational efficiencies. This improvement is attributed to increased operational efficiencies and negotiated cost reductions achieved through economies of scale. The Company recorded net profit of $69.7 million of Q1 2025, an increase from $50.1 million in Q1 2024, representing a 39% year-over-year increase. Strategic Developments and

Financial Position: During the quarter, Mailpac continued to make significant capital investment in technology infrastructure and logistics to support long-term scalability and development of service offerings, Additionally, we continue to benefit from the tax remission under the Jamaica Stock Exchange Junior Market rules, now at 50%, following the completion of the initial 5-year full remission period in December 2024.

As at March 31, 2025, Mailpac Group Limited reported total assets of $2.3 billion, up from $626.3 million as at March 31, 2024. The increase is largely attributed to the rise in intangible assets following the acquisition and increased right-of-use assets.

Shareholders’ equity grew to $806.2 million, compared to $537.9 million in the prior year. Outlook: The Company remains focused on growth through innovation, strategic partnerships, and enhanced customer experiences. With an increasingly digital consumer landscape and our expanding footprint, we are confident in delivering continued value to shareholders and stakeholders alike. The Board of Directors and management team would like to express our appreciation to our shareholders, customers, employees and partners for their continued support. We remain committed to delivering value for all out stakeholders and thank you for your unwavering trust in Mailpac.

For More Information CLICK HERE

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Kingston Properties Reports Robust Q1 Growth in Core Revenues and Net Income

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Kevin G. Richards Chief Executive Officer Of Kingston Properties Limited (KPREIT) Has Released The Following Unaudited Financial Statements For The First Quarter Ended March 31, 2025

The Group delivered a robust performance for the first quarter of the year with solid growth in core operating revenues and net income. This positive performance reflects the strategic expansion of our investment property portfolio and effective property management, which have both contributed to higher rental rates and increased property values. We expanded our footprint in the United Kingdom (UK) market while constantly evaluating the existing portfolio for optimization opportunities. We have deployed cash resources into high yielding investment assets which is now driving improved operating results and we have officially commenced construction of our first greenfield warehouse project at Rosseau Road. Additionally, the Group’s successful efforts to re-let vacant spaces resulted in a 92% occupancy rate during the reporting period, being an 11% improvement on occupancy at the start of the year. We continue to benefit from a resilient tenant base which operates across a variety of industries including financial, warehousing and logistics, manufacturing, and government services.

INCOME STATEMENT

Group rental income was $1.38 million for the three months ending March 31, 2025, which represents a 24% increase over the same prior year period. The addition of 2530 Aztec West Business Park in the UK and Duke Street buildings in Jamaica, along with improved rental rates on some properties across the portfolio, are the primary factors impacting the year over year growth in rental income. Group operating expenses for 1Q2025, which includes administrative and property management expenses, increased to $583,539 compared to $389,089 in 2024. This increase is attributable to higher staff costs, increased professional fees associated with the expansion of the UK portfolio, as well as broker fees and the legal cost of letting vacant spaces in Jamaica and Cayman Islands.

Results of operating activities before other income of $799,769 for 1Q2025, reflects an 11% improvement over the $722,901 during the same prior year quarter. Additionally, having reclassified an asset for disposal, we recognised a fair value gain of $371,908 during the period, resulting in Group operating profits of $1.3 million for 1Q2025, which is slightly ahead of the same prior year period.

Net Finance Cost (NFC) amounted to $392,597 compared to $332,551 in 1Q2024 due to the growth in our debt portfolio, which funded the increase in assets under management. The Group continues to secure financing on favourable terms to take advantage of prime investment opportunities which improves our operating performance.

After adjusting for a reduction in deferred taxes liabilities, Profit after tax in 1Q2025 amounted to $1,001,437 million versus $946,357 for the first quarter of 2024, representing an increase of 6% YoY.

Funds from operations (FFO) for the first three months of the year moved to $519,851 compared to $336,081 for the same period in 2024, yielding growth in a key liquidity performance indicator, of approximately 55% YOY.

GROUP BALANCE SHEET

Following the 2H2024 acquisitions of the Duke Street properties and 2530 Aztec West along with improvements in the fair value of our assets at the end of FY2024, the Group acquired a second office building in Dorking Business Park, UK on March 31, 2025. Consequently, the value of investment assets grew by 26% YoY to $85.63 million versus the $67.99 million as of the corresponding date in 2024. Additionally, total assets under management grew by 24% to $88.38 million compared to $71.55 million last year. Cash holdings declined from $2.45 million in prior year to $1.35 million resulting from the deployment of cash into; the acquisition of income generating properties; upgrading existing assets and; mobilizing a greenfield development. During the first quarter of 2025, the Group commenced construction of the Rousseau Road warehouse complex, while we reclassified another property to asset held for sale, as the Group continues to optimise the portfolio for maximum returns and to access growth opportunities.

Total loans payable at the end of the reporting period amounted to $34.24 million, in comparison to $21.90 million in 2024. The increased loan balance, which is primarily collateralized bank financing, was deployed for the expansion of our operating asset base and property improvements. Our current loan portfolio is denominated both in United States and Jamaica dollars from our financial partners in Jamaica and the Cayman Islands. Despite the increase in total loans payable, the Group is relatively underleveraged, with total loans payable being 39% of total assets and debt to equity of 65%. We continue to maintain conservative debt ratios as part of our risk management strategy with options to refinance our debts when the market becomes more favourable.

Total Equity increased by 8% year on year, moving from $$48.82 million in 2024 to $52.81 million in 2025. The increase in equity was driven by improvements in our property values at the end of financial year 2024 and higher net profits generated in first quarter of 2025, resulting in a book value per share of US$0.0597 (J$9.46) compared to US$0.0552 (J$8.54) in 2024.

SUMMARY AND OUTLOOK

Our strategy to seek out risk-adjusted, value-add assets continues to bear fruit as demonstrated by our compounded annual growth rate of net profits and book value per share over the last six years of 6.1% and 7.3%, respectively. Our acquisition of Building 4, Dorking Business Park at the end of the quarter will continue to boost the Group’s performance this year with increased rental revenue and the potential benefit of currency diversification. Geographic flexibility will remain a core focus of our strategy, and we will actively explore commercial property opportunities in locations that satisfy our core strategic imperatives of stable democracies, strong property law rules, freely convertible currencies and competitive yields. Although the US Fed, at its last meeting, held interest rates steady, the Bank of England reduced interest rates, and we believe this is a positive sign for UK real estate.

Our first solo greenfield project in Jamaica located on Rousseau Road in Kingston, continues in earnest and we expect the 14 mini-warehouse units to be ready for leasing in January 2026. We will also continue our strategy of monetizing mature assets in our portfolio and deploying the proceeds from those transactions into acquiring larger, higher-yielding assets with diverse tenant bases to strengthen the Group’s resilience and grow core earnings.

In tandem with our operational initiatives, we remain deeply committed to community engagement and sustainability. More of our properties are being equipped with energy-efficient and waste-reduction systems as we work toward achieving fully green operations across our portfolio.

For More Information CLICK HERE

 

 

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Seprod’s Strong 31.9% Revenue Growth Tempered by Higher Finance Costs from Regional Expansion

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Q1 Performance (January-March 2025)

This report presents the consolidated financial statements for Seprod Limited for the three (3) months ended 31 March 2025 (Q1), it provides a comprehensive overview of the company’s financial position, performance, and cash flows. The data is presented in Jamaica dollars and is unaudited. The analysis covers Q1 performance with a comparison to the same period in 2024.
Richard Pandohie  Group Chief Executive Officer Seprod Group of Companies

Revenue and Profitability Analysis:

 Total revenue for Q1 2025 was $37.7 billion, representing a 31.9% increase from $28.6 billion in Q1 2024.

 Direct expenses increased proportionately from $21.1 billion to $27.6 billion in 2025, resulting in a gross profit of $10.1 billion (2024: $75 billion).

 The gross profit margin improved to 26.7% in Q1 2025 from 26.2% in Q1 2024, indicative of management striving for effective cost control despite rising expenses.

 Operating profit remained consistent with the prior year, ending the quarter at $2.4 billion.

 Finance costs increased significantly to $1.15 billion due to higher debt level used to finance strategic acquisitions.

 Profit before taxation stood at $1.36 billion, a decrease of 22% from the 2024 comparative period.

 After accounting for taxation, the net profit from continuing operations was $867 million, a decline from $1.23 billion in Q1 2024, attributed mainly to increased finance costs.

Asset and Equity Analysis:

 Total assets increased from $103.1 billion as of March 2024, to $133.4 billion as of March 2025, an increase of 29.4%.

 Total liabilities increased from $62.8 billion to $85.7 billion, reflecting higher current and long-term liabilities.

 Total equity attributable to shareholders increased to $30.2 billion.

 No dividends were declared in Q1, but this was a timing issue, as the Board approved a dividend of $0.605 per share at a meeting held on April 2025, which is the same as the amount paid in Q1 2024 ($440 million). The company is expected to maintain its strong dividend payout ratio in 2025.

 Cash used in investing activities was $618 million, up from $440 million in prior year. This was mainly for capital expenditure. The revenue growth was strong at 31.9% but this did not flow all the way to the bottom-line due to cost pressure, particularly in finance costs used to realize the Group’s substantial acquisition activities as we build out a regional distribution platform.

The significant increase in assets reflects our increased scale and positions us for continued future growth. Management is very focused on strategies to increase productivity, enhance operating efficiency and reduce finance costs. Our base is strong and the growth trajectory will continue to be positive. We are confident that the bottom-line will begin to reflect the strong top-line in short order. We thank you for your support.

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