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Mayberry Investments Joins John Jackson, In Calling For A Rejection Of Ansa Coating International’s Offer – Updated

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7 years ago

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The number of shareholders coming out and publicly rejecting Ansa Coating International Limited’s offer to purchase the ordinary shares in Berger Paints Jamaica Limited, now held by minority shareholders is growing.

Mayberry Investments Limited, noted financial analyst John Jackson, Sagicor Investments, a subsidiary of Sagicor Group which controls more than 10 percent of Berger Paints shares and the Ideal Group of companies, the largest minority shareholder in Berger Paints at 12%+ of the Company, have all voiced their rejection of the $10.88 offer, arguing that the shares are worth much more, suggesting a price range of $11.23 to as high as $20.

Mayberry Investments Joins John Jackson, In Calling For A Rejection Of Ansa Coating International’s Offer 

Mayberry Investments Limited has joined noted financial analyst John Jackson, in calling for a rejection of Ansa Coating International Limited’s (ACI) offer to purchase the ordinary shares in Berger Paints Jamaica Limited (BRG), now held by minority shareholders.
As the majority shareholder, ACI has made a mandatory offer pursuant to section 19 of the Rules Governing Take-Overs and Mergers in the Jamaica Stock Exchange’s (JSE) Rule Book, to purchase the remaining BGR shares on the market.

The company has offered to purchase all remaining BRG shares at a value of J$10.88 or US$0.08485 per share, payable in cash. The offer opened on September 7, 2017 at 9:00 am and is scheduled to close on September 28, 2017 at 4:00 pm.

A group of independent directors of BRG, Pokar Chandiram, Michael Fennell, Warren McDonald and Milton Samuda, citing a myriad of legal and monetary considerations, has advised shareholders to accept the offer made by ACI.

Jackson is questioning why any rational person would recommend that shareholders sell their Berger Jamaica Paints shares for JA$10.88, when the shares are worth more.

Both Jackson and Mayberry are of the firm view that the shares are worth much more, suggesting a price range of $11.23 to as high as $20.

It is against this backdrop that Mayberry has concluded that the price being offered by ACI is well below the current and medium-term projected value of the BRG stock. With this in mind, it is the position of Mayberry that shareholders should reject ACI’s current offer.

It simply makes no logical sense as the offer to buy is not a fair price for the minority shares Jackson remarked in IC Insider.com, indicating that unfortunately, a number of small shareholders are likely to get their wealth sucked out by an awful and unfortunate recommendation by the directors of Berger Paints for them to accept an offer that is clearly not in the interest of minority shareholders. BM

Mayberry Rejects Berger Offer

On July 24, 2017, Ansa Coating International Limited (ACI) purchased 100 per cent of shareholdings in Lewis Berger (Overseas Holdings) Limited (“LBOH Acquisition”). As a result of this acquisition, Ansa indirectly holds 109,332,222 ordinary shares in Berger Paints Jamaica Limited (BRG), which represents 51.01 per cent of the shares in issue.

As the majority shareholder, ACI has made a mandatory offer pursuant to section 19 of the Rules Governing Take-Overs and Mergers in the Jamaica Stock Exchange’s (JSE) Rule Book, to purchase the remaining BGR shares on the market. The company has offered to purchase all remaining BRG shares at a value of J$10.88 or US$0.08485 per share, payable in cash. The offer opened on September 7, 2017 at 9:00 am and is scheduled to close on September 28, 2017 at 4:00 pm.

A group of independent directors of BRG, Pokar Chandira, Michael Fennell, Warren McDonald and Milton Samuda, citing a myriad of legal and monetary considerations, has advised shareholders to accept the offer made by ACI. Chief among their reasons is the likelihood that most shareholders will accept the offer and grant ACI a majority shareholding of over 80 per cent in BRG. This would lead to the JSE de-listing the company from the exchange and ACI has made clear its intention to take the company private.

A company operating outside the ambit of the JSE is not only subject to less stringent information and reporting requirements, but also the minority shareholder must consider the fact that stocks of a delisted company are considerably more illiquid, as there is no recognised trading system to facilitate the buying and selling of the stock and even in cases where such trades are executed, they attract additional taxes.

The independent directors also warned of a possible “squeeze out” at the original offer price if ACI acquires 90 per cent or more of all outstanding shares of BRG, meaning ACI, with that number of shareholdings, could compulsory acquire all outstanding minority shares. The independent directors asserted that there is “very little chance of successfully opposing a compulsory ‘squeeze out’”, based on the advice of their attorneys, Myers, Fletcher & Gordon.

Clearly the independent directors have decided that it is in the best interest of shareholders to accept the offer. Even if ACI does not meet the 90 per cent threshold for a “squeeze out”, a shareholder controlling more than 75 per cent of the votes admissible at a general meeting will be able to pass any ordinary or special resolution without the consent of the minority shareholders. Furthermore, an uncertain dividend policy is also a consideration.

Mayberry Investments Limited (Mayberry) disagrees with the position of the independent directors of BRG, and based on its own valuation of the company, maintains that shareholders should reject the offer made by ACI.

BRG’s performance year to date has shown an increase in revenues and an improvement in profit from operations. The operating profit and net profit margins for the three months ended June 2017 was 6.87 per cent and 5.15 per cent respectively. This performance indicates that the company is benefitting from previous investments that improved processes, lowered energy costs, increased efficiency through plant & machinery upgrades as well as flat raw material costs.

As the local macroeconomic indicators continue to trend upwards, BRG is expected to see an increase in business activity. Revenue from sales is projected to increase, driven by an expansion in the construction industry, which was used as a proxy to project paint sales. Data from The Planning Institute of Jamaica (PIOJ) for the review period April – June 2017 estimated that construction grew by 1.5 per cent. This was due to an increase in building construction, led by the building out of office space to facilitate expansion of Business Processing Outsourcing (BPO).

As the construction industry continues to experience robust growth, BRG stands to improve its sales revenues; BRG continues to be the most dominant player in the decorative paints market and is continuing to increase its market share. The growth in the company’s market share should have a positive impact on revenues and margin.

For the 2017 financial year (FY), revenue is projected to increase by 5 per cent, given the expected expansion in the construction industry and the current marketing campaign to increase market share. Operating profit margin is expected to average 15 per cent for the projected period; this compares to the 2017 year end margin of 15.48 per cent. It is consistent with the investment in equipment to increase efficiency, which should continue to pay off into 2017.

For the FY 2018 year end, BRG’s earnings per share (EPS) is projected at $1.49 (2017: $1.47), while the 12 months projected EPS is $1.50. The stock is currently trading in the area of $11.23 per share as at September 21, 2017 and is projected at $15 for the next twelve months using a P/E of 10 times. Further, BRG has not closed below the price offered of $10.88 since January 30, 2017, which is also below the average price of $14.06 reported since the beginning of 2017.

This puts the buyback price of $10.88 at 37.86 per cent below its medium-term valuation. If accepted, shareholders will forgo an approximated $0.35 per share compared to the current price of $11.23, and an estimated $4.12 per share relative to the projected price of $15. It should also be noted that on the date that the offer opened (September 7, 2017), the stock closed at a price of $12.06, coming from a price of $15.81 as at August 31, 2017.

It is against this backdrop that Mayberry has concluded that the price being offered by ACI is well below the current and medium-term projected value of the BRG stock. With this in mind, it is the position of Mayberry that shareholders should reject ACI’s current offer.

 

It Simply Makes No Logical Sense As The Offer To Buy Is Not A Fair Price For The Minority Shares – Jackson

Noted financial analyst John Jackson, is questioning why any rational person would recommend that shareholders sell their Berger Jamaica Paints (BPJL) for JA$10.88, when the shares are worth more than $20 each,

According to Berger Jamaica directors, a PwC Advisory has stated in the Fairness Opinion, that the consideration under the offer is fair to the shareholders of BPJL from a financial point of view. PwC Advisory review procedures focused on evaluating the fairness of the offer on a stand-alone basis and not relative to the price attributed to other companies included in the Acquisition.

It simply makes no logical sense as the offer to buy is not a fair price for the minority shares Jackson remarked in IC Insider.com, indicating that unfortunately, a number of small shareholders are likely to get their wealth sucked out by an awful and unfortunate recommendation by the directors of Berger Paints for them to accept an offer that is clearly not in the interest of minority shareholders.

There are investors who will not accept it, hence the chance of the offer doing well is slim, especially as the stock has been trading above the offer price Jackson remarked.

The above assessment mirrors IC Insider.com earlier comments that 6 shareholders hold more than 31 percent of the shares and they are unlikely to sell at the offer price.

That would make the possibility of the offer getting shares up to even 70 percent very slim. In addition there are others who won’t sell either Jackson concluded.

Source icinsider.com

 

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CAC 2000 Reporting A 41% Improvement In Net Income For Period Ending July 31, 2024.

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1 month ago

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September 21, 2024

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Gia Abraham Chief Executive Officer for CAC 2000 has released the following Unaudited Third Quarter results for period ending July 31, 2024

The Results:
Year -to-date we saw an increase of 18% in Sales for the period ending July 31, 2024, over the same period last year ($752,812,566 vs. $637,763,300), along with a 41% or $28,980,191 improvement in our net income. We continue to contain our overall operating expenses by 1.8% or $4,416,661 over the same period last year.

Whilst we are still experiencing longer shipment times due to the movement of manufacturing to China, we have been able to realize a reduction in our inventory days from 398 days to 300 days, in our debtor days from 225 to 206 days, as well as a decrease in our creditor days from 108 days to 77 days over the same period last year.

Retail Update
We continue to utilize our retail store located at 3U Village Plaza to improve the delivery of product offerings and services to our customers, while building the Team in Montego Bay, which is becoming the hub for the projects we are presently executing on that side of the island. As a company we are encouraged by this positive trajectory.

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PBS Expects 2024 Revenue, EBITDA And Profitability To Closely Align With Full Year Budgetary Expectations.

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1 month ago

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September 21, 2024

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Pedro M. París C. Director and Group CEO For Productive Business Solutions Limited Has Released The Following Unaudited Interim Report For Q1 2024

Q1 2024 Financial Performance Overview
In the first quarter of 2024, Productive Business Solutions (PBS) reported revenues of US$65.9 million, a decrease of US$21.6 million compared to the same period in 2023.

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the quarter was US$8.5 million, down from US$10.2 million in the first quarter of the previous year.

Additionally, our Profit After Tax (PAT) for the first quarter was US$0.4 million, as compared to US$1.7 million during the corresponding period in 2023.

Notably, our first quarter results in 2023 were impacted by a large transaction in which PBS provided laptops to the government in El Salvador. The transaction
produced a significant revenue contribution to PBS in that period but carried a lower than-average gross margin. As a result, PBS recorded higher gross profit in in Q1 2024 relative to Q1 2023 despite a reduction in revenue. PBS’ gross margin for the first quarter of 2024 improved to 35.5% from 26.5%, which is more representative of our business without the influence of any large, non-recurring sales.

Historically, the fourth quarter represents the strongest financial period for PBS, while the first quarter typically exhibits the lowest earnings. Our performance in Q1 2024 reflects this seasonal trend.

Strategic Acquisition Announcement
We are delighted to share a significant milestone in our company’s journey. During this quarter, we successfully initiated the strategic acquisition of Xerox operations in Ecuador and Peru and expect to close the transaction by the end of the second quarter of 2024. This acquisition is a testament to our commitment to expanding our market presence and enhancing our service offerings in the Latin American region.

The integration of Xerox operations in these key markets strengthens our capabilities in delivering expanded product/service and industry-leading solutions to a broader client base and offers a deeper Latin American footprint for our regional and global customers. We expect that this transaction will close in the coming months subject to regulatory approvals.

PBS expects to file its Audited Financial Statements for 2023 by June 30, 2024. The audit has been delayed as a result of accounting corrections which impact revenue, cost of goods sold, and contract assets primarily in periods before 2023.

Outlook

Our company’s pipeline of sales opportunities for the remainder of the year is strong.
We expect PBS’ 2024 revenue, EBITDA and profitability to closely align with our full year budgetary expectations.

PBS connects the largest enterprise software companies in the world to the leading firms and governments in our region. Our business is increasingly diversified by country, customer and supplier. Moreover, our growth reflects the enduring longterm trends of digital transformation to meet the needs of businesses and consumers. As we look ahead, we expect PBS to continue its trajectory of profitable growth.

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Main Event Entertainment Group Reporting 14% Drop In Nine Months Gross Profits

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1 month ago

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September 21, 2024

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Solomon Sharpe,  Chief Executive Officer for Main Event Entertainment Group Limited is reporting that the company recorded revenues of $440.064 million for the three months ended 31 July 2024 relative to the $428.056 million earned in the same period in 2023. This represents an increase of $12.007 million or 3% over the corresponding period of 2023. Despite the improvement in our year-over-year third quarter performance, the company saw a decrease of 10% to $1,426.391 million in its revenues year-to-date relative to the corresponding period in 2023 of $1.586.931 million.

Gross profit for the quarter was $205.678 million. Compared to the third quarter of 2023, this represents a decrease of $18.081 million or 8%; while for the nine months ended 31 July 2024, gross profits fell by $119.538 million or 14% to $719.565 million. Gross margins also fell for the quarter and the nine months results to 47% and 50% from 50% and 53%, respectively. The decline in gross margin is attributable to sales distribution with lower margins and maintenance exercises which were undertaken earlier in the year.

Despite the improvements in our third quarter results, the impact from the second quarter results continues to be shown in the year-to-date totals.

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Limners and Bards Make Big Bets On Management Of Talent And Content

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1 month ago

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September 21, 2024

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Kimala Bennett  Chief Executive Officer  for Limners and Bards Limited (The LAB) has released the following report to Shareholders of its unaudited financial statements for the nine months ended July 31, 2024, which have been prepared in accordance with International Financial Reporting Standards (IFRS).The consolidated results include the subsidiary Scope Caribbean Limited (Scope) whose principal business is the scouting, placement and management of talent while expanding and maintaining a database of quality talent.

The LAB achieved higher net profits compared to the corresponding period last year, with net profit reaching $83.5 million, a 46.7% increase over the comparable period. This growth was driven by our strong emphasis on the Agency Segment of the business for this quarter, as we continued to build brands. While revenues were down compared to the prior period, the company implemented cost containment measures, resulting in an 18% reduction in administrative expenses.

Shareholders’ equity grew to $681.4 million, up from $597.5 million or 14.0% over the corresponding period last year. We maintained a strong balance sheet, with an improved cash position over the period. Additionally, our asset base increased as we reinvested in the business, upgrading film studio facilities.

Revenue for the nine months ended July 31, 2024, was $752.7 million, down 17.6% relative to the prior period. This decline was primarily attributable to a reduction in Media during the period. Notwithstanding this, the Agency segment outperformed the comparable period. The revenue achieved was derived from the company’s core business lines: Media totalling $407.6 million, followed by Production with $190.5 million and Agency with $154.6 million.

Gross Profit for the nine months was $284.5 million, down 9.6% when compared to the corresponding period. Administrative expenses were also lower when compared to the comparable period. Administrative, selling and distribution expenses decreased by $47.5 million or 18% in comparison to the corresponding period last year. These decreases are primarily due to reduction in contractor and staff cost.

The consolidated Balance Sheet saw total assets increasing by $161.2 million or 17.1% to $1.1 Billion compared to $941.2 million in the corresponding period. This increase in assets is driven by building and film studio facilities improvement and purchases of new production equipment to facilitate future growth.

Current Assets amounted to $846.7 million, increasing by $59.9 million over the prior year.

Cash and cash equivalent increased by $25.5 million over the corresponding period last year. Management continues to maintain tight monitoring and control over receivables

Outlook
As the LAB continues to grow and diversify, our strategic initiatives are positioning us to capitalize on the booming global film industry and the increasing demand for fresh, international content.

We have successfully completed filming our first feature film, “Love Offside,” a sports romantic comedy that showcases the vibrant culture and dynamic talent of Jamaica. The film, features an impressive cast and has now entered the editing phase is slated for a February 2025 release, perfectly timed to meet the growing appetite for diverse and engaging content.

The global film market is experiencing a significant surge, with demand for international content at an all-time high. Industry reports indicate that streaming services and traditional distributors alike are increasingly seeking diverse narratives that resonate with a global audience. This trend presents a significant opportunity for the LAB, as “Love Offside” is poised to attract viewers with its unique storyline and cultural richness. Over the next 12 months, the Company plans to produce three films and three web series.

We are pleased to announce that our Chief Operations Officer (COO) and Head of Production, Tashara Lee Johnson, recently represented us at the MIP Africa Content Market in South Africa as a part of the Jamaican delegation organized by JAMPRO, a premier event in the global film industry. This market is a critical platform for forging connections, understanding market trends, and securing partnerships that will enhance our film’s reach and profitability.

In parallel, our agency arm is gearing up for our regional expansion strategy, where we will engage with various businesses and explore strategic partnerships across the Caribbean. Our goal is to solidify our presence in these markets, leveraging the region’s growing influence in the global media landscape.

Our commitment remains steadfast in delivering value to our shareholders by expanding our content portfolio, exploring new markets, and forging strategic alliances that will drive growth and profitability. The steps we are currently taking are designed to position the LAB at the forefront of a rapidly evolving industry, ensuring we capitalize on the opportunities presented by the global demand for fresh, compelling content.

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Trinidad and Tobago NGL’s Investment In Phoenix Park Gas Processors Delivers Robust Revenue and Profit Performance For Six Months Of 2024

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2 months ago

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August 31, 2024

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Dr. Joseph Ishmael Khan, Chairman Trinidad and Tobago NGL Limited has released the following Condensed Interim Financial Statements For The Six Months Ended 30 June 2024.

Trinidad and Tobago NGL Limited delivered a robust performance for the first half of 2024, posting a profit after tax of TT$46.7 million. This represents an outstanding turnaround from the corresponding 2023 period, where a loss of TT$2.8 million was recorded and signifies an impressive year-on-year improvement of TT$49.5 million.

Earnings per share reached TT$0.30, a substantial recovery from the loss per share of TT$0.02 for the same period in 2023.

The driving force behind TTNGL’s strong performance was the enhanced profitability of its investment in Phoenix Park Gas Processors Limited (PPGPL). This achievement was principally due to increased production of natural gas liquids (NGL), higher sales volumes, and improved NGL prices at Mont Belvieu.

Enhanced NGL production was facilitated by a 4.4% increase in natural gas volumes processed at Point Lisas in the first half of 2024 compared to 2023. Moreover, the gas stream’s NGL content saw a significant rise of 15.5% over the previous year, a result of deliberate efforts by The National Gas Company of Trinidad and Tobago Limited to enrich gas supplies. As a result, NGL production from gas processing increased notably, even when accounting for the extended plant downtime experienced in the first half of 2023.

Additionally, NGL volumes delivered from Atlantic LNG also increased by 3.2%, over the comparative period in 2023.

NGL prices rose by 11.5% compared to the same period in 2023, driven mainly by increased global demand and strategic positioning by market participants for future arbitrage opportunities.

The combination of higher NGL production and increased sales revenues, supported by improved NGL product prices, underscores PPGPL’s strong operational safety and its market leadership as the preferred NGL marketer locally and regionally.

Moreover, PPGPL has maintained high levels of operational efficiency within its processing plants, complemented by a strong commitment to safe operations and effective cost management.

During the first half of the year, Phoenix Park Trinidad and Tobago Energy Holdings Limited (PPTTEHL), PPGPL’s North American subsidiary, also delivered strong performance. PPTTEHL experienced significant trading volumes and benefited from improved margins on its sales contracts.
We anticipate continued earnings growth from this business segment moving forward.

TTNGL’s cash position at the end of June 2024 remained strong at TT$139.1 million, up from TT$113.0 million in 2023, reflecting the Company’s solid liquidity. TTNGL continues to explore all options to address its accumulated deficit and move towards a position where it can resume dividend distributions to shareholders.

Outlook
As we look ahead, we remain ever – optimistic about the positive price forecasts, while PPGPL continues to monitor market uncertainties and implement value-added strategies. PPGPL is unwavering in its commitment to strategic growth, prioritising the following: safe operations; high plant reliability and availability; meeting customer needs and sustaining market presence across all territories. These efforts are critical to delivering long-term shareholder value.

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