Businessuite Markets
Victoria Mutual Investments Already Has Effective Control of Kingston Properties.
Rezworth Burchenson Chief Executive Officer of Victoria Mutual Investments Limited (VMIL) needed to move quickly. The net profit recorded during the September 2022 quarter contributed to the 1.77% or JA$54.09 million growth in retained earnings. However, this was not sufficient to offset the $1.64 billion deterioration in investment revaluation reserve, which resulted in a 34.04% or JA$1.55 billion decline in total shareholders’ equity.
Rezworth Burchenson and Kevin G Richards Chief Executive Officer Kingston Properties Limited separately released two significant announcements over the last two weeks. Separately the two announcements may seem unrelated or even connected, but Businessuite has however found interesting links between them.
Kevin G Richards Chief Executive Officer Kingston Properties Limited
Based on these links we were forced to ask the following questions: Is Victoria Mutual Investments Making A Strategic Move To Acquire Kingston Properties and Does Victoria Mutual Investments Already Have Effective Control of Kingston Properties.?
The most recent came on January 3, 2023 from Richards advising the JSE, the RMOD and the wider investing public that a total of 66,673 units of KPREIT shares were purchased under a current share buy-back programme on December 29, 2022, at an average price of $7.04 per share.
The transaction was executed through their broker VM Wealth Management Limited, which is a subsidiary of Victoria Mutual Investments Limited (VMIL), itself a part of the Victoria Mutual Group.
The other release was made on December 30, 2022 by Rezworth Burchenson
announcing that his company Victoria Mutual Investments Limited (VMIL) had acquired 135,483,871 units of Kingston Properties (KPREIT) shares for a combined consideration of JA$1,050,000,000.
This transaction increased VMIL’s stake in KPREIT to a total of twenty-three per cent (23%), up from 7% as reported in September 2022, making KPREIT an associate company of VMIL.
It should also be noted that based on Kingston Properties September 2022 Shareholding Report:
• VMWealth Property Fund exercised control over 257,885,079 shares in Kingston Properties amounting to 29% of the shareholdings.
• Prime Asset Management JPS Employees Superannuation Fund exercised control over 138,584,772 amounting to 16% of the shareholdings.
Prime Asset Management, was formed in 1996, as a division of Prime Life Assurance Company Limited and was subsequently taken over and renamed VM Pensions Management Limited (VMPM).
Based on the above, as at the September 2022 reporting, Victoria Mutual was able to effectively leverage a total of 52.3% of the shareholding of Kingston Properties.
Prime Asset Management JPS Employees Superannuation Fund and VMWealth Property Fund held the two largest blocks of shares in Kingston Properties, and so it could be argued that Victoria Mutual Investments acquired its increased position from either of those two. Our investigation revealed that the acquisition came from the VMWealth Property Fund.
So, we were able to answer one of the two questions: Yes, Victoria Mutual Investments already has a greater that 50% effective control of Kingston Properties.
This first move by Burchenson and VMIL is essentially to directly account for the share of profits on its balance sheet, effectively shoring it up. Burchenson also expects to benefit from dividend income.
“With the acquisition of the additional shares, VMIL’s 23% stake in KPREIT will result in the Company reporting a share of profit.”
Previously as part of the VMWealth Property Fund they could not do this.
Why Kingston Properties?
Market correcting actions by the Bank of Jamaica (BOJ) coupled with investor sentiment in the US declining further in Q3 2022, this as prices and interest rates rose, where all impacting on the performance of VMIL.
In his Consolidated Financial Statements for the Third Quarter ended September 30, 2022 Burchenson noted that the Bank of Jamaica (BOJ) added a total of 100 basis points to the overnight rate during Q3 2022, via two 50-basis point rate hikes that brought the rate to 6.50% as at the end of the quarter. As the interest rate increased, the yields on Treasury notes fluctuated and the money market remained liquid for short-term placements.
For Burchenson “The third quarter of 2022 was turbulent, as we saw interest rates reaching an 11-year peak, as the central bank sought to put a lid on domestic inflation. As rates across the market soared, the performance of bonds and the fixed income markets deteriorated significantly, in conjunction with the negative impact of higher inflation on the equities market.
As a result, our Gains from Investment activities experienced a 23.77% decline over the quarter, while interest expenses grew 48.22% to $285.47 million.
These market conditions were the main impetus to the 75.82% decline in net profit for the third quarter. We ended Q3 2022 with a net profit of $84.08 million, which was primarily due to net fees and commissions of $227.67 million.
Our net fees and commissions increased 7.15% year-to-date as at September 30 or by $52.20 million, as we sought to increase our capital markets and brokerage activities.”
Burchenson also reported other corrective measures as total assets of $27.57 billion as at September 30, 2022 represented a decline of 9.31% or $2.83 billion over September 30, 2021.
“We continued to de-risk the on-balance sheet assets of our wholly-owned subsidiary VM Wealth Management, to safeguard against the sporadic changes in the bond and equity markets.
More resources were shifted towards strengthening and expanding our Corporate Lending Solutions and Margin Loan business lines. In light of this, cash and cash equivalents, resale agreements and investment securities declined 78.82%, 73.31% and 11.03%, respectively, year-over-year, while our loans receivable grew by 67.07% or $1.75 billion.
Conversely, the recent purchase of a commercial property boosted our property, plant and equipment by $713.38 million or 420.61% year-over-year.”
At the end of the third quarter of 2022, VMIL’s total liabilities declined by 4.95% or $1.28 billion, owing predominantly to the reductions in repurchase agreements, lease liabilities, income tax payable and employee benefit obligations.
In particular, Burchenson noted that “the 16.46% or $3.18 billion decrease in repurchase agreements was part of our de-risking strategy. The net profit recorded during the quarter contributed to the 1.77% or $54.09 million growth in retained earnings. However, this was not sufficient to offset the $1.64 billion deterioration in investment revaluation reserve, which resulted in a 34.04% or $1.55 billion decline in total shareholders’ equity.”
Burchenson we suspect saw Kingston Properties as a low hanging fruit that could be easily picked, and create an immediate positive impact on the balance sheet of VMIL.
Leverage Their Collective Real Estate Competence
Victoria Mutual full acquisition of Kingston Properties or a shareholding move to exercise more control over the company would be consistent and in line with the VM Groups vision.
VM Group wants to leverage the collective Real Estate competence embedded within the Group. The acquisition would also be in line with VMIL’s thrust to expand its real estate investments. The addition of KPREIT to the VMIL portfolio adds significant strength to its balance sheet and enhances its business development capacity.
VMIL will have an opportunity to diversify its real estate investments outside of Jamaica, based on KPREIT’s expansive portfolio in other Caribbean jurisdictions and North America.
Brian Frazer joins the VM Group
Brian Frazer Deputy CEO at VMIL and VMWM
Rezworth Burchenson is already a board member of Kingston Properties, and could push to get Brian Frazer to join him on the Kingston Properties board so as to increase participation in the strategic direction of KPREIT, going forward.
Brian Frazer joined the VM Group in September 2022 as the Deputy CEO at VMIL and VMWM, working closely with Burchenson.
Brian joined the team with over 20 years of experience in the financial services industry and has vast experience in Trading, Treasury, Asset Management,
Risk Management, Compliance, Corporate Governance, Operations, and Product Development.
Brian is expected to further foster VMIL’s growth and contribute to providing oversight to VMIL’s operations as well as all aspects of the fiduciary, financial and operating performance.
Skin In The Game
Burchenson we suspect is hoping that these strategic moves will be sufficient to offset the deterioration in investment revaluation reserve, and restore the billion decline in total shareholders’ equity at Victoria Mutual Investments.
For Rezworth Burchenson this is also personal as he has ‘skin in the game’ with a personal stake of 421,146 Kingston Properties shares and 6,400,330 in Victoria Mutual Investments.
Kevin Richards is listed as a senior manager and not a director at Kingston Properties, and he has more ‘skin in the game’ with 2,000,035 units.
In relation to the other question, Is Victoria Mutual Investments Making A Strategic Move To Acquire Kingston Properties?
We conclude that the answer for now is No. The holdings and arrangement as of January 2023 is exactly where Burchenson and VMIL wants to be. We suspect however that over time VMIL will increase its holdings and make Kingston Properties a full subsidiary.
To be updated
Businessuite 2022 Top 100 Caribbean Companies – US$ Profit After Tax
Businessuite Markets
Prestige Holdings Enjoyed A Strong Performance For First Quarter Of Fiscal 2024.
Christian E. Mouttet Chairman for Prestige Holdings has released the following Consolidated Unaudited Results for the Three Months Ended 29 February 2024
I am pleased to report that Prestige Holdings enjoyed a strong performance for the First Quarter of fiscal 2024. Group sales increased by 10% to $341 million from $309 million in the prior year, which resulted in a Profit Before Tax of $15.3 million compared to a profit of $11.6 million for the same period in 2023, a 32% increase. Profit After Tax, attributable to shareholders, increased by 25% from $7.8 million to $9.8 million. Cash flow from operations was $26.9 million and we ended the quarter with $100 million in cash having reduced total borrowings by $5.8 million. During the period we remodelled 2 restaurants and ended the period with 134 restaurants.
All brands posted solid performances during the quarter, with our Subway and Pizza Hut results driven by improved operations, efficiencies and strong demand for our innovative menu items and value offerings. Top line sales were impacted by the opening of five new Starbucks restaurants at Brentwood, Aranguez, O’Meara, St. Augustine and Amazonia Mall, Guyana, when compared to the First Quarter of 2023.
I am extremely pleased to report that KFC recently achieved a significant milestone of serving 150,000 Harvest Meals. The Harvest Meal Programme, which has been active for two years, is designed to provide unsold KFC food to participating NGOs in Trinidad and Tobago. This unsold food is carefully packaged and transported, following accepted global food safety protocols, and is then repurposed into delicious meals and served to the less fortunate. We are very happy to have the opportunity to positively impact the communities in which we operate by partnering with NGOs to provide meals to those in need.
As mentioned in my previous report, significant investment is planned in this financial year for new store development, including Guyana, as well as the remodelling of existing assets in Trinidad and Tobago. We expect these developments, as well as our continued brand initiatives, to continue to deliver positive results.
For More Click THIS LINK
GraceKennedy Limited’s recent acquisition of an increased stake in Spur Tree Spices (Jamaica) Limited has positioned it as the second-largest shareholder in the company. With an estimated 338,410,375 shares now under its belt, based on Spur Tree’s issued share count of 1,676,959,244 ordinary shares, GraceKennedy solidifies its influence in Jamaica’s culinary landscape.
Continued Expansion through M&A
This transaction marks the latest in GraceKennedy’s series of mergers and acquisitions (M&A) activities, reflecting the company’s aggressive growth strategy. Following its acquisitions of Scotia Insurance Caribbean Limited and Unibev Limited in 2023, as well as doubling its interest in Catherine’s Peak Bottling Company Limited to 70% in February 2023, GraceKennedy demonstrates its commitment to diversification and market expansion.
Spur Tree’s Strategic Evolution
Meanwhile, Spur Tree Spices is undergoing a strategic transformation, expanding beyond spices and seasonings to become a full-fledged food brand. With plans to launch more than two dozen new products on May 1 and a brand refresh to reflect its new focus, Spur Tree is poised for a significant market repositioning.
Diversification and Innovation
In the upcoming quarter, Spur Tree Spices is set to unveil an array of innovative products, including their much-anticipated line of dried spices. This strategic move represents the company’s foray into new categories and a substantial expansion of its product offerings. By diversifying its portfolio, Spur Tree aims to capture a broader consumer base and solidify its position as a leading player in the culinary industry.
Implications of the Acquisition
GraceKennedy’s increased stake in Spur Tree Spices not only strengthens its position in the spice market but also opens doors for collaboration and synergies between the two entities. As GraceKennedy continues to expand its presence through strategic acquisitions, it can leverage Spur Tree’s innovative product line-up to bolster its offerings and tap into new market segments.
GraceKennedy Limited’s acquisition of a significant stake in Spur Tree Spices marks a strategic milestone for both companies. With GraceKennedy’s growing influence and Spur Tree’s strategic evolution, the stage is set for a dynamic partnership that promises innovation, growth, and market leadership. As they navigate the evolving landscape of Jamaica’s culinary industry, GraceKennedy and Spur Tree Spices are poised to redefine the future of food, one spice at a time.
Businessuite Markets
ANSA McAL Group Announces Formation Of Joint Venture Company, Globus ANSA Private Limited, With Globus Spirits Limited In India.
A. Norman Sabga Executive Chairman of the ANSA McAL Group of Companies has announced the formation of the joint venture company, Globus ANSA Private Limited, with Globus Spirits Limited in India.
In a release posted on the Trinidad and Tobago Stock Exchange ANSA McAL confirmed that with effect from 4th April 2024, ANSA McAL Limited (“ANSA McAL”) entered into a joint venture agreement with Globus Spirits Limited (“GSL”) to establish Globus ANSA Private Limited (“GAPL”).
Each party will hold fifty percent (50%) of the issued and allotted ordinary share capital of GAPL.
“This collaboration signifies a new era in the Indian alcoholic beverages industry, driving innovation and growth, ‘
“Globus ANSA Private Limited will specialise in manufacturing and distributing alcoholic beverages across the Indian subcontinent, leveraging the strength of both ANSA McAL and Globus Spirits Limited,” said Mr. Shekhar Swarup, Managing Director for Globus Spirits Limited. “This collaboration signifies a new era in the Indian alcoholic beverages industry, driving innovation and growth, ‘he stated
Globus Spirits Ltd is one of the leading players in the Alcohol industry in North India distributing brands in the Consumer Segment including:
• GR8 Times.
• Rajputana.
• Globus Spirits Dry Gin.
• White. Lace.
• Governors’ Reserve Red.
• Governors’ Reserve Blue.
• Oakton.
• Laffaire. Napoleon.
Trinidad and Tobago conglomerate ANSA McAL Group has over 142 years of rich history representing many world-
renowned brands, including some of their own home-grown successes. The partnership marks a significant milestone in ANSA McAL Group’s journey, merging cultures and expertise to revolutionise the beer industry in India, with their icon Carib brand and leading the charge.
Norman Sabga Executive Chairman of the ANSA McAL Group of Companies, highlighted the immense opportunities in India and their commitment to delivering unparalleled value through this partnership.
“We are confident that our collaboration will allow us to seize the growing demand for high quality beverages by captivating palates with our distinctive products” he said
ANSA McAL is now poised to be an equal Shareholder of GAPL, an Indian company which
would produce, market, sell, distribute and retail beer and other beverages.
Businessuite Markets
Jamaica Broilers Group Reporting Strong Top and Bottom Line Performance for January 2024 Quarter
Christopher E. Levy Group President & CEO of Jamaica Broilers Group Limited now release the following unaudited financial results for the quarter ended January 27, 2024, which have been prepared in accordance with International Financial Reporting Standards (IFRS).
The Group produced a net profit attributable to shareholders of $1.3 billion, for the quarter ended January 27, 2024. The operations of the Group continue to be strong, and our gross margins are consistent with expectations.
Quarterly Group revenues amounted to $23.6 billion, a 4% increase above the $22.7 billion achieved in the corresponding quarter.
Our gross profit for the quarter was $5.9 billion, a 7% increase above the $5.5 billion achieved in the corresponding quarter in the prior year.
Jamaica Operations reported a segment result of $5.9 billion which was $448 million or 8% above last year’s segment result. Total revenue for our Jamaica Operations showed an increase of 2% over the prior year nine-month period. This increase was primarily driven by the growth in the sale and export of poultry and implementation of cost containment efforts.
Our US Operations reported a segment result of $3 billion which was $226 million or 8% above last year’s segment result. This increase was driven by increased volumes of poultry meat and eggs, as well as the implementation of cost management initiatives.
Total revenue for the US Operations increased by 3% over the prior year nine-month period.
We have begun to realise additional volumes through the US operations, which has resulted in increased financing requirements primarily around working capital.
For More Information CLICK HERE
National Insurance Fund (NIF) Plans to Increase Net Assets
Prestige Holdings Enjoyed A Strong Performance For First Quarter Of Fiscal 2024.
GraceKennedy’s Strategic Spur Tree Spices Acquisition: Positioning For Growth
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