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Will The Jamaica Stock Exchange Step-up And Lead The Charge For A Single Regional Stock Exchange by 2020? – Part 2/3

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The Unique Peculiarities of Each Exchange Market

Barbados

Edwin Thirlwell Executive Chairman of BICO Limited, which is listed on the Barbados Stock Exchange (BSE) in an article published in Barbados Today, is reported to be lamenting the lack of inactivity on the BSE which he says is depressing the share price of his ice cream and Cold Storage Company.

Expressing dissatisfaction at the level of BICO’s share price in trading on the Barbados Stock Exchange, Thirlwell said, “Due to the fact that shares were not changing hands, along with high levels of compliance and the risk-averse nature of shareholders, the BICO share price was lower than it ought to be.”

The Barbados Stock Exchange according to Thirlwell is not buoyant by any means. “You only need to listen to the news every night, it tells you what is happening in Jamaica and it tells you what is happening in Trinidad and when it tells you what is happening in Barbados [little or] no trading. It is a difficult situation. There are a diminishing number of listed companies,” said Thirlwell.

Trinidad and Tobago

John G. Cozier writing in an article entitled “The Evolution of Stock Markets in the Caribbean: From 1969 and Beyond” dated February 2010, made a number of observations about stock/share ownership in Trinidad and Tobago, which are still relevant today.

Cozier contends that stock ownership in Trinidad and Tobago tends to be highly concentrated thereby resulting in a stock market of limited size. This he says is attributed to a number of demand and supply factors such as:

1) Low personal incomes;

2) Relative financial naïveté among the general population;

3) Strong preference towards commercial bank credit which can be sourced relatively cheaply. In addition, many established enterprises are usually guaranteed a ready supply of bank credit because of credit criteria and partly because of interlocking directorates;

4) Great reluctance to dilute family ownership, thereby relinquishing control of their firms. It is believed that the strong preference towards commercial bank credit among firms and the reluctance to dilute family ownership are inextricably linked. However, there have not been studies on this topic;

5) The desire to minimize public availability of information about company operations, finance and profitability; and

6) The small size and limited investment horizons of many local businesses in less developed countries.

7) Several weaknesses prevailing within Trinidad and Tobago’s capital markets. It is determined to be narrow and thin based on the criteria of volume of transactions, the number of market participants and the degree of price volatility. Furthermore, the market is deemed to be inefficient with respect to offering equal prospect of gain to all market participants.

Jamaica

In relation to Jamaica John Cozier cited the following observations still very much at play today pointing to a number of structural changes that have occurred in the Jamaican market from 1983 – 1984. These conditions he said are necessary conditions for the development of an efficient market. These conditions include:

1) A large number of new investors;

2) A large increase in trading, both in volume and in value;

3) A more effective use of information by market agents; and

4) A tendency for stock prices to more readily reflect important market information.

A Regional Population Not Inclined To Take Risk?

Edwin Thirlwell pointed to another very important factor and element in the considerations for a regional stock exchange – a regional population not inclined to take risk.

In the Barbados Today article Thirlwell is quoted as saying “So in fact, what we have is a shorter list of quoted companies and a population not inclined to take risk at the moment. In fact, I think the profile of the entire nation is risk-averse at the best of times and even more so at the moment. So in fact, there is very little trading. And I think if you look at all the listed companies including people like Goddard [Enterprises Limited] who trade right around the region, they are well below their net asset value.”

John Jackson noted Jamaican financial analyst and publisher of ICInsider.com is of the view that the evidence is clear, “It is not so much that our people are that risk averse, they have not been educated in the area of investments. What we don’t learn early we tend to pass over. As far as I am aware Jamaica is the only country in the WI that has had a continuous public educational program going based on the interest of a number of individuals plus institutions.”

Speaking with Businessuite Magazine Jackson indicated that from his observation most investors buy into the IPOs and are not active in the secondary market. They leave the after IPO trading to “professionals.” Trinidad companies he said have not been geared to individual investors hence the very high stock prices and limited trading. They need stocks splits like a desert needs water, in order to get more players in the action. The one stocks market is not going to change that.

Jackson finds the subject of a single market “Interesting” but as he has said repeatedly elsewhere “We are barking up the wrong tree.” What is first needed he says is “a Caribbean capital market where capital is free to move from country to country at least for investment purposes. Such a market will see companies being free to offer securities across the region rather than in just their own territory. Also holding back the markets are the economic factors that stifles a dynamic private sector and encourage nationals to look outside the region for investments when they would do far better regionally. The most telling of it is the performance of our market that telegraphs the opportunities available to make money. Most other markets in the region are based on relatively small population with profits of the companies growing slowly. That does not excite.” He told Businessuite

In Part 3 SMEs Can Transform Their Financial Performance by Listing on the Stock Exchange

 

Editorial Note:
The quotes above expressed by Marlene J. Street-Forrest General Manager Jamaica Stock Exchange (JSE) are her personal views on the matter and do not necessarily reflect the views of the JSE board.

Sources:
http://jamaica-gleaner.com/article/focus/20160626/marcia-forbes-caribbean-stock-exchange
https://www.barbadostoday.bb/2017/03/11/bicos-shares-trading-way-below-value-thirlwell/
http://www.jamaicaobserver.com/A-look-at-stock-exchanges-across-the-Caribbean_7901820
http://sta.uwi.edu/conferences/09/salises/documents/J%20Cozier.pdf

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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Businessuite Markets

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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Businessuite Markets

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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Businessuite Markets

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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Businessuite Markets

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.

For More Information CLICK HERE

 

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