ISP Finance Services chided for lack of risk- taking


ISP Finance Services chided for lack of risk- taking

...The company is playing it too safe says shareholders

Wednesday, October 30, 2019

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ISP Finance Services on Friday announced that its company has finished its last financial year with net profits amassing $43.6 million and total assets of $612.5 million. However, as the company seeks to maintain a healthy balance sheet and keep its finances in check, some shareholders are calling for more risks to be undertaken by the company.

A shareholder who was in attendance at the company's annual general meeting (AGM) held on Friday last, and identified himself as Wesley Thomas, said that even though the company is on a steady path they are too laid back and should seek to take more risk in securing greater profits for the company and shareholders.

“They are too laid back, they are playing it safe with the company's finances and I know it. They need to take more risk and seek to grow the company further,” he shared with the Jamaica Observer.

In the wake of many other companies putting additional public offering of shares on the market or seeking to pursue other strategies with the rationale of expanding their business operations, ISP's shareholders have began to question the management of the company's next move.

They said that they want nothing more than for the company to grow to a position of greater strength, even it means undertaking similar measures to move the company forward.

“I don't know how rigorously you are trying to acquire, very often we are hearing of many micro-financing companies, especially in this recent dispensation where the legislation (referring to the passing of the microcredit Bill pending) will result in a lot of them being up for sale. I don't know how rigorously you are pursuing this strategy,” said another shareholder, who also noted that the company while financially stable needs to also grow their finances some more before they can take on other activities.

Clifton Cameron, chairman of ISP Finance Services, in his company's defense offered that the company in seeking to grow its portfolio has embarked on some important measures and strategies to diversify product offerings and create new revenue streams.

He spoke on the use of technology as one such strategy which they are using vis-a-vis that of physical structures, which they say will help to reach a larger client base in record time.

“What we are trying to do is find a mix that works for us and to create the best efficiencies for us to generate revenue and manage cost,” he said.

Chief executive officer (CEO) of ISP, Dennis Smith, also said that with the advancement of technology and the introduction of social media, there is real proof that they can get to people effectively, which they have been doing.

“While we are not out there in block and steel, we use innovation to maintain presence,” he stated.

In viewing the shareholders concerns as valid, Smith charged that the company was not to be viewed as risk averse, as they are open to take necessary actions, including putting more equity in the market, if the need arises and that their company stands to benefit significantly. He made mention of a potential acquisition in Western Jamaica that the company was eyeing which fell through.

“It fell apart because we really couldn't come to some agreement that we felt was in our best interest,” Smith disclosed to the Business Observer.

In its annual report to shareholders for the last financial year ISP Finance reported a 20.7 per cent increase in assets over the last comparative period, with the company's gross loan portfolio growing by 31.0 per cent, moving from $514.1 million in December 2017 to $673.4 million in December 2018.

Interest income also grew by 6.6 per cent to $306.6 million for the year and equity increased by $34.1 million with a 13.6 per cent return on equity for the company.

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