Facey on higher profit drive

Facey on higher profit drive

BY STEVEN JACKSON Business reporter jacksons@jamaicaobserver.com

Tuesday, May 19, 2015

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REAL estate conglomerate Pan-Jamaican Investment Trust Limited (Pan Jam) made $543.7 million net profit for its first-quarter ending March 2015 or 36 per cent higher year-on-year due to the performance of its associated companies led by Sagicor Life Jamaica.

Also during the quarter a large unnamed tenant terminated its lease early resulting in a lump-sum payment to Pan Jam.

"Our net profit for the quarter shows significant improvement over the comparable period last year. This is largely the effect of a stronger share of results of associated and joint venture companies, led by Sagicor and Chukka, set against weaker results from investments," stated Pan Jam president Stephen Facey, in notes accompanying the financials released to the Jamaica Stock Exchange this week.

Pan Jam holds investments in property development, tourism, insurance, banking, manufacturing, retail trade, financial services and investment. It really benefited from its share of earnings from associated and joint venture companies for the quarter which increased by $129 million to $443 million.

Pan Jam holds 31.6 per cent of insurance giant Sagicor; 20 per cent in Chukka Caribbean Adventures Limited, an attractions tour; 35 per cent stake in Caribe Hospitality Jamaica Limited, a property development company; and has 50 per cent holding in Mavis Bank Coffee Factory Limited. The Mavis Bank operation is held under parent company New Castle (which includes sauce brands Walkerswood, Jamaica Joe and Busha Browne).

The bulk of its earnings from associates came from the $421 million from Sagicor or 37 per cent higher year-on-year.

"Chukka enjoyed significantly improved results, principally arising from increased revenue. Mavis Bank continued to experience losses, though this was expected in light of the sub-optimal availability of beans currently faced by the industry," stated Facey.

Hardware & Lumber reported net earnings of $34 million for the quarter, compared to $40 million for the same period last year.

Pan Jam's total assets amount to $26.5 billion with relatively minimal liabilities up to March 31, which resulted in total equity of $21.3 billion.

Its core revenues, mostly comprised of rentals, decreased to $488 million from $536.6 million a year earlier. That was due to its occupancy levels dropping from 97 per cent to 87 per cent due to the lease buy-out of a tenant. The company continues with the construction of its Courtyard/Marriott Hotel project in New Kingston. Facey expects to open the hotel later this year. Facey commended the Government for its performance under the International Monetary Fund (IMF) targets, but included a caveat.

"We remain concerned by the lack of a clear roadmap for the improvement of other necessary ingredients to strong growth. These include, but are not limited to, meaningful improvement in development control and the approval process, widening of the tax net and sustained reduction in the occurrence of crime," stated Facey.

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