Proven reports solid growth in all business lines for third quarter

Business

Proven reports solid growth in all business lines for third quarter

Diversification of assets reaping benefits

Sunday, February 16, 2020

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Proven Investments Limited (PIL) is reporting solid core growth in all its business lines for the quarter ended December 31, 2019.

With another quarter of double digit growth, PIL has again outperformed the results for the corresponding period with net profit attributable to owners of the company (NPAO) for the third quarter totalling US$26.45 million, while NPAO adjusted for the extraordinary gain and associated charges amounted to US$8.47 million. This is a 43.50 per cent increase in core earnings from the US$5.90 million earned in the same period last year.

Commenting on the positive performance Proven's President and CEO Christopher Williams emphasised that the third-quarter performance resulted from “the solid execution of strategic plans across the portfolio companies with emphasis to grow core revenues and improve operating efficiency. These were realised in addition with other strategies used to continue to create shareholder value”.

He described the performance as “commendable as we not only demonstrate the strength of our diversified business model but we delivered another quarter of strong growth”. Arising from the above-par performance the board of directors has approved payment of dividend totalling US$0.0032 per share to all ordinary shareholders on record as of February 24, 2020, to be paid on March 6, 2020.

This represents an annualised tax-free dividend yield of 5.82 per cent based on the average share price of US$0.265 for the period ended December 31, 2019.

PERFORMANCE REFLECTS ORGANIC GROWTH

With operations under three distinct business strategies, namely: private equity in the financial services and real sector; real estate and treasury/PIL proprietary, PIL not only continues to grow and strengthen its portfolio, but through the diversification of its core revenue streams, has been able to provide the bonus for its private equity shareholders.

Williams pointed to the positive performance of associated companies. He highlighted the role of Boslil Bank Limited (Boslil), JMMB and PROVEN Wealth as top performers for the period with each having contributions in excess of 20 per cent of net profit.

Williams noted that PIL continues to focus on the other associated companies such as International Financial Planning Limited (IFP), ACCESS, PROVEN REIT and Treasury which have contributed more significantly to the bottom line. He outlined the private equity holdings' contribution to PIL's bottom line.

PROVEN Wealth Limited (PWL)

PWL reported profit attributable to equity holders of US$2.39 million for the period ending December 31, 2019, which comprised 9.04 per cent of the group's NPAO. Revenues generated by PWL totalled US$8.54 million with net interest income and other income accounting for 25 per cent and 75 per cent respectively.

Pension management income, securities trading and fees, and commission were the top-performing line items during the period. Total assets of the PWL experienced a 10.20 per cent increase from US$106.9 million as at December 31, 2018 to US$117.8 million as at December 31, 2019.

Boslil Bank Limited (Boslil)

Boslil experienced another successful period, as net profit totalled US$4.40 million, resulting in US$3.16 million in profit attributable to equity holders being realised. This contributed 11.93 per cent to the group's NPAO. Boslil contributed 48.62 per cent to total net interest income reported by the group.

Efficiency ratio registered a marked improvement from 55.45 per cent as at December 2018 to 45.65 per cent as at December 2019.

International Financial Planning Limited (IFP)

The company reported revenues and net profit of US$4.38 million and US$0.99 million respectively. This resulted in a NPAO contribution to the group of 6.95 per cent for the period ended December 31, 2019.

PIL is currently in the process of re-engineering this business and anticipate revenue enhancement and cost synergy measures to positively impact the entity in the medium-to long-term.

JMMB Group Limited

JMMB is an associate company and contributed US$5.62million (projected) in the form of share of profits for the period ended December 31, 2019. This investment provides exposure to the onshore banking and insurance sub-industry and aligns with the company's core investment strategy.

JMMB's expanding presence within the region is consistent with PROVEN's ongoing strategy to diversify the portfolio of investments across the 24 countries of the Caribbean and Latin America.

Access Financial Services Limited (AFSL)

As a result of reduced holdings from 49.72% to 24.72 per cent in September 2019, AFSL is now treated as an associate company, resulting in the recognition of a share of its profits, instead of a consolidation of its results into PIL's consolidated performance.

AFSL's contribution for the nine-month period ended December 2019 amounted to US$1.05 million. Thus, in aggregate, the company contributed 3.98% to NPAO over the nine-month period.

Dream Entertainment

PIL acquired a 20 per cent equity stake in Dream Entertainment Limited for a total of $75.28 million. This is consistent with PROVEN's strategic thrust to identify, invest in, and grow, viable real sector private companies.

Dream Entertainment Limited has over the years provided enviable entertainment products that cater to a growing audience that is primarily beyond the Jamaican shores. This acquisition not only aligns with PROVEN's core Investment Strategy within the Real Sector, but also with its risk-to-reward objective.

Real Properties Limited (RPL)

RPL reported profit attributable to equity holders of US$1.43 million. This performance contributed 3.39 per cent to group NPAO. Total assets stood at US$36.51 million as of December 31, 2019, which represents a 24.84 per cent increase compared to US$29.24 million reported for the same period last year.

This subsidiary continues to diversify its portfolio of real estate holdings which as at December 31, 2019, included three rental income properties and eight developmental sales projects; all at various stages of the development cycle. The company continues to closely monitor the local and international real estate markets for new opportunities.

PIL has indicated that it will be going to the market with an additional public offer (APO) of ordinary shares and is awaiting the final regulatory approvals. The APO which is set to open before the end of this month has Sagicor Investments Limited entering an agreement to underwrite the APO to the tune of US$50 million and to act as co-arrangers with Proven Wealth subsidiary acting as lead arrangers.

PIL is raising funds to ensure that it has sufficient access to equity to support the short-to medium-term strategic focus tee up in the pipeline.


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