Sterling Investments achieves record profit

Sterling Investments achieves record profit

Number of shareholders increased by 67%

Business reporter

Sunday, May 03, 2020

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With $101.2 million in net profit recorded for its 2019 financial year ended December 31 — an 88 per cent increase when compared with the previous corresponding period — Sterling Investments (SIL) has reported its highest profit since its listing on the Jamaica Stock Exchange in 2014.

This growth, according to SIL in its report to shareholders posted on Thursday, is a result of higher interest income and equity gains.

The investment holding company, which is managed by Sterling Asset Management, for the period under review, recorded a net interest income of $98.3 million, a 19.6 per cent increase when compared with the $82.2 million recorded in the previous corresponding period.

In addition, SIL indicated that its total assets for the 2019 financial year amounted to $1.6 billion, an increase of 35.2 per cent over the $1.2 billion recorded in the corresponding period in 2018. This growth was mainly funded by the proceeds of the rights issue held during the financial year under review and driven by an increase in the prices of the securities in SIL's portfolio.

According to Chairman Derek Jones, in a display of confidence in the company, the number of shareholders increased by 67 per cent over the prior corresponding period.

“During 2019, SIL continued to execute its value investing strategy. The company took advantage of the decline in global asset prices in early 2019 and purchased a variety of undervalued US dollar bonds. The price of these bonds rose substantially later in the year. Similarly, the purchase and sale of undervalued local equities enabled the company to enjoy attractive capital gains,” Jones stated.

Earnings per share (EPS) totalled $0.28 per share, this was due to the full impact of the 5:1 stock split which was effected in November 2018.

According to SIL, without the stock split, the EPS would have been $1.35 compared to $0.64 the prior year, reflecting an increase of 110.9 per cent.

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