To seek approval to issue preference shares next month

Eppley Limited, a Musson Investment subsidiary that manages a portfolio of commercial credit, has posted a 55 per cent increase in third quarter net profit.

The company on Friday reported profit after tax amounting to $9.8 million for the period ending September 2013 compared to $6.3 million over the same three months last year.

Eppley’s principal activity is insurance premium financing, lease and loan financing. Net interest income was three per cent higher at $13.6 million while other operating income doubled to $5.9. Administrative expenses increased by 37 per cent to $9.2 million.

“Our goal is to generate consistent income with modest risk. Currently, we believe that commercial credit, particularly areas out of favour with traditional lenders, offers attractive returns relative to the risk of default,” stated the financial report, signed by Eppley chairman Nigel Clarke and managing director Nicholas Scott.

“Among fixed income investments, we prefer commercial credit to investing in bonds while interest rates are at their lowest levels in decades,” the report said.

The executives noted that, in line with its strategy, it has deployed about $250 million to commercial loans and leases since June. At the end of the review period, the company’s portfolio amounted to $437 million with an average yield of 14 per cent and tenor of 18 months.

Eppley will seek approval from shareholders to issue preference shares at an extraordinary meeting on November 12. The company intends to make the preference share issue in order to further expand its portfolio.

Eppley listed on the Jamaica Stock Exchange Junior Market in July, after raising $82.6 million through an invitation for subscription for 218,999 shares in the company, at a sale price of $377 per share.

It intended to use the proceeds of the IPO to fund credit facilities and to pay the expenses of the invitation.

PHOTO: Nigel Clarke

Eppley Managing Director Nicholas Scott