On Tuesday May 3 boutique lender Eppley Ltd announced a renounceable rights issue to existing ordinary stock unit holders of up to 487,703 new ordinary shares priced at $650 each.

These will be made available to the shareholders on the record date for the rights issue which is Friday May 6, 2016. If all units are taken up, the company should raise $317 million in fresh capital.

The price on the new issue represents a premium on the current trading price of $580.76, the closing price on Monday.

Total units in issue for Eppleys are 796,249. In early April shareholders voted to raise the company’s authorised share capital from 800,000 ordinary shares to 1.3 million units.

Since news of the pending increase in tradable shares hit the market, the share price has increased some 45 per cent year over year, moving from $400 per unit at the end of March to a closing price of $580.76 on May 2.

On Friday April 29, the lender confirmed that it would be issuing additional ordinary shares to fund the continued expansion of business through a rights issue.

The last date on which transfers of ordinary stock units will be accepted for registration for participation in the rights issue is Wednesday May 4. Lead broker to the rights issue is Mayberry Investments Ltd.

The company previously tapped the market with a preference share issue raising $600 million at year end 2014.

Management said in the annual report that during 2015 they deployed the proceeds by selectively investing in credit mostly in Jamaica and the English-speaking Caribbean.

During the year highest returns came from insurance premium finance receivables with returns of 27 per cent, loans 17 per cent, leases with 13 per cent and cash at eight per cent, to give an average 14 per cent return on the portfolio.

For the year ended December 31, 2015, Eppley produced earnings per share of $70.94. Net asset value at year end was $438 per share.

Directors said the average effective cost of debt was about 10 per cent.

The year’s profit after tax in 2015 was $56.5 million, a 10.4 per cent increase over 2014.

For the first quarter ending March 31, 2016, Eppley’s profit after tax was $10.6 million compared to $8.7 million in the first quarter of 2015.

Earnings per share was $13.27 in the first three months of the year, which as noted in director’s comments, is a 3.5 per cent return on the company’s $377 per share listing price.

The company’s portfolio as of March 31 was $1.26 billion consisting mainly of loans, leases and receivables.

Nigel Clarke, chairman, and Nicholas Scott, managing director, noted in comments attached to the quarter’s financials that average income yield for the lender’s portfolio was 16 per cent.

“Our capital-at-risk was less than 0.1 per cent of capital. Our leverage was 3.2x of our capital at the end of the quarter and our average cost of debt was 10 per cent,” they commented, also noting that the company ended the quarter with $164 million of cash.

On March 30, the Board of Directors approved a dividend of $9.00 per share payable on April 20 to ordinary shareholders on record as of April 11.