Following a successful initial public offering (IPO) and capital injection of J$908 million, Mayberry Jamaican Equities Ltd (MJE) was welcomed on the Jamaica Stock Exchange on July 31, 2018.

In their newly released unaudited third-quarter report, which includes financial results for the period July-September, 2018, the company’s board of directors noted that MJE registered $6.76 billion in total comprehensive income for the nine-month period ended September 30.

Other highlights included: total comprehensive income –$4.25 billion; total revenue, net of interest expense – $657.8 million; net profit $250 million; net book value per share – $13.01.

Year-to-date highlights for the nine months of 2018 included: total comprehensive income –$6.76 billion; total revenue, net of interest expense –$1.26 billion; net profit – $690 million, net book value per share –$13.01.

Here are some of the main issues detailed within our report:

INVESTMENT ENVIRONMENT

The company currently holds shares in 31 companies listed on the main and junior markets of the Jamaica Stock Exchange (JSE).

For third quarter 2018, the JSE Main Market Index grew by 52,584 points or 17.2 per cent up from 305,736 points to 358,320 points when compared to second quarter 2018. The JSE Junior Market also grew by 358 points or 11.8 per cent at the end of September 2018 to 3,395 points. Both markets continue to reflect increased activity.

Jamaica’s macroeconomic indicators remained positive for the third quarter with the net internationaol reserves (NIR) above adequate levels at US$3.03B. Fiscal performance continued to be strong and market interest rates were at record lows. As institutional investors continue to raise capital in the market, the Jamaica Stock Exchange maintained its strong ranking when compared to other exchanges worldwide.

Total assets grew to $18.4 billion for the third quarter 2018 compared to $7.5B for the comparative quarter 2017. This represents a $10.9B increase or 146.7 per cent in our asset base due mainly to increased value of quoted equities — particularly, Lasco Financial Services Ltd, Caribbean Producers (Jamaica) Ltd, Blue Power Group Ltd, Iron Rock Insurance Company Ltd, and Supreme Ventures Ltd.

Total Liabilities increased over 3rd quarter 2017 by $2.74 billion to $2.8 billion or 45.8 times. This resulted from an increase in accounts payables of $444 million and the addition of a corporate loan note of $2.2 billion during the period.

SHAREHOLDERS’ EQUITY

MJE’s capital base continues to grow and remains in good standing, resulting from higher profitability, with retained earnings moving from $3.8 billion to $5.6 billion and fair value reserves of $8.6 billion, up from $2.1 billion.

NET ASSET VALUE (NAV)

Net book value per share moved to $13.01, a 110.9 per cent increase over the corresponding period in 2017, due to an increase in equity investments of $11.23 billion. This represents a balance of $16.95 billion as at September 30, 2018, moving from $5.72 billion at the end of third quarter 2017.

Revenue performance for this quarter experienced significant growth as MJE reported an after-tax profit of $250 million for the quarter ended September 30, 2018. This resulted in earnings per share (EPS) of $0.21 and represented a three-time increase over the same period in 2017.

This was mainly due to the revaluation of the equities classified as fair value through profit or loss (FVPL).

TOTAL COMPREHENSIVE INCOME

Total comprehensive income for Q3 amounted to $4.25 billion, compared to $295 million for the corresponding quarter of 2017; an increase of $4.0 billion or 13 times. This was due to an increase in the equity reserve, resulting from revaluation gains booked for stocks held in the current portfolio.

TOTAL REVENUES

Net revenues increased by $634.8 million over the corresponding period last year to reach $657.8 million. This increase was driven by a 100 per cent increase in unrealised gain on investment revaluation, in addition to dividend income increasing by 138.4 per cent or $40.3 million. Dividend income earned resulted mainly from holdings in Supreme Ventures Limited, Caribbean Producers (Jamaica) Ltd, Jamaica Money Market Brokers Ltd, and Blue Power Group Ltd.

OPERATING EXPENSES

Operating expenses increased by $381.7 million or 48 times when compared to the corresponding quarter in 2017 due to incentive and management fees for Investment management services and, also, Legal and Professional fees for the Corporate loan note.