After share buy-back programmes picked up steam between 2020 to 2024, companies on the Jamaica Stock Exchange (JSE) have redirected their cash towards paying more dividends to shareholders and bolstering their balance sheets to speed up their growth initiatives.

Most companies on the JSE pay dividends to shareholders, but very few companies engage in share buy-back programmes. The JSE’s 2023 yearbook revealed listed companies paid a collective $26.13 billion in dividends during 2023, a 20 per cent decline from the $32.75 billion paid in 2022. A dividend represents a source of direct cash for investors while a share buy-back can improve the liquidity or trading of a stock.

Some of the companies which have engaged in these buy-back programmes over the last five years include JMMB Group Limited (JMMBGL), GraceKennedy Limited (GK), Sygnus Credit Investments Limited (SCI), Eppley Caribbean Property Fund Limited SCC – Value Fund (CPFV), First Rock Real Estate Investments Limited and Kingston Properties Limited (KPREIT).

GraceKennedy Limited had a one-year share buy-back between November 2023 to November 2024 where 6.405 million ordinary shares were repurchased for $498.22 million. This meant GK bought nearly two-thirds of its 9.95 million ordinary shares target which represented the maximum one per cent limit for the programme. GK did not extend the programme which was executed on the JSE and Trinidad & Tobago Stock Exchange (TTSE).

“We did have a share buy-back programme over the last year, and we think that served its purpose at the time. A share buy-back programme is not free as it requires the company to use its cash resources to buy back shares. Therefore, we continue to evaluate what’s the best way going forward,” said GK Group Chief Financial Officer Andrew Messado at the company’s May 28 annual general meeting.

Share buy-backs involve a company buying back its own shares from shareholders on the open market or by tender. This reduces the number of shares in circulation and grows the overall ownership interest of the remaining shareholders. The reduced number of shares also means an improvement in the earnings per share calculation and more dividends for investors on a per share basis.

Former GK CEO Donald “Don” Wehby told shareholders at GK’s May 2023 AGM that the company was pursuing a share buy-back programme based on the company’s shares at low relative valuations. His comment came against the company’s then 10.46 price to earnings (PE) ratio when it traded around $77 on the JSE.

GK previously repurchased 4.12 million ordinary shares at a cost of $245.46 million between October 2013 to December 2014. Its latest programme was delayed due to the need for regulatory approval by the Trinidad and Tobago Securities & Exchange Commission (TTSEC) where it is a reporting issuer. Thus, the company’s buy-back programme which was announced in March 2023 was not approved until September 2023.

GK is currently aiming to achieve US$2.1 billion in consolidated revenue and US$250 million in profit before tax, with 70 per cent of revenue and profits originating outside of Jamaica by 2030. GK reported US$1.1 billion ($160.36 billion) in consolidated revenue and US$79 million ($12.34 billion) in PBT during 2024. Forty-two per cent of GK’s revenues were earned outside of Jamaica and 41 per cent of GK’s profits were earned outside of Jamaica.

That growth strategy also spills over to GK shareholders as the company has increased its dividend payments from $1.54 billion ($1.55 per share) in 2019 to $2.35 billion ($2.37) in 2024. GK has paid out $1.62 per share in dividends over the first nine months of 2025.

“At this point, especially in line with our 2030 vision, what we’re really looking for now are acquisition targets and we are trying to ensure that we can use our resources to acquire additional businesses, and those businesses will further unlock value in terms of accretive to the group and grow our profitability. So, at this point in time, our focus is more towards redirecting the funds to future investments rather than the share buy-back,” Messado added.

JMMB Group launched its share buy-back programme in September 2023 with the company repurchasing 1,074,458 ordinary shares for $23.52 million between September 2023 to August 2025. The company’s latest transaction took place on August 22 where it bought 155,676 ordinary shares at an average $19.56 per share. This is below the group’s book value of $27.48. JMMBGL has not repurchased any shares on the TTSE.

JMMBGL began ramping up its share buy-back between February to March 2025 as it repurchased 868,782 ordinary shares for $19.11 million. However, the $300 million buy-back target pales in comparison to the $488.89 million dividend paid during the 2025 financial year. Also, the group must carefully allocate capital for different capital events such as Basel III and investment opportunities like real estate and private equity.

Although JMMB Group’s share buy-back programme isn’t as large as other listed companies, it has benefited from Sagicor Financial Company Limited’s (SFC) share buy-back programme over the last five years. JMMBGL’s stake in SFC has moved from 22.52 per cent in March 2020 to 24.50 per cent in March 2025 without purchasing any new shares. JMMBGL is SFC’s largest shareholder.

SFC repurchased 16,801,536 ordinary shares for US$61.7 million between 2020 to 2024. The number of repurchased shares is equivalent to 11 per cent of SFC’s ordinary shares at the end of 2019.

However, SFC itself is recalibrating its strategy and is instead moving to increase its dividend payouts rather than ramp up its share buy-backs. The company has increased its dividend payments from US$0.225 in 2023 to US$0.24 in 2024 with the 2025 figure set at US$0.27.

“We intend to keep our normal course issuer bid active. As we’ve accelerated our engagement with the equity market, one of the things that has resonated with some of our new investors is the dividend stream and its growth. If you look at what we’ve done with the dividend, we’ve increased it by 12.5 per cent, and we may start to tilt the return of capital towards dividends as opposed to buying back so much stock every year,” said SFC President and CEO Andre Mousseau on a March 14 earnings call.

Sygnus Credit Investments Limited (SCI) launched its US$9 million share buy-back programme in June 2023 which will exist for three years. SCI repurchased 10,274,482 JMD ordinary shares and 136,525 USD ordinary shares for US$829,726 between June 2023 to June 2024. There has been no subsequent disclosure around share repurchase transactions. However, SCI’s dividend payment for the June 2025 period was US$3.20 million which represents another year-on-year increase as the company focuses on growth.

Eppley CPFV and First Rock have not engaged in share buy-backs since 2023 with the former increasing its dividend payments to shareholders while the latter focuses on recalibrating its business. CPFV repurchased 2.11 million shares relative to the 3.80 million shares target. CPFV repurchased BDS$1.44 million (J$113.02 million) worth of shares while First Rock repurchased US$401,561 worth of shares.

KPREIT’s board approved a new two-year share buy-back programme in April 2024 to purchase up to 0.5 per cent of the company’s ordinary shares. However, KPREIT has instead sought to raise additional equity and focus on growing its property portfolio to meet its near-term targets.

The slowdown in share buy-backs on the JSE contrasts the developments taking place in the United States where the value of announced buy-back programmes exceeded US$1 trillion earlier this week. Apple Inc’s buy-back programme is valued at US$100 billion while Nvidia Corporation announced a US$60-billion buy-back programme on Wednesday.