JMMB adds new board member to Sagicor Financial Company Company stake in regional insurer increases from share buyback
Company stake in regional insurer increases from share buybackWednesday, June 09, 2021
BY DAVID ROSE
Less than two years after becoming the largest shareholder in Sagicor Financial Company (SFC), JMMB Group Limited (JMMBGL) has added another one of its board members to SFC's board as the company's stake in the financial conglomerate has increased from 22.52 per cent to 22.68 per cent.
JMMB initially acquired its 22.52 per cent SFC stake on December 5, 2019, when it converted 33,213,764 Class B shares in Alignvest Acquisition II Corporation (ALC) on a one-for-one basis into SFC shares. JMMBGL acquired these shares via a private placement at a cost of US $250 million ($34.40 billion) or CAD $332.14 million on a converted price.
SFC was subsequently listed on the Toronto Stock Exchange and delisted from three other markets. JMMBGL was able to appoint two directors because of their associate stake which they acquired in SFC. JMMBGL appointed its chairman, Dr Archibald Campbell, and its CEO, Keith Duncan, as appointees to the board.
At Friday's special annual shareholders meeting for SFC, Dennis Harris was confirmed as a director by shareholder vote subject to regulatory approval. Harris sits on the JMMBGL board and chairs the Risk Committee of the board. Harris is the managing director of Unicomer (Jamaica) Limited which trades as Courts. He is also the executive leader of Unicomer Caribbean IT operations and head of USA Courts stores in New York.
SFC is the ultimate parent company of Sagicor Group Jamaica Limited (SJ) with a 49.11 per cent stake. Stephen Facey is the other Jamaican who sits on SFC's board. Facey is the CEO of Panjam Investments Limited which owns 288.2k shares in SFC or a 0.2 per cent stake. The other directors of SFC include Timothy Hodgson, Dodridge Miller, Professor Sir Hilary Beckles, Peter Clarke, Mahmood Khimji, Stephen McNamara, Reza Satchu, Aviva Shneider, Jonathan Finklestein, Gilbert Palter, and Monish Dutt. Hodgson and Satchu are affiliated with Alignvest Management Corporation with Satchu being a current managing partner. Both directors along with Khimji were appointed to the board of SJ in May 2020 with Satchu stepping down in August with Palter joining SJ's board in August.
Despite JMMBGL's consolidated net profit improving to $4.02 billion up to December 2020, its net profit attributable to shareholders declining by two per cent to $3.85 billion. JMMBGL didn't account for SFC's share of profit in their third quarter due to SFC's financials undergoing an audit. SFC posted a US $31.5 million ($4.62 billion) net profit attributable to shareholders for its fourth quarter which compared to US $11.5 million in the prior period. This would have resulted in JMMBGL accounting for US $6.53 million ($946.1 million) for the December quarter which would have pushed the nine months earnings to shareholders rising to $4.79 billion.
SFC saw a massive rebound in its first quarter as they generated a US $31.5 million ($4.62 billion) in net profit attributable to shareholders versus the US $29.3 million net loss posted in the prior period when COVID-19 collapsed asset prices. A large reason for this improvement was due to the SJ's disposal of Playa Hotels and Resorts which resulted in SFC classifying for Playa as an investment security. Sagicor Life and Sagicor USA posted net profits of US $8.3 million and US $1.1 million for the first quarter.
JMMBGL's audited financials have been delayed to June 15 because of the novel coronavirus pandemic slowing the audit process. JMMBGL's share of profit for its fourth quarter from SFC would have been US $7.14 million ($1.07 billion). JMMBGL posted a record $7 billion net profit for its 2020 financial year thanks to its SFC acquisition in December 2019. JMMBGL has benefited from a US $0.05625 dividend paid by SFC each quarter which equates to US $1.87 million ($280.24 million). JMMBGL's latest payment will come on June 17 when SFC's payment will be made to shareholders.
SFC's normal course issuer bid expires on June 21 which comes a year after the company targeted eight million shares to purchase and cancel under the share buyback programme. Up to March 31, SFC had purchased and cancelled 3,209,100 shares worth US $14.4 million under the programme. SFC purchased and cancelled 291,321 shares in April while its outstanding share count at the end of March was 146,428,904. SFC's book value at the end of March was US $7.58 or CAD $9.63 compared to a share price of CA 6.85.
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