Proven looks to integration of subsidiaries
Deals and acquisitions on trackSunday, September 19, 2021
BY DAVID ROSE
Following years of consistent acquisitions across various parts of the Caribbean region, Proven Investments Limited (PIL) is now looking to integrate its current subsidiaries along with its pending acquisitions under a core focus, brand and infrastructure.
This was revealed by co-founder and chief executive officer (CEO) of Proven Management Limited Christopher Williams at the company's virtual annual general meeting held last Thursday. Proven Management manages the operations of PIL on a management agreement.
PIL currently has four subsidiaries which operate under their pre-acquisition branding and on their own distinct infrastructure. These include International Financial Planning (IFP), Asset Management Company Limited, Boslil Bank Limited and Roberts Manufacturing Limited. Proven Wealth Limited (PWL), Proven REIT Limited and Proven Holding Limited already exist under the core Proven brand and integrated information technology structure.
“As it relates to the larger investments such as Wealth, IFP, Boslil and the newer acquisitions (Heritage and Fidelity), we have set up a sub-committee led by Garry Sinclair to drive the integration of those five entities. We have a board meeting coming up in November where we'll make our final decision on the strategy. The thoughts from the management team is to streamline our controlling interests in the financial entities under the Proven brand. We want to put those under one brand and have one operating infrastructure. We expect that project to be executed and drive performance for those entities”, stated Williams.
When Proven acquired Guardian Asset Management in August 2010, it rebranded it as PWL which formed the foundation of the company's branding. Williams noted that the critical questions which will lead the rebranding include, “1. Is it something that the clients will appreciate? 2. Is it something that will be able to drive profits up? 3. Is it something that we'll have cost efficiencies with over the long term?”
When questioned by Sunday Finance about the progress of the Fidelity Bank (Cayman) Limited and Heritage Education Funds International Inc, he noted that the deals should be closed by the end of PIL's financial year at the end of March. Proven successfully completed the 50.5 per cent acquisition of Roberts on June 8 with the remaining two acquisitions expected to bring its total assets above US$1 billion.
PIL net profit attributable to shareholders was up 11 per cent to US$1.56 million for the first quarter with total assets at US$698.06 million. Though PIL's core entities generated more cash from operations in the period, the consolidation of Roberts impacted the cash flow from operations which was US$1.68 million. Cash at the end of June was US$143.22 million with equity attributable to shareholders at US$166.14 million.
PIL is currently executing numerous real estate projects across Jamaica and Cayman Islands which it expects will drive profits when they're complete. However, the company has begun to look at diversifying its real estate exposure from residential to more commercial projects. Currently, most of PIL's real estate projects are in the Kingston 5, 6 and 8 areas where residential real estate demand has been explosive. It's Via and CÚsar real estate projects should be completed by November and December, respectively, while Gladstone Commercial, which will house its head office, is on track for August 2022.
“We have found a pretty good niche in real estate. We've found great locations. I expect over the next five years that we'll balance out our developments with a mix of commercial and residential. The board has felt we're too heavily skewed towards residential and we're dialling back a bit to put some additional focus on commercial. You'll see some more commercial developments and should see some improvement in our rental returns,” Williams pointed out.
“We still think there are a number of great locations in the country. We see opportunities to expand REIT, but the locations may vary. Proven is a Caribbean-focused private equity firm and we're currently executing in the Cayman Islands at this time. We also have operations in Bermuda, Bahamas and BVI which is where we'll pursue opportunities as well. We still see great opportunities in the REIT space.”
When questioned by shareholders about the expansion of PWL, Williams outlined, “We don't see a big need for increased block and steel locations in Kingston. However, we do see a need to expand our products into Cayman, Bermuda and The Bahamas, in particular. That's the focus to get us in those jurisdictions.” PWL has been expanding its digital footprint and has hinted that it will be looking to diversify the product reach for clients. Though this can include things such as alternative investments like cryptocurrency, PWL is also focused on global opportunities.
In closing out the meeting, Williams noted that the portfolio holdings did well despite the adversities of COVID-19. Though some shareholders queried the company's dividends, Williams reiterated that PIL has maintained its dividend policy amid the fluctuation in earnings in the pandemic.
“We continue to see tremendous upside opportunities. At the end of the next five years, we expect to see a solid Proven financial brand across several jurisdictions. In addition to that, you'll see our real estate developments continue to be iconic and see us go in and out of our portfolio holdings. I want to thank the board, management and staff from the various portfolio companies for staying focused and carrying us through this difficult period. We're extremely grateful that we haven't lost any team members throughout this period and vaccination efforts for our team is excellent. We're close to 100 per cent with our portfolio companies and we're proud of that fact.”