Friday 17 January, 2020

Jamaican Teas considers another stock split

Jamaican Teas directors will meet to consider a possible increase in the authorized share capital as well as a sub-division of the companies issued and outstanding shares. 

Jamaican Teas directors will meet to consider a possible increase in the authorized share capital as well as a sub-division of the companies issued and outstanding shares. 

Manufacturing and real estate company, Jamaican Teas is reviewing the possibility of approving a stock split, the company advised on Tuesday.

Company director John Jackson said the exercise is aimed at increasing the liquidity of the stock, which trades on the Junior Market of the Jamaica Stock Exchange (JSE).

The company indicated that on January 14, directors will meet to consider a possible increase in the authorized share capital as well as a sub-division of the companies issued and outstanding shares. 

Shares in issue are currently numbered 695,083,459 with a market value of $4.2 billion.

The stock closed at $6.15 per unit in trading on Tuesday, January 7. Value has declined by 2.4 per cent week to date and quarter to date. 

Jackson told Loop News: "The stock split is to make shares more liquid and allow them to trade more freely.

“There are no plans for a rights issue."

The proposals will be subject to the approval of Jamaican Teas shareholders. If approved, this will be the third split by the company.

In April 2017, Jamaican Teas shareholders approved a two-to-one split of the stock. This followed another split in 2016 after which the price climbed close to $8 per share.

At year-end September 2019, Jamaican Teas doubled profit despite spinning off its investment arm and listed a new company, QWI Investments. Jamaican Teas owns 34 per cent shareholding in that company.

In October 2019, the company also purchased the 50 per cent of Bay City Foods (BCF), located in Montego Bay, making it a wholly-owned subsidiary of the group.

At year-end September, net profit attributable to Jamaican Teas for the year increased by $201.2 million from $198.5 million to $399.7 million, resulting in earnings per share from continuing operations of 57.8 cents (2017/8 – 29.0 cents).

Company directors, in remarks attached to the fourth-quarter report, said investment properties produced $72.3 million in gains in 2019 compared with $24.8 million in 2017/18. 

However, the main tea business suffered a temporary setback in sales in the USA market due to a main distributor there right-sizing its inventories.

During the fourth quarter, QWI Investments Limited, the company established to hold the group’s equity investments, offered shares for sale to the public in September 2019.

The issue was oversubscribed with $1.2 billion raised from over 4,800 new shareholders. Trading in QWI’s shares began on the JSE main market on September 30, 2019.

Following the IPO, Jamaican Teas and KIW International together control 34 per cent of the company.

Under its construction segment, subsidiary H Mahfood and Sons Limited’s is proceeding with a new apartment complex in the Manor Park from which sales of units are expected this year.

Jackson told Loop News that Jamaica Teas is considering the acquisition of more properties during 2020.

“We may be acquiring some properties this year,” he said.

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