Thursday 17 October, 2019

JMMB looks to hit $9b profit mark, gets approval to increase capital

JMMB Group CEO Keith Duncan speaking at the company's AGM on Wednesday. (Photo: Collin Reid)

JMMB Group CEO Keith Duncan speaking at the company's AGM on Wednesday. (Photo: Collin Reid)

Shareholders in the JMMB Group on Wednesday gave their approval for the company to go ahead with a plan to increase its capital by 20 per cent via an offer of shares to the public.

Ahead of the vote on the resolution to facilitate the share offer, JMMB Group CEO Keith Duncan told the company’s annual general meeting that the additional capital would help fuel growth for the company, which is projected to hit the $9 billion mark by 2022.

Shareholders voted onapproval of the issuance of up to 325 million additional ordinary shares.

This growth target will be achieved through growth in JMMB’s existing business lines as well as acquisitions, including the pending Sagicor Financial Corporation transaction, according to Duncan.

Shareholder, Everard Williams casts his vote, with the assistance of Lezley White, associate at KPMG, during the recent JMMB Group's annual general meeting held at the Jamaica Pegasus.

JMMB is buying a 20 per cent stake in Sagicor Financial through a US$200-million investment in Alignvest Acquisition ll Corporation of Canada

The transaction is pending Alignvest’s closing of the takeover offer for Sagicor Financial. It is expected to close by the end of this calendar year.

“What this gives us is an opportunity for an integrated business that includes insurance,” Duncan said, adding, “There will be no operating cost but a straight flow into our income statement.”

Sagicor’s net income increased by nearly 60 per cent between 2013 and 2017, up from US$39 million to US$62 million. It is projected to grow to US$77 million in 2019 and US$85 million in 2020.

“This really adds to our bottom line, so it’s accretive to earnings and it increases our return on equity,” Duncan added.

JMMB shareholder Orette Staple (right) shares a word with JMMB Group CEO Keith Duncan at the company's AGM on Wednesday.

Additionally, JMMB’s earnings per share will be increased by 20 per cent; return on equity will increase by 14 basis points and book value per share will increase by 14 per cent in 2021 with the Sagicor acquisition, Duncan outlined.

For the financial year ending March 2019, JMMB Group posted a net profit of $3.87 billion and operating revenue of $18.04 billion, an increase of 14 per cent over the prior year. Earnings per share for the group stood at $2.34 as at the financial year-end.

Speaking at the company’s annual general meeting at the Jamaica Pegasus in Kingston, Duncan outlined JMMB’s strategic direction to pursue growth, maximise efficiency, build-out and deepen its regional integrated financial services model and continue a financial partnership with its clients.

Among the initiatives to be undertaken is an entry into the Central American market with a microfinance product in Costa Rica; introduction of three funds with increased international exposure; roll out of integrated banking experience, the introduction of new payment options including debit and credit cards and an improved mobile banking platform.

 

 

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