Thursday 26 November, 2020

Sygnus Credit Investments has US$5.5 million in dry powder

Sygnus listed on the Jamaica Stock Exchange in 2018.

Sygnus listed on the Jamaica Stock Exchange in 2018.

Sygnus Credit Investments (SCI) Ltd for the year ended June 30, grew revenue and managed to deliver results, which were almost the same as fiscal 2019, despite the impact of the COVID-19 pandemic.

Total investment income grew by 39.8 per cent or US$1.28 million to US$4.50 million, for the financial year ended June 30, 2020, up from US$3.22 million for the financial year ending (FYE) June 30, 2019.

Net profit attributable to shareholders was US$1.97 million for FYE Jun 2020, marginally below US$2.05 million for FYE Jun 2019 by 3.8 per cent or US$77.8 thousand.

Earnings per share (EPS) was 0.56 US cents for FYE Jun 2020 compared to 0.59 US cents for FYE June 2019.

Management is looking forward to a better year. In analysis published, they said the company has US$5.51 million in dry powder on its balance sheet.

In addition, SCI had US$10.7 million in undrawn credit facilities, and thus had adequate available capital to finance new private credit investment opportunities.

Management said the company has developed “a number of sustainable competitive advantages and is thus well positioned to navigate the COVID-19 environment.”

In addition, they said, SCI’s portfolio across the Caribbean is primarily concentrated in industry leading middle-market firms and projects with excellent management teams, which are necessary pre-requisites for navigating through the COVID-19 pandemic.

June 2020 results were driven by a record origination of private credit investments across the Caribbean region.

However, results were partially adversely impacted by the one-off conversion of J$1.2 billion to USD,  being part proceeds of new JMD debt that was raised and part proceeds of JMD investments that were exited during the third quarter.

The results were also impacted by the one-off unscheduled investment exit of US$10.30 million during the third quarter, due to the onset of COVID-19.

The impact of the global COVID-19 pandemic on SCI’s business is an ongoing evaluation process as the crisis unfolds, management said.

However, they said the company remains “well positioned from a liquidity, funding profile and capital standpoint to play a major role in financing the recovery and growth of Caribbean middle-market firms, while proactively managing the risks of its diversified portfolio of investments.”

Ninety-nine point eight percent of core revenues were comprised of net interest income.

SCI’s core earnings, or net investment income, grew by 37.1 per cent or US$820.2 thousand to US$3.03 million for FYE Jun 2020, versus US$2.21 million for FYE Jun 2019.

SCI’s investment in portfolio companies grew by 57.8 per cent to a record US$53.60 million versus US$34.00 million in FYE Jun 2019.

The number of portfolio company investments increased to a 25 from 19 in the previous year.

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