Pulse to fund real estate project from rights issue
Modeling agency and entertainment company Pulse Investments Limited kicked off its latest real estate project with financing from an outfit connected to its founder.
But the company now says it will raise additional funds for the project from its shareholder base via a rights issue in 2017.
Pulse, which is now headed by Safia Cooper, wrapped up its fiscal year with higher profit - $377 million at year end June, compared to $208 million in 2015. However, $138 million of this year's gains was due to tax credits.
The company previously paid no corporate income tax but that changed with the repeal of the Motion Picture Industry (Encouragement) Act in 2014.
But Pulse's 2016 tax bill was offset by credits, which resulted in Pulse reporting a bigger profit than its actual revenue inflows for the year. Revenue at year end June 2016 amounted to $350 million, up from $325 million in fiscal 2015.
Income from the model agency more than doubled from $10.9 million in 2015 to $25.5 million in current year, Pulse said in a statement.
"This increase resulted from the positive performance of major new stars such as Alicia Burke and the continued success of existing stars such as Jeneil Williams," the company said.
Pulse is developing town houses and suites at its Stony Hill and New Kingston properties.
"Funding support for this project will be sought from the capital market in 2017, through a rights issue," it said.
But in the interim, around $40.6 million was sourced from related party Sumarai Investments Limited, which has doubled Pulse's debt to that entity to $90 million, according to disclosures in the financial report. The loans won't become due before the next five years, Pulse said.
Pulse previously received shareholder approval for the rights issue to raise a maximum of $500 million at a special meeting in March.
That meeting also approved an increase in the company's authorised capital from $336.8 million shares to $450 million shares to facilitate the rights offer.
Pulse is developing 48 guest rooms and suites at Stony Hill, which when commissioned are expected to generate an additional $195 million per year in revenue for the company, "assuming a 66 per cent occupancy rate".
The Pulse Centre at Trafalgar Road, New Kingston, now houses the new Peter Tosh Museum, following upgrades to that property.
The projects have helped push the value of Pulse's asset above $2 billion for the first time. Its asset base includes $1.3 billion of investment properties.
Safia Cooper became CEO of Pulse on January 1, succeeding her father Kingsley Cooper, who remains chairman of the company he founded.