Mayberry subsidiary to list on JSE by April
Brokerage house Mayberry Investments Limited is expected to list its subsidiary on the Jamaica Stock Exchange (JSE) by April, pushing back the listing by about a month.
In preparation for the listing, wholly owned subsidiary Mayberry West Indies Limited (MWIL) was renamed Mayberry Jamaican Equities Limited, or MJEL, in January.
"We have yet to submit the documentation to the regulators. We expect to submit them in a week or two," said Gary Peart, chief executive officer of Mayberry Investments, in an interview following a press conference on Wednesday at the Knutsford Court Hotel, New Kingston.
2017 among most profitable years
It comes as the group posted one of its most profitable years with net profit expected to hit $425 million for its December year end 2017, up 147 per cent year on year from $172 million, according to data revealed at the press conference.
"We benefited from increased trading and deals such as the Zodiac transaction," said Peart in an interview.
In that transaction, Mayberry Investments structured a US$40-million bond that aided the Trinidad-based Zodiac to double its stake in gaming outfit Supreme Ventures Limited to just under 49 per cent. During the year, the company also acted as lead broker for Express Catering Limited in its initial public offering.
Peart hopes that listing its subsidiary will allow the market to 'better value' the fluctuations in its stock portfolio.
A release issued on behalf of Mayberry said the company has retained its place as one of the top equity brokers in Jamaica, responsible for approximately 61 per cent and 30 per cent of the traded volumes that crossed the JSE's trading floor in the junior and main markets, respectively, during 2017.
For the financial year 2017, Mayberry Investments recorded revenues of $2.2 billion, a year-over-year increase of $993 million when compared to 2016, or an increase of 82 per cent. That increase resulted from increases in corporate financial advisory fees and commissions, as well as unrealised gains on investment revaluation of $1.1 billion. Those were offset by lower net trading and foreign exchange gains. The operating expenses for the year 2017 were $1.926 billion, which was 78 per cent higher than the year ended December 2016. The $847 million increase was driven by an increase in impairment of investments of $677 million.
For the third consecutive year, Mayberry recorded in excess of a billion dollar of income. The year's results reflect a comprehensive income for the year of J$2.389
billion, an increase of 89 per cent when compared to 2016. Stockholders' equity increased by $2.1 billion or 29 per cent, to close the year at $9.36 billion or J$7.79 per share.
The only activity of the subsidiary will be the buying and selling of shares in the portfolio.
It is Peart's hope that the group will be valued using price to earning ratios while the subsidiary will be valued at net book value.
Based on MJEL's book value at some $7 billion, and stock market requirement that at least 20 per cent of a company must be offered to investors in an initial public offering, the share float is likely to be valued at $1.4 billion. Peart did not give specifics on financials of the IPO due to regulatory constraints.
Trades below net book value
Mayberry is the only financial entity which trades below its net book value, indicated Peart about the stock which traded at $6.50 midday Friday but has a book value of roughly $7.80 as at December 2017.
"We have suffered in terms of price on the market," he said. "The value of our equity portfolio was never taken into account, which is why the market trades below net book value," he said.
Mayberry Investments is a financial advisory firm, licensed securities dealer, and a member of the JSE. The company was established in July 1985 by the late Maurice Berry, a former deputy governor of the Bank of Jamaica. Mayberry has over $18 billion in funds under management on behalf of 20,000 clients.