Mayberry Investments profit spikes on gains from stock portfolio
Brokerage firm Mayberry Investments Limited reported quarterly profit after tax for June that was 63 times better than the comparative results for the prior year, due in part to restructuring of the company to book unrealised gains on the stocks it owns.
Mayberry made "strong" profit after tax of $233.6 million on revenues of $623.4 million for the second quarter ending June 2018, compared to $3.7 million on revenues of $241.6 million in June 2017.
At the end of last year, Mayberry reduced its holdings in five key stocks that were previously classified as associated companies to below 20 per cent, allowing for a change in the method of accounting.
"Unrealised gains on investment revaluation of $177.6 million stemmed from the revaluation of all equities classified as fair value through profit or loss, namely Lasco Financial Services Limited, Blue Power Group Limited, Caribbean Producers (Jamaica) Limited, Wisynco Group Limited and IronRock Insurance Limited," said Mayberry in the preface to its earnings report.
Other contributions to revenue included dividend income from gaming and lottery company Supreme Ventures Limited and Caribbean Producers.
For the second quarter, Mayberry's total comprehensive income amounted to $1.8 billion, compared to $49 million for the corresponding quarter of 2017. The increase was due to an increase in the movement of the financial reserves resulting from the gains booked for stocks held in the current equity portfolio, the report indicated.
The performance of Mayberry in turn reflects trends on the stock market. Year to date, the JSE Main Market is up six per cent, while the JSE Junior Market is up 11 per cent.
On Tuesday, the company's subsidiary company, Mayberry Jamaica Equities Limited, became the latest to list on the main market. The stock traded 20 per cent higher to close at $9.07, pushing its market value on day one to $10.89 billion.
Mayberry Investments itself traded more than seven per cent higher to close at $6.98 per share, valuing the company at $8.38 billion on the stock market.
That's still below its book value as depicted by shareholder equity, which was estimated at $11.9 billion in June, up from $7.5 billion a year earlier. The company attributed the 58 per cent growth in net value over the past year to higher cumulative earnings and gains on the revaluation of equity securities.