Mon | May 27, 2019

Jamaica Broilers stock hatches ‘gold’ for investors

Published:Friday | October 26, 2018 | 12:57 PMSteven Jackson

 

The more than $3 billion worth of shares acquired from undisclosed founding members of the Jamaica Broilers Group by a trust, earlier this year, are already up more than 50 per cent in value.

They are now worth $4.6 billion, which is vindication that the Jamaica Broilers directors did the right thing in acquiring the shares in trust rather than surrender them or allow them to enter the market, according to Chairman Robert Levy.

The price rise reflects improved earnings and growth prospects of the group with its expansion outside its main market Jamaica into the United States and Haiti. But it also reflects the overall increase in value on the Jamaica Stock Exchange on which JBG is listed.

“Your stock in JBG would be placed in the top five. It is almost like having pure gold in your hand,” said Levy to shareholders at the company’s annual general meeting at its McCooks Pen, St Catherine complex on Wednesday.

“If five years ago someone purchased $45,000 worth of shares in JBG today that amount is worth $300,000.”  

On February 2018, the board approved the formation of JBGL Stockholders Nominees Limited as a trust to purchase JBG shares from major shareholders, which it would hold for the benefit of all shareholders in proportion to their shareholding. Then between March 30 and April 26, the trust signed agreements with two sets of shareholders to purchase 165.4 million shares at an average cost of $18.19, according to the annual report.  

The share acquisition by the trust was brokered by Mayberry Investments.

“Because of that purchase the market has valued our company by some 15 times earnings and our share price has grown from $18 to $30,” he told shareholders. Had the transaction not occurred, he said, the stock would be trading in the region of “$18 to $20” today.

On Friday, the stock closed at $29.71, valuing the company at $35.63 billion.

steven.jackson@gleanerjm.com