Confident JMMB to resume dividend payments
In a show of confidence, financial conglomerate JMMB Group said it intends to grow through acquisitions and would resume paying dividends to shareholders.
The M&A targets were not disclosed, neither by name, geography or industry.
“We have to scale and build efficiencies so we can add new entities through acquisition,” said JMMB Group CEO Keith Duncan at the company’s annual general meeting, which was streamed online on Thursday. “We do have our pipeline and you will hear about it in the future,” he said.
JMMB Group is standardising its online platforms across the regional markets in which the group operates. Recently, the banking operation experienced a collapse in its Moneyline platform, but while this occurred as JMMB was taking steps for the upgrades, the bank subsequently said the two events were determined to be unconnected. The outage did not affect investment clients on the platform.
JMMB Group normally makes two dividend payments during its financial year, but put distributions on hold after the outbreak of the coronavirus.
“We took the decision during the midst of the pandemic not to pay the usual first dividend at that time. However, we are committed to the payment of dividends in our usual manner. And we will advise the Jamaica Stock Exchange and the Trinidad & Tobago Stock Exchange in the near future when the board will be considering a dividend payment,” said Chairman Dr Archibald Campbell at the annual general meeting.
The group paid a single dividend of $410 million in the financial year, which was less than the $867 million it ‘planned or proposed to pay’, according to tables in the 2020 annual report. The single payment for the year comprised was 21 cent distribution, rather than the 44 cents proposed. Dividends paid in 2019 totalled 49 cents per share.
“We think it is very important that we reward our shareholders, because they invested their confidence in us,” said Duncan, citing participation in the company’s issue of new shares through an additional public offering last year, the proceeds from which were used to finance leading stake in Sagicor Financial Company.
“We got tremendous support. So we are committed to paying these dividends, to show that you deliberately participated in the positive results of JMMB, in a meaningful way,” he said.
The resumption of dividends will benefit small shareholders. That’s because the Bank of Jamaica got large financial companies to agree to hold-off on distributions in order to safeguard cash, at least for one year, while Jamaica struggled with the fall-out from the virus. It was later agreed that the fincos could pay dividends to persons whose holdings are less than one per cent.
During the June quarter, when the lockdowns against the coronavirus were their most severe, and markets had weakened, JMMB group earned $5 billion in revenue for the period, down from $5.8 billion a year earlier.
Its first quarter profit totalled $780 million, compared to $1.1 billion a year earlier due to the economic fallout and tighter trading environment.
The group received over $230 million in dividends from Sagicor Financial in the period, according to its cash flow statement. JMMB owns 22.5 per cent of Sagicor Financial.