Ashford W. Meikle, Staff Reporter
Hayden Singh Courts (Jamaica) Limited managing
director, at the company's 2004 annual general meeting.- Winston Sill / Freelance Photographer
Pointing to a strong balance sheet depicting healthy asset growth, managing director of Courts Jamaica Limited, Hayden Singh, says the furniture retailer is a solid company in spite of lengthy negotiations for its sale by creditors of its parent company, the United Kingdom-based Courts Plc.
"We have a very strong balance sheet, little long-term liabilities and therefore a very strong company, " Singh told Sunday Business on Friday in an attempt to downplay concerns about the health of the company.
The numbers appear to support Singh's assertions.
For its six months to July 2, 2006, Courts' total assets increased by 17 per cent, to $8.1 billion, compared to $6.9 billion in the comparative period in 2005.
In fact, the furniture retailer experienced a 13 per cent climb in its current assets, which now stand at $3.8 billion. Of significance is the fact that the company has almost $310 million in cash, a stark contrast to last year when cash balances were practically nil.
Courts, which has a market capitalisation of $7.9 billion, has also seen a 20 per cent increase in total shareholder's equity, which now amount to $6.7 billion, compared to $5.5 billion.
As far, as it's current liabilities are concerned, the company does not have any outstanding balances with any financial institutions.
process taking some time
Still, Singh admitted that negotiations for Courts' sale are taking some time, a factor, which he attributed to the complex nature of the transaction.
"This process is a very long and complicated process É and it takes time because you are dealing with various jurisdictions of the Caribbean," he said, adding "... from my understanding they have certain milestones to meet within the period and that is what they are trying to do."
Struggling with a 280 million pound debt and a pension deficit of 17 billion pounds, Courts Plc was placed in receivership in November 2004. Since then the receivers have been in negotiations with a number of interested parties.
Singh was anxious to point out that Courts Plc's creditors were not in any haste to offload the company's highly profitable Caribbean operations, saying they "have made it very clear from the outset that this is not a fire sale or a distress sale. This is a merging acquisition transaction and we are not in a fire sale to get rid of it cheap."
Still, he shied away from comment on how long the negotiations could take, citing the confidential nature of the ongoing transaction.
"I don't know because I am not party to it, but you have to understand we have about 3,000 shareholders in Jamaica and the administrator is just one of those 3,000 and I tend not to get involved in it because of our corporate governance and our responsibility to minority shareholders."
Speaking to the performance of Courts, Singh said profits were "slightly down" over last year, "bearing in mind that we had the cement crisis which has affected lots of job in the period April to June and also the high cost of oil and also the fact that the World Cup took a lot of people out of our stores," he said. "We did not see much foot traffic."
For its six months, the company's gross revenue declined by about one per cent, or $1.5 million less than the six months ending July 3, 2005. However, its net profit fell by about 7 per cent, to $203 million.
Singh, however, was upbeat.
"I am optimistic for the rest of the year. We should see trading to meet our expectations. I think we'll have a reasonably good year," he predicted.
