Ashford W. Meikle, Business Reporter

Mayberry Investments Limited has seen a 15 per cent drop in net interest income for the nine months ended September 30, 2006 but its chief executive officer, Gary Peart, says that the company's diversified revenue streams should cushion the investment and brokerage firm from volatility as it aims for a turnaround in 2007.

"Everybody keeps talking about declining interest rates and a lot of the [companies] you are comparing us with are worried about their net interest income," said Peart, "but for a company like Mayberry whose main source of income is not necessarily dependent on net interest income I am not as worried because in a low interest rate environment our other assets classes are going to do well."

The company posted a 26 per cent increase in interest income, which climbed to $1.8 billion compared to the previous year's $1.4 billion. However, a 37 per cent increase in interest expenses resulted in a 15 per cent decline in year- over-year net interest income, which fell to $264 million compared to the previous $311 million.

But, Peart says Mayberry is in a much better position compared to its peers, especially those in the non-banking finance sector, to weather the volatility in the economy.

"Some analysts keep using the other financial sector companies as a benchmark for Mayberry - we are not like them," he insisted.

"Fifty per cent of our capital is invested in equities whether public or private. If you look at the people we are being compared with more than likely 90 per cent of their capital is invested in GoJ instruments or loans."

He pointed to the $3.3 million profit share from an associated company, Access Financial Services, in which Mayberry has a 49 per cent stake acquired for $38 million in September.

"We are comfortable with that investment - because if you annualise the 3.3 per cent (quarterly return) it is close to the 20 per cent bench mark we were looking at in terms of a return. During the last quarter Access opened two additional branches and they had some expenses associated with that which might have pulled down the profits a little bit [but] we expect the contribution from that to grow over time," said the Mayberry manager.

Mayberry posted net profit of $107 million, nine per cent down from the $117 million earned in the comparative period last year. Peart argues that with the credible performance of the last quarter, Mayberry was on track for a turn-around in the first quarter of next year.

"I had indicated a couple quarters ago that I expect the full turn-around by the first quarter of '07 and, based on the performance of the last quarter, we are well on our way to achieving that," said Peart.

"Based on what we plan and how well we execute it, we believe we will have the turn-around and move from that platform to a profit level that our investors would be a little bit more comfortable with." he said.

ashford.meikle@gleanerjm.com

Taken from the Financial Gleaner, November 3, 2006