Maurice Facey, chairman of Pan Jamaican Investment, says strong earnings in 2005 and 2006 were being shared with stockholders via special dividends to be paid in June. - File Keith Collister, Business Writer
AT THEIR annual general meetings held back to back Tuesday, both Pan Jamaican Investment Trust Limited and First Jamaica Investments Limited announced a special dividend that will give substantial returns to shareholders.
Pan Jam has declared a second interim dividend of $0.25 together with a special dividend of $3.75 per stock unit for a total of $4.00 per unit, to be paid on June 29 to stockholders on record as at June 8. The ex-dividend date is June 6.
First Jamaica also declared a second interim dividend of $0.20 plus a special dividend of $2.90 per stock unit for a total of $3.10 per stock unit, to be paid on June 22.
While the latter is to be paid a week ahead of Pan Jam's, both have the same ex-dividend and record date.
First Jamaica's net profit to shareholders was $1.1 billion, up almost 10 per cent on a continuing basis, driven by property income from First Jamaica's Jamaica subsidiary, which grew by 17 per cent from $684 million in 2005 to $801 million in 2006.
The continuing basis calculation excludes from 2005's overall profit of $2.7 billion, the $1.6 billion one time gain from the sale of then First Life's banking and insurance businesses during that year.
Chairman Maurice Facey said the justification for the special dividend was the group's extraordinary profit of 2005 and the exceptionally strong, almost 'debt free' balance sheet of both Pan Jam and First Jamaica.
First Jamaica's Chief Executive Officer Stephen Facey advised that stockholders equity of $8.8 billion financed 93.6 per cent of First Jamaica's assets, with only $600 million of debt financing the rest.
Assets were split between shares in Life of Jamaica, constituting 47.4 per cent or $4.5 billion of total assets, property of $2.6 billion or 27.4 per cent, and investment assets, mainly fixed income, of $2.4 billion.
Promising start
Pan Jam's financial position was similar, with $7 billion in stockholders equity financing 92.1 per cent of its assets. The remainder is financed by $600 million of debt.
Pan Jam's largest asset was its 73 per cent stake in First Jamaica, with its other main holding being a more than 20 per cent stake in Hardware and Lumber (H&L).
Referring to the latter investment, Facey advised that after a promising start after the merger in 2004, H&L's profits had not been sustained due to inventory problems and the cement crisis the initial results for this year so far were encouraging.
Pan Jam, said Facey, remains "open to any investment", but is seeking a target rate of return of a minimum of 15-20 per cent.
keithcollister@gleanerjm.com
Source: Financial Gleaner, Friday, June 1, 2007
