Two-day suspension for Sweet River
The Jamaica Stock Exchange (JSE) has suspended trading in the Sweet River stock but the loss-making meat company’s management said they expected to get it reinstated right away.
The JSE suspended trading of SRA shares on March 4, because the company failed to satisfy JSE Junior Market Rule 505 which speaks to timely disclosure of information and also posting of financial information, amid other secondary concerns.
Managing director of Sweet River Abbattoir & Supplies Company Limited, Valdence Gifford, said Tuesday that, “as we speak”, the company was addressing two separate concerns to the JSE.
“We are issuing the JSE with a response and we expect the stock to be reinstated later today [Tuesday]. All financial documents are in but other requirements need to be done,” he said.
The volumes of the stock are so small that only 100 units have traded since December 2018. There are periods where no trades occur over an entire quarter. The largest day’s trading was 803,000 units in April 2017 followed by 60,000 units in August 2017.
“We are one of few agricultural entities on the market,” said Gifford. “For some reason, people choose to trade other stocks in banking, services and insurance, but not agriculture. People are hesitant to trade and invest in agricultural commodities,” he said.
Sweet River’s market capitalisation stands at $285 million, with 81.5 million shares in circulation. The stock closed at $3.50 on Monday, the same price at which SRA was listed on the junior back in March 2017. It hit an all-time high of $3.80 and a low of $3.48.
Sweet River’s December 2018 quarterly results were posted in mid-February, its audited accounts are up to date, but the company’s annual report for year ending March 2018 is outstanding. JSE’s chief regulatory officer, Andrae Tulloch, also noted that the company has not held its annual general meeting within the due date, a breach he described as “conduct that can cause reputational damage to the market”.
Sweet River made a loss of $12.4 million in the December third quarter, which was nearly triple the losses of $4.5 million made in the prior-year quarter. Revenue also fell 13 per cent to $64 million.
As the losses mount, Sweet River’s net worth has shrunk to $40 million, or one quarter of its capital base of $158 million reported a year earlier.
“Regarding the rescue plan, at a later date more information will be provided,” said Gifford. “It is premature to say more at this time,” he said.
Suspension of the SRA stock was lifted after the trading day on Tuesday.