Gleaner performance ahead of 2014; company preparing for shareholder vote
The Gleaner Company Limited posted a consolidated nine-month profit from operations of $123 million, up 36 per cent when compared with the same period last year.
After finance costs and taxes, the group posted a net profit of $130 million, more than double the prior-year nine-month results, on $2.4 billion in revenue.
The group posted a six per cent reduction in cost of sales and achieved a reduction of $82 million, or seven per cent, in other company expenses, driven mainly by lower administrative costs.
Managing Director Christopher Barnes, commenting on the company's performance, attributed a five per cent dip in top-line performance to softer group media sales and lower investment income from weak global markets.
"Radio revenue remains depressed as we try to recover from a market lull which started in the second quarter. We also saw reduced investment income due to a temporarily softening of global markets during the quarter, coupled with a drawdown on portfolio funds in the first quarter to increase the company's stake in associated company JJVI."
He pointed out that "local news-paper and online operations saw a three per cent revenue decline year on year for the nine-month period, but we are optimistic going into what is usually local media's best sales period of the year."
At the end of September, shareholders' equity was approximately $2.8 billion, or $2.30 per share. The company has negligible debt and considerable liquid assets.
Radio Jamaica merger
The company, in August, announced a proposed merger of its media operations with those of Radio Jamaica Limited by way of a court-approved Scheme of Arrangement for Amalgamation. In providing an update, Barnes said that both companies have been granted leave by the Supreme Court to hold the required extraordinary general meetings (EGMs) on Tuesday, December 8, 2015. Notices of meetings and explanatory statements were mailed out last week Friday and have also been posted on the company's website at http://jamaica-gleaner.com/ rjrgleanermerger.
"We are pleased to finally be able to provide our shareholders with the information pertinent to the transaction. Since the announcement, we have spent much time engaging all regulatory agencies with interest in the transaction and are satisfied that we can now proceed to the shareholder vote," said Barnes.
"What remains is the positive vote of shareholders on both sides
which will facilitate closing the deal hopefully by year end, and see the companies successfully completing a bold initiative with the aim of shoring up the future of independent media in Jamaica."
There will be two back-to-back EGMs for each company, run concurrently, first to approve the scheme and, second, to approve necessary changes to each company's articles in support of the scheme. Approval of the scheme will require the majority in number and three-fourths in value of the members present, in person or by proxy, voting in favour of the scheme. If successfully approved, both companies will return to court and request that the scheme be sanctioned.
Barnes reported that the necessary reorganisation of the company's media operations into the newly created subsidiary company, The Gleaner Company (Media) Limited (GCML), is well advanced.
Upon the scheme becoming effective, shareholders of The Gleaner Company Limited will receive one Radio Jamaica Limited share for each Gleaner share owned.
The publicly traded Gleaner Company Limited, which retains its non-media operations, will undergo a name change to avoid future confusion with the media brand GCML.
The company has established a dedicated email address (email@example.com) for persons seeking additional information on the transaction.
Shares in the company closed at $1.91 per share at close of trading Friday, November 13.