SRF 2023 exits to deliver dividends
Published:Sunday | April 23, 2023 | 12:40 AMNeville Graham - Business Writer
SYGNUS REAL Estate Finance (SRF) is again committing to delivering a return to investors in financial year ending August 2023. Chief Investment Officer at Sygnus Group, Jason Morris, is promising dividends during the year once the harvesting of returns from certain projects starts to happen.
Morris says some of the capital being reaped will be redeployed into other assets. Deployments moved up from $1.05 billion to $2.03 billion in 2023. He noted that over the last two and a half years the company deployed over $8 billion.
The company, he says, has $345.7 million in dry powder, up from the $66.7 million in the similar period in 2022. This excludes undrawn construction loans, especially for its One Belmont project in New Kingston.
David Cummings, SRF’s CEO, says the company is looking to close on three projects for financial year 2023. The Spanish/Penwood IMCA country headquarters project was in the handover phase of development, according to Cummings, having achieved practical completion and is due to be fully handed over by June 2023, he says.
One Belmont is on track for completion during the summer of 2023, according to Cummings, with the building being 82 per cent complete. He says four of the five office-space floors have been leased, with strong demand for the fifth floor.
The Norbrook Wasser development is also slated for completion in 2023, Cummings says, and SRF will be moving to exit the project with the sale of the units.
Noting the stated lumpiness of flows to a company such as SRF, Morris says “the interim negative financial statements from the company should not be a surprise, given what has happened over the past six quarters of earnings releases versus what obtained at the end of the year.”
Since its 2021 listing on the Main Market of the Jamaica Stock Exchange, SRF has only managed to show an overall profit and the end of its two reported financial years. The company booked a profit of $693 million at the end of financial year August 2022. This after racking up three negative quarters.
So far in the present financial year, the first two quarters are showing losses, for a six-month loss of nearly $302 million.
Morris says as the closeout of the three projects draws near, and realised earnings are posted, SRF should be in a position to pay dividends.
“As we enter the first harvesting stage of SRF, once we’ve completed that, a dividend will more than likely be considered at some point during the calendar year 2023,” Morris said.
While not being definitive, Morris says he expects to have between one billion and two billion dollars in flows from project closeouts. SRF has a number of significant holdings on its books that are set to boost its balance sheet, including a 14-acre property at Mammee Bay, St Ann.
The company recently secured the environmental permits that will allow for a planned luxury hotel development. Morris says the company wants to be deliberate in its approach to the development so that it can extract the best value for shareholders.