ItsMoneyMark Newsletter #19

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Earnings numbers are starting to pour into the Jamaica Stock Exchange (“JSE”), earlier than expected… 

Two (2) of the most popular companies on the JSE have reported results in quick order, Supreme Ventures Limited (JSE: SVL) & Barita Investments Limited (JSE: BIL). The similarities between the companies are amazing, although they are in contrasting sectors…

Both companies in recent years have been taken over and quickly revamped. These now “makeovers” are doing very well, and ones to watch, despite the “Pandemic Pinch”. The brands are tweaked, hip, pushing the curve and the earnings are there!

  • BARITA – the financial monster has been quiet of late, over the past few months, but probably well deserved after the non-stop past few years of action… with that said, while Barita has quieted down, Proven Investments (JSE: PIL) and other market players are becoming noisy… Proven announced two (2) deals within the past 30 days, and Sygnus has increased its branding immensely with the deals they closed in 2020 and new developments coming out of their real estate arm… 

Barita’s Annual General Meeting (“AGM”) is today! Its their 43rd AGM. They will not be sleeping, so expect an announcement or maybe more, and if it does not happen today, expect some noise before the end of H1 2021. Either way this should help the stock and, the competitive forces should push Barita even more, if that is possible… 
Numbers soared here, 6 months 2021 net operating revenue, almost doubling to J$ 4.045 Billion v. J$ 2.264 Billion. Earnings per Share (“EPS”) leapfrogs to J$ 1.90/ share (2021) v. J$ 1.24 (2020), + 53%. 

  • SUPREME VENTURES –  the gaming giant – 3 months or Q1 Results – total gaming income hits J$ 10.7 Billion v. J$ 10.1 Billion, + 6%. Earnings per Share (“EPS”) was down, hitting J$ 22.46 cents v. J$ 28 cents. 

Yes, it was down but a lot of lockdowns, semi-lockdowns, and other business interruptions in the Quarter. Look for a rebound here in Q2 onward… In addition, there recent deals should be digested by then and start to yield results for SVL. 

The Return of Guardian 

Guardian Holdings Limited (TTSE: GHL) is back in JAMAICA and on the scene in a BIG WAY! Talk about a company & a stock coming out of the pack from nowhere and just crushing its earnings per share debut back in the minds of many local analysts and rocking the profit figure. The company recently listed GHL instruments on the JSE private market and this move, really brought GHL back to the top of mind, for retail investors and institutional investors. This was the sign and the signal for things to clearly come. Since that point, the announcements and messaging of GHL to re-list on the JSE have been made and are clear – that is GHL comes back to the Jamaica capital markets with new ownership. 

To the numbers, with all the above happening, here comes GHL’s Annual Report and Abridged Financial Statements to the Public via the Jamaica Stock Exchange and they are goodly good: 

  • Many of us will remember that in 2004 – 2007 or so, GHL was the “darling” of the market. Most regulated financial companies and pension funds would not have a portfolio without GHL. GHL was considered as solid, and a continuous BUY as was Scotia Group Jamaica, GraceKennedy, Carreras, and Pan Jam. GHL was in this class. 
  • GHL crashed essentially, it made some sour investments, some other issues, and its global expansion like many other Caribbean counterparts historically and even now, went up in flames. With no “pun” intended, Zenith Insurance UK (we recall that name, that is how much of a legend GHL is), was supposed to be as the name suggested, the PEAK for GHL. Instead, it turned out to be like a fall from Everest, all the way to the bottom of the class. 
  • GHL disappeared from the scene, it was off the buy list in broker/ analysts’ offices for years and de-listed from the JSE. GHL lost its glory and during those years had to sell off assets to re-structure. 
  • The earnings for years were rollercoaster and earnings underperformed for a long time. Wise investors sing a song, that when that amount of damage is done, or hurt at a Company, the rebound can take as long as 10 years…
  • Funny enough, GHL sold Zenith Insurance UK in 2010 and they carried out other transactions. 
  • 10 or so years later, who is back? GHL Baby! Under the ownership and leadership of NCB Financial Group (JSE: NCBFG), the impact is felt already in the 2020 earnings results, layout of the annual report and Chairman’s message.

Total Assets for GHL rose approximately 10% year over year, 2020 v. 2019, hitting TTD$ 33 Billion for 2020 v. TTD$ 30 Billion for 2019.

Profit for GHL, the all-important number, came in with force at approximately TTD$ 778 Million v. TTD$ 703 Million. 

In USD$ terms, GHL made USD$ 115 Million for 2020 in Profit after Taxation.

Are they back? Yes, they are and huge!

With NCB Financial Group (JSE: NCBFG) benefiting even more here via NCB Global, NCB Financial Group now has two (2) powerhouses making each more than US$ 100 Million per year in – Major Subsidiary NCB Jamaica and Guardian Group. 

The former closer to US$ 200 Million.

Market Moves

We spoke about Knutsford Express last week, and how it has reduced its “cash burn” significantly and has pivoted into all popular logistics/ courier space. It is the decade of Courier, and almost everyday or every week now, another new one pops up, opening its doors on social media… 

Instead of the Tech bubble of 2000 in the U.S., it is beginning to feel like the e-commerce and logistics bubble in Jamaica… Everyone is now a courier or sub-courier… On the positive side, the industry seems like it is still early stage and has a lot of legs left… 

  1. The cruise market stocks have rallied, but the cruise market (Carnival, Royal Caribbean, etc.) is not really sending any huge positive signals yet for their markets or the Caribbean – we are still waiting for this and to see a lot more information share and data, from the airline sector
  2. On that Note, all the U.S. airlines have been sharing buzzworthy numbers and data… still many reporting losses for the quarter but the bookings in the U.S. market just seem amazing… Huge boost for confidence. Whether, American Air, Southwest, Delta, etc. all seem to be aligned with their numbers, whether ranging from 15% – 25% less than pre-covid numbers or year over year. Like a few of the vaccine positives, as those announcements had escalated a few months ago, each headline showing U.S. domestic travel not only rallying but surging to these levels is creating confidence & euphoria again. Well received and Well needed for the Caribbean.
  3. Although there is a huge amount of no travel advisories for territories outside the U.S. presently, one wonders if to boost their respective economies, the U.S., Canada, and others simply want to keep their citizen “stimmy” spending and any spending within their borders? In these times, anything is possible and even the G-7 economies need to keep that spend…
  4. Jetcon Corporation disappointed with the full year earnings for 2020. Their “blurb” called it Unprecedented times which is factual, but their profits had a Negative Swing year over year of some J$ 67 Million. Jetcon went from a profit of J$ 60 Million and change in 2019 to a loss in 2020 of J$ 6.7 Million. The balance sheet stood up well, and all ratios look good, it is just when will the business rebound. What is even more interesting about this is that Carib Cement sales boomed and are booming, as they came off a record year, however, the sole public used car biz, has seemingly its worst year. 

Does that mean a car, or a used car takes less priority than a home/ real estate now in Jamaica? 

Why are used cars not booming at Jetcon but construction is booming?

Interesting nuggets for next week…

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Happy investing and Happy markets.

Enjoy the It’s Money Experience until next week!

These opinions and thoughts are solely of ItsMoneyMark and does not constitute investment advice.
Ensure to always speak to a Licensed Financial Advisor.

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