ItsMoneyMark Newsletter #103

Sagicor Group Jamaica Limited: Keeps on Winning!!! 

Sagicor Group Jamaica (JSE: SJ) shook the financial markets last week with the announcement, “Further Strengthens their Leadership Team.” The presser, and corporate action to the JSE by SJ was dominated by, leadership, strengthening leadership, strategic leadership, and reorganization. The bottom line, SJ appoints two (2) EVPs, with EVPs standing for, Executive Vice President. SJ gets two (2) highly respected, talented, proven individuals for these respective roles, in (i) Joanna Banks as EVP: Strategy & Business Development and (ii) Tracy-Ann Spence as EVP and Chief Investment Officer, with effect July 17, 2023. 

On the EVP Strategy & Business Development announcement, this is not a surprise, as the roles did seem duplicated at Pan Jamaica Group, once they announced the new roles and titles, of Jeffrey Hall and Joanna Banks. So, to see this not so soon after, it adds up and makes sense for investors all around. 

On the EVP and Chief Investment Officer announcement, this is what shook markets. Tracy-Ann Spence, a stalwart of NCB Financial Group (JSE: NCB FG) and what many would view as a potential lifer of NCB Capital Markets/ NCB Financial Group, making the move. Tracy-Ann Spence is viewed by many, analysts, investors, the Market, as the backbone of NCB Capital Markets, a potent profit centre and contributor of NCB Financial Group over the years. The takeaway, a huge loss here for NCB FG, and a major win for SJ

Winner, Winner chicken dinner for SJ as surely this will only increase the already formidable competition moving forward between NCB Financial Group and Sagicor Group Jamaica. 

Market Moves:

  • Carreras Limited (JSE: CAR) has reported another resignation. In this occurrence, this is at their Board of Directors level. Carreras reported to the market that Director Mrs. Nirala Singh, a member of the audit and nomination and compensation committees resigned with effect from April 15, 2023. 

Carreras is currently trading around J$ 8 to J$ 9 per share, with its market cap just below J$ 40 billion. Its earnings have not propelled it back to its 52-week high, or for the share price to be maintained consistently above J$ 10 per share. Additionally, higher yields on corporate bonds, and GOJ instruments in 2022 and this year 2023, are competing against that CAR dividend yield play. 

Overall, and from our perspective at ItsMoneyMark, CAR needs to settle down a bit with the turnover it has been giving the market at its Director and Executive-Management level. The Caribbean, unlike the U.S. markets or more developed markets, is less investor tolerable of continued changes, corporate actions regarding a publicly listed entity. 

  • Portland JSX Limited (JSE: PJX) reported a net loss for its audited year end February 28, 2023. By the numbers, Portland JSX posted a loss for the year, YE 2023 of US$ 812k versus a profit in its previous year of US$ 4.27 million. A negative P&L swing of approximately US$ 5 million, year over year. 

Main factor in the material P&L change at PJX was, the line item, “net fair value (losses)/ gains on financial investments at FVTPL.” For 2023, this was negative US$ 496k in Portland PJX’s income statement. As a result of the 2023 numbers, PJX’s total equity declined to US$ 31.4 million to end the year. 

We say this over and over at ItsMoneyMark, when companies on the JSE report such a dramatic change in their financial results, whether it is a material +/- variance, a net loss, impacted by one line item, or several other potential items, it is so important that they include the MD&A for readers. Not all readers, will be able to itemize, or necessarily understand JSX’s financial footnotes to their audited statements. 

  • Coca-Cola Co, (US: KO), reported stronger than expected earnings and revenues to beat the street. Earnings per share for the quarter was US$ 72 cents versus US$ 64 cents expected and revenue was US$ 10.96 billion (adjusted) versus US$ 10.8 billion expected. Leading the growth was price hikes, KO took a number off price hikes in 2022 to fend off inflation, and demand for its drinks contributed. 

KO’s net income for the quarter was US$ 3.11 billion versus US$ 2.78 billion, year over year. KO’s market cap after the quarterly numbers, around US$ 277 billion. 

Interesting takeaways from the KO quarter: Coke Zero Sugar’s volume grew by 8% in the period, and Coke’s coffee business saw volume increase by 9%. 

  • LVMH, the parent company of, Louis Vuitton, Moet & Chandon and Hennessy has become the 1st European company to exceed US$ 500 billion in market cap. 

The Paris-based company that includes, Sephora stores, and other brands & stores, had a stellar 1st quarter, with earnings + 17%. LVMH’s share price year to date for 2023, is + 32%. LVMH’s operating revenue for 2022 was a whopping US$ 87.1 billion. 

As a reminder in 2021, LVMH completed the acquisition of luxury jewellery maker in the U.S., Tiffany & Co. 

  • While earnings have been great in the 1st quarter especially by several U.S. banks and investment banks, some blue-chip U.S. companies have been continuing the unfortunate announcements of layoffs, as they execute restructuring plans to achieve lower costs in their fiscal year and quarters moving forward. 

Besides a few announcements, which have dominated recent headlines around this by, Meta Platforms (Facebook), Walt Disney Co (US: DIS) has announced another round of layoffs, bringing the total to 4,000 jobs. After this, Disney is expected to do another round, a 3rd round in 2023. Disney’s objective as previously announced, is a total of 7,000 job cuts, for the reorganization to slash costs by approximately US$ 5.5 billion. 

The 7,000 jobs calculate to approximately 3% of Disney’s global workforce of 220,000 employees. Walt Disney Co has been trading just below US$ 100 per share this week, with its 52-week range of US$ 84.07 to US$ 126.48. 

With the co-chairs of DIS taking a more active role, with Bob Iger back as CEO focus on re-organizing DIS, re-defining the company, and the ongoing transformation, DIS is clearly a company with potential value in it. 

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