January 30, 2018
The Annual General Meeting for 138 Student Living Jamaica Ltd was held today, 30 January 2018. The meeting started with the Chairman, John W. Lee, giving a brief review of the company’s performance for the year ended 30 September 2017. Some of the points reiterated from the end of year financial statement are as follows:
- Revenue increased year over year in 2017 to $573.54 million from $255.09 million in 2016
- Operating profit rose 128% year over year to $329.66 million from $128.39 million
- Net profit climbed to $70.07 in year end 2017, compared to $26.04 in 2016
Mr. Lee admitted that the company had not performed as projected when the company was first conceptualized, due to unforeseen obstacles; however, he remains optimistic about the business model and the sector within which the company operates. The Chairman pointed out the strength of the firm and its “world class” accommodations offered to occupants.
138SL underperformed relative to its projections due to the inability to pull occupants well beyond the 90% occupancy rate guaranteed by the University of the West Indies as indicated by the Chairman. In an effort to “plug this gap” the firm embarked on a number of initiatives. One being a high profile marketing campaign targeted at sports and religious groups. Last year, the company hosted Rosea’s High, St Jago and others high schools for Boys and Girls champs. And already, these schools have scheduled to stay at the dormitory facility for this year’s Boy’s and Girl’s Champs. One drawback to this increased demand from schools (such as St. Elizabeth High) seeking accommodation to participate in this annual event is limited accommodation. This is so because the event takes place when school is in full swing; at which the time occupancy rate is at its maximum. As proof the new initiative is bearing fruits, revenue from short term rent has increased, and is expected to continue to do so over the long term as the accommodation offered by the 138SL becomes a viable alternative to spending time at other hotels, the chairman believes.
One strategy currently being discussed with Sagicor, is to allow entities to use the company’s facility to offer services. The selling point of this strategy is to give residence a chance to earn while living at the facility. (Quote him) For example, “ Sagicor could employ residences to carry out their back office function”. The Chairman is very optimistic that these talks will end positively and will enrich the experience at 138SL.
In addition, University of the West Indies recently signed an agreement with the Jamaica Constabulary Force to house two badges of cadets per year. Mr. Lee sees such arrangement marginally affecting revenue; however, a greater benefit is to be derived from such arrangement in the form of reduce security cost. These cadets will assist with the security of the premises.
The Chairman also mentioned that the firm has suggested to the University of the West Indies, the postponement of the remaining 250 rooms at Hirvin Hall, and resume construction after demand exceed available rooms by over 20%. The firm is also seeking to reprice these rooms under the first concession arrangement.
