Introduction
The meeting commenced with Chairman and Chief Executive Officer (CEO) Mr. Stephen Facey welcoming and thanking shareholders for their attendance at company’s annual general meeting despite the adverse weather conditions across the island. Following the opening remarks, the CEO introduced the company’s Director’s and key management staff present at the meeting. According to the CEO, the Board of PJAM established several Committees during 2016. The Chairman stated, “from a governance perspective, I want to point out that we have established four substantive sub-committees to the board.” Each Committee is chair by a member of the Board possesses clearly defined terms, responsibilities and powers. The Committees established are as followed;
• Audit Committee: Mandated to review the company’s annual and interim financial statement and related polices.
• Investment and Risk Committee: Authorized to review the investments, acquisitions and disposals done by the company.
• Human Resource and Compensation: Delegated to review the performance of the Executive Directors and senior executives of the Company.
• Corporate Governance Committee: Responsible for keeping under review the composition of the Board and succession to it.
Audited Financials Review for yearend December 2016.
Mr. Stephen Pillibert, Chief Financial Officer (CFO) was then introduced to make his presentation on the company’s performance in 2016. This section of the meeting much like previous meetings was shared between the CFO and Mr. Paul Hanworth, Chief Operating Offier at PJAM. The CFO proceeded to dissever PJAM’s performance highlighting that:
• Net profit attributable to shareholders improved 27% to $4.05 billion compared to last year’s $3.19 billion. This translates into earnings per share of $3.80 (2015: $2.99).
• Mr. Phillibert stated that, “from those earnings, dividends of $0.85 were declared relative to $0.57 in the prior year, up 49%. I’d like to note that the $0.85 includes a special dividend of $0.20 declared in 2016 and paid in January of 2017.”
• The CFO highlighted that the company’s stock price relative to the Jamaica Stock Exchange Main Market Index between 2011 and 2016, has appreciated 233% relative to the index’s 202%.
Key event which contributed to the performance was:
• Firstly our largest or most significant project is the development of the Oceanna Building in Downtown Kingston. We have successfully leased the commercial phase of our 51,000sq ft. office space and that we started to generate rental income during 2016.
• Full year of operation with the Court Yard Marriott
• Divestment of PJAM’s interest in Hardware & Lumber in the first quarter and Mavis Bank Coffee Factory in the third quarter. Mr. Phillibert noted that both divestments were, “attractive and caused us to realise gains.”
• Finally the company undertook a stock split where each share was subdivided into five units and based on trading activity associated with the stock, the CFO indicated, “that it appears to have improved the liquidity of the stock.
Year to Date Performance 2017
Mr. Phillibert on the company’s year to date performance highlighted, revenue for the quarter was up to $501.56 million (2016: $381.35 million) following increases in income derived from Investments, Property and Other income. Share of results of associated companies for the quarter improved $223.43 million to close the quarter at $817.66 million, up 38%. Profit attributable to shareholders at the close of the first quarter amounted to $830.20 million relative to $721.45 million for the comparable period in 2016. The CFO noted that, “first of all the occupancy is at a good level although we aspire to increase this above 90%. In regards to the investment line, we have seen a reversal of low commodity prices and that has brought gains in the securities that we hold in our investment portfolio. In addition to that, the equity markets have been relatively buoyant, providing an opportunity to liquidate some securities for realised gains.”
Investments and Associated Companies
In 2016, share of results from associated companies increase 14% year over year to $3.64 million. Mr. Hanworth noted, “our share of results from associated companies continues to be dominated by Sagicor, a diversified financial services business which we own 31.5%.” Chukka Caribbean Adventures Limited, a regional leader in adventure tours, operating in three countries produced$23 million for PJAM’s share of results. PJAM owns a 20% stake in the business. New Castle according to the COO, had an improved year, generating $68 million versus $61 million in 2015. The company which PJAM has a 25% stake in has a new distribution arrangement in the USA which according to the COO to, “should expand geographically throughout the continent of the USA, its exports and distribution of the Walkerswood, Busha Browne and Jamaica Joe lines of sauces and seasonings.” Lastly, The Courtyard Marriott completed its first full year of operation in 2016 producing share of profits of $27 million for PJAM.
Outlook
With the 2013 International Monetary Fund (IMF) programme successfully completed and adoption of a new standby arrangement, Mr. Hanworth stated, “we will be gathering momentum towards a level of growth and national improvement unseen for decades. PJAM will continue to be bullish on investment and focused on finding additional opportunities in Jamaica for the profitable deployment of our capital.”
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