November 17, 2020
Sagicor Select Funds Limited (SELECTF), for the nine months ended September 30, 2020 reported net investment loss of $1.69 billion relative to an income of $1.01 billion booked September 30, 2019. As for the quarter, net investment income amounted to $92.62 million relative to an income of $577.41 million booked last year same time.
Net foreign currency gains and other income closed the nine months period at 140,000 (2019: $1.81 million) and the third quarter at $76,000 (2019: $2.07 million). Dividend income amounted to $47.40 million (2019: $61.79 million) for the nine months. Interest income for the period under review also amounted to $984,000 (2019: $816,000). SELECTF noted, “Dividend income continues to reflect the impact of COVID-19 on the financial companies, particularly deposit taking institutions. The reduced dividend income is largely attributable to: (i) central bank’s decision to mandate the suspension of dividend payments by deposit-taking institutions, as well as, (ii) companies reserving payments to buffer their cash holdings due to possible fall-out.”
As such, total loss for the period under review equated to $1.69 billion, as for the nine months of 2019, total revenue amounted to $1.01 billion. However, at the end of the third quarter total revenue closed at $92.70 million, while September 2019 quarter booked an income of $579.48 million. Management noted, “largely attributable to the unrealised appreciation in the value of investments amounting to $83.2 million. This was reflective of higher prices for some financial stocks evidenced by the uptick of 0.7% in JSE Financial Index.”
Total expenses for the nine months period closed at $26.17 million (2019: $100.35 million), while for the quarter, total expenses totalled $5.10 million (2019: $77.81 million). The company explained that, this was “largely comprising of management fees. During the quarter the fund acquired shares in Barita Investments Limited through their APO. This was done to increase the portfolio’s weighting in anticipation of the higher index weighting due to the APO.”
Consequently, net loss closed the nine months period at $1.71 billion, compared to a net profit of $913.32 million reported for the nine months ended September 30, 2019. However, at the end of the third quarter net profit closed at $87.60 million relative to a profit of $501.67 million.
Loss per share for the period under review amounted to $0.34, while for nine months of 2019, earnings per share totalled $0.18. For the quarter, EPS amounted to $0.02 (2019: EPS of $0.10). The trailing twelve months loss per share amounted to $0.32. The number of shares used in this calculation was 5,100,000,000 shares. SELECTF last traded at a price of $0.62 on November 16, 2020.
Balance Sheet Highlights:
Total assets, as at September 2020, amounted to $4.23 billion (2019: $5.98 billion). Of this, ‘Financial assets at fair value through profit or loss’ totalled $4.15 billion (2019: $5.63 billion), while Cash and Cash Equivalents closed at $52.50 million (2019: $353.35 million).
SelectF, as at September 30, 2020, booked shareholders’ equity of $4.23 billion versus $5.98 billion booked in 2019. Net asset value per share amounted to $0.83 (2019: $1.17).
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.