May 17, 2021

Sagicor Select Fund Manufacturing & Distribution (SELECTMD) for the three months ended March 31, 2020 reported net investment income of $508.62 million relative to a loss of $1.08 billion booked March 31, 2020. This is comprised of:

• • Interest income which amounted to $347,000 (2020: $781,000).
  • Dividend income which closed at $23.87 million (2020: $18.77 million). SELECTMD noted, “The impact of COVID-19 on profits has impacted dividend pay-out, as some companies reduced pay-out during the third quarter relative to previous quarters. Of note is that some companies are still reserving dividend payments to buffer their cash holdings due to possible fall-out in the future. The companies within the sector that provide household items may not be adversely impacted by the global pandemic.”
  • Net gain in fair value on financial assets at fair value through profit or loss closed at $484.37 million versus a loss of $1.10 billion booked for the comparable period in 2020.

Net foreign currency gains or losses and other income closed the three months period at $37,000 (2020: $18,000).

Total expenses for the three months period closed at $7.76 million, while for the same quarter in 2020, total expenses totalled $10.79 million. Of this, administration expenses equalled $7.76 million, (2020: $10.79 million) for the three months ended March 2021. Management noted that, “The cost was comprised mainly of management fees and transaction costs. During the quarter, the fund continued to improve the portfolio weightings closer to the index weighting. The lower stock prices continue to provide an opportunity to increase holdings at a lower cost. Acquisitions included holdings in Jamaica Producers, Lasco Distributors, Tropical Battery and Derimmon Trading Limited during their APO. In addition, the Fund reduced its position in GraceKennedy and realised some gains. This led to portfolio weightings moving closure toward index weighting during the quarter.”

Consequently, net profit closed the three months period at $500.87 million, compared to a net loss of $1.09 billion reported for the first quarter ended March 31, 2020. The Company highlighted, “The outturn for Q1 of 2021 was primarily due to unrealised appreciation in the value of investments. This reflected increases in some prices of listed manufacturing and distribution companies relative to the end of December 2020. This was evidenced by a rise in the value of the JSE Manufacturing & Distribution index by 12.8% over the first three months of 2021.”

Earnings per share for the period under review amounted to $0.13, while for 2020 first quarter, loss per share totalled $0.29. The trailing twelve months earnings per share amounted to $0.24. The number of shares used in this calculation was 5,100,000,000 shares. SELECTMD price was last traded at a price of $0.95 on May 14, 2021.

Balance Sheet Highlights:

Total assets, as at March 2021, amounted to $3.78 billion (2020: $2.86 billion), a 32% increase. Of this, Cash and Cash Equivalents closed at $81.13 million (2020: $113.01 million), ‘Receivables’ amounted to $6.82 million (2020: $5.16 million) while ‘Financial assets at fair value through profit or loss’ totalled $3.69 billion (2020: $2.74 billion).

SELECTMD, as at March 31, 2021, booked shareholders’ equity of $3.77 billion versus $2.85 billion booked 2020. Net asset value per share for the three months amounted to $0.99 (2020: $0.75).