May 19, 2020
SSL Venture Capital Jamaica Limited (SSLVC)
For the nine months ended March 31, 2020
SSL Venture Capital Jamaica Limited (SSLVC), for the nine months ended March 31, 2020, reported revenues of $112.02 million versus $341.76 million reported in the prior year’s corresponding period. While for the quarter, SSLVC reported $16.72 million (2019: $93.60 million) in revenue. SSLVC stated that, this decrease was caused by “a drastic decline in revenue from Bar Central Jamaica Ltd (BCL) and Muse 360 Integrated Limited (Muse) accounted for the shortfall.”
Furthermore, management noted, “Bar Central Limited (BCL)’s year over year revenue decreased by $193M, primarily due to management and working capital issues. Muse’s year over year revenue fell by $42M, with the company being mothballed since August 2019 following the resignation of the former CEO and the entire staff. We are evaluating the way forward for this company.”
Cost of sales amounted to $100.91 million (2019: $313.42 million), thus resulting in gross profit of $11.12 million relative to $28.34 million booked last year. Gross profit for the quarter amounted to $1.1 million versus $7.80 million booked for the second quarter ended March 31, 2019.
Other income closed at $34.49 million (2019: $36.05 million) for the nine months period ended March 31, 2020. In addition, administrative expenses totalled $105.92 million in the nine months ended March 31, 2020 compared to $145.78 million documented in the previous year.
Moreover, SSLVC reported that, “The expenses even though lower than prior year, remains high mainly due to approximately $45M in costs incurred during the second quarter of 2019 to resolve governance and financial management issues to allow for the lifting of the suspension of the company shares and for trading to resume on the Jamaica Stock Exchange. The Group will continue to monitor the expense line to reduce and maximize efficiencies across the group wherever possible.”
Consequently, SSLVC recorded operating loss of $60.32 million versus a loss of $81.39 million reported in 2019. Operating profit for the second quarter closed at $9.02 million relative to an operating loss of $35.60 million reported for the same quarter of 2019.
Finance cost for the period grew 910% to close at $11.47 million compared to $1.14 million reported in 2019.
For the nine months ended March 31, 2020, there was a taxation credit of $23.93 million (2019: $27.51 million). The Company reported a net loss from continuing operations of $47.86 million versus a loss of $55.02 million reported in 2019. Net proft from continuing operations for the quarter amounted to $3.05 million versus a net loss from continuing operations of $23.74 million booked in 2019.
Loss on discontinued operations, net of tax for the nine months amounted to $8.39 million (2019: nil). As such net loss totalled $56.24 million (2019: $55.02 million) for the nine months ended March 31, 2020. For the quarter, net loss summed to $5.34 million (2019: $23.74 million).
However, net loss attributable to shareholders amounted to $49.27 million compared to a net loss attributable to shareholders of $43.39 million in 2019. For the quarter, net loss attributable to shareholders was $4.22 million (2019: $16.68 million).
Loss per share (LPS) for the period amounted to $0.123 versus a loss per share (LPS) of $0.108 the prior year, while LPS for the quarter amounted to $0.011 (2019: LPS $0.042). The trailing twelve months loss per share amounted to $0.105. The number of shares used in our calculations is 400,000,000. SSLVC stock price closed the trading period at a price of $0.90 on May 18, 2020.
With regard to new developments, management further noted, “On March 27, 2020, SSL Venture Capital Jamaica Limited (SSLVC) entered into an agreement with the Founder and CEO of Blue Dot to sell its 50% stake in the company. The Board and Executive Management of SSLVC considers this sale a strategic decision which is aligned with the new direction of the group and the plans to improve shareholder value by re-aligning the business for greater efficiency, management, and profitability. The full impact of the Blue Dot sale has been accounted for in the quarter ending March 2020. Bar Central Limited (BCL) was also restructured during the period under review and a new management team was hired with Mr. Nigel Bair as General Manager and Mr. Nicholas McDavid as Sales, Marketing and Promotions Manager. Both individuals are very experienced in the beverage and liquor distribution business and the FMCG sector.”
With regards to the pandemic, the company noted that “COVID-19 has negatively impacted performance for the remainder of the year especially in the distribution segment. Our strategy is therefore focused on assessment, containment, risk management, divestment, social distancing, remote operations and use of technology in no preferred order. With the recently completed alignment and repositioning of the group, it is expected that the full impact of the COVID-19 pandemic will smooth out over time and that the group will come out on the other side, a much stronger and stable organization.”
Balance Sheets Highlights:
As at March 31, 2020, total assets amounted to $167.39 million down 41% from the $283.01 million booked in 2019. This decrease was mainly due to decreases in ‘Inventory’, ‘Goodwill’, ‘Cash and Bank deposits’ which closed at $4.23 million (2019: $17.83 million), $53.81 million (2019: $107.51 million) and $2.82 million ($41.15 million), respectively.
Shareholders’ deficit closed at $117.69 million relative to shareholders’ deficit $62.35 million recorded in the prior year’s corresponding period. This resulted in a shareholders’ deficit per share of $0.29 (2019: $0.16). Notably, Management mentioned, “The company received funding from its Parent company to provide working capital support during the period. The Parent company will continue to provide funding to the company as needed until new external funding can be sourced.”
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