Neal & Massy subsidiary profits move up

Neal and Massy released excellent results for the half year ended March 31, 2005 during the week. Third party revenue increased by a healthy 19.35 percent moving from $1.464 billion in 2004 to $1.747 billion in 2005. The chairman attributed this to solid performances by all the Group’s business units. Operating profit increased by 20.43 percent moving from $112.210 million in 2004 to $135.138 million in 2005. Share of results of associates increased by 53.85 percent moving from $17.264 million in 2004 to $26.561 million in 2005. The main contributor to this would have been Barbados Shipping and Trading which had a significant capital gain from the sale of shares in Neal and Massy.

Profit before taxation increased by 24.89 percent moving from $129.474 million in 2004 to $161.699 million in 2005. Taxation increased by a much steeper 37.60 percent moving from $33.492 million in 2004 to $46.086 million in 2005. The effective tax rate jumped from 25.87 percent in 2004 to 28.50 percent in 2005. As a consequence profit after tax increased by a narrower 20.45 percent moving from $95.982 million in 2004 to $115.613 million in 2005. Profit attributable to shareholders increased from $88.787 million in 2004 to $108.306 million in 2005. This translates to earnings per share of $1.22.

The chairman has indicated that he expects this solid performance to continue for the rest of the financial year. We concur with this expectation and wish to reiterate our earnings estimate of $2.79 per share which at the current price of $59.01 translates to a PE of 21.50.

The Board of Directors has approved the payment of an interim dividend of 28 cents per share which is 2 cents per share more than 2004. This dividend will be paid on June 6, 2005 to shareholders on the Register at the close of business on May 24, 2005.

Dehring Bunting &
Golding revenue jumps
Dehring Bunting &
Golding Ltd
Results for the year
ended March 31, 2005.
Amounts in J’ca Dollars

Net interest revenue for the year ended 31 March 2005 grew by 94.26 percent to reach $637.44 million and net interest margin jumped from 8.92 percent to 20.93 percent, compared with 2004. The company benefited from declining interest rates, increased loan and investment activity, improved interest rate differentials in both local and foreign currencies. Although interest revenue fell by 17.15 percent to $3.05 billion, down from $3.68 billion in the previous year, interest expense declined by 28.07 percent to $2.41 billion.

Gains on security trading of $516.83 million, including unrealised profits of $189.6 million from its marked to market securities and a one-off prior year gain of $30 million, was 1.75 percent lower than in 2004. Foreign exchange gains were also down from the previous year, dropping 4.06 percent from $202.27 million to $194.05 million. Fees and other income however, rose by 127.53 percent to $308.77 million primarily due to a significant increase in brokerage fees which occurred as a direct result of increased market share.

Net revenue for the year amounted to $1.66 billion, up 39 percent from $1.19 billion in 2004. Net interest as a proportion of total net revenue rose from 27.52 percent to 38.47 percent. Profit before taxation was $800.09 million compared with $547.61 million, up 46.11 percent, while net profit reached 795.42 million, up 47.68 percent from $538.6 million. Net profit margin rose from 45.18 percent in 2004 to 48 percent in 2005. The company posted earnings of $2.62 per share ($1.85 – 2004)

At the current price of $2.69 per share and a currency translation rate of J$10 to TT$1, DB&G earnings per share of 26 cents gives a price/earnings multiple of 10.26 times, the lowest in the non-banking finance sector.

Capital & Credit
Merchant profits up
Capital & Credit
Merchant Bank Ltd.
Results for the first quarter ended March 31, 2005
Quoted in J’ca Dollars

With the results of the operations of what was previously the Jamaica Unit Trust Services Ltd incorporated into the group results, Capital and Credit Merchant Bank reported a 53.92 percent growth in their net interest income and other revenue for the first quarter 2005. Net interest income and other revenue reached $721.4 million, compared with $468.69 million in the corresponding period in 2004, an increase of $252.71 million. This achievement is characterised by significant growth in net gains on securities trading of $197.68 million, of which $66.95 million is unrealised marked to market gains.

Profit before tax of $453.14 million was 32.63 percent higher than the $341.67 million achieved in 2004. Profit after tax reached $362.95 million, up 31.91 percent, while profit attributable to equity holders was $364.91 million. The group posted earnings per share of 62 cents, up 15 cents or 31.91 percent from 47 cents posted in 2004.

At the annual general meeting held on May 10, 2005, the shareholders approved the resolution to increase the authorised share capital of the company by $100 million to $400 million via the issue of 200 million shares. A rights issue has also been authorised to follow the issue of the new shares, for which the Board of Directors has been given the approval to set the share price, ratio, record date and any other connected matter.

Capital and Credit Merchant Bank aims to have its income stream diversified to ensure that 50 percent of its total income in the long run is derived from fees as well as having 50 percent of income generated from non-Jamaican assets. The chairman highlighted the rights issue as having an integral part in the bank’s strategic expansion, long-run growth, development and enhancement of shareholder value.

WISE is a subsidiary of RBTT Financial Holdings Limited

West Indies Stockbrokers Limited, 23a Chacon Street, Port of Spain, Trinidad (868) 623-4861 Fax (868)-627-5002 e-mail: info@wisett.com

Member of the Trinidad and Tobago Stock Exchange Ltd.