Aug 2012 Financial News

Lascelles liquidates J$5b of investments, to pay J$3b dividend

Aug 01, 2012

Jamaican spirits conglomerate, Lascelles deMercado & Company Limited, has declared a special dividend for its shareholders amounting to J$3 billion, but the company has not said what sparked the payout.

The distribution of J$31.25 per share scheduled for August 31 will largely benefit the Trinidad government which owns 86.9 per cent of the company.

Notice of the distribution was posted on the Jamaican Stock Exchange on Monday, a day ahead of the release of the company's third quarter earnings report. The June third quarter profit grew eightfold from half-billion dollars to J$4.4 billion, but only because Lascelles liquidated about J$5 billion of financial assets. Profits for the full nine-month period amounted to J$5.8 billion or almost triple the J$2 billion made in the year-prior period.

"The net profit is materially increased with the generation of other income totaling J$4.07 billion," the company reported to shareholders. "This primarily represents gains on the sale of equities and reflects the continuing execution of our strategy to release capital from non-core activities and investments."

The liquidation boosted Lascelles cash to more than J$10 billion, while its investment portfolio has fallen from J$8.25 billion to J$2.49 billion in nine months.

Company Secretary Jane George when asked the reason for the special payout said the company saw little value in holding too much cash.

"We have taken a decision to return excess cash to our shareholders given that there is little income to be earned by holding cash at this time and our operating companies are well financed," said George.

"The timing of the payment simply reflects the timeline as the cash has been generated," she said.

The company, since 2011, has adopted a more generous dividend policy.

In 2010, distributions totalled J$5.50 per share or J$528 million in total, but last year, following a change of management and continuing adjustments to the board of directors, Lascelles paid out a combined J$42.20 per share to shareholders, amounting to J$4.05 billion.

Scotsman Fraser Thornton replaced Jamaican William McConnell as CEO at the start of July 2011. The board is chaired by Gerald Yetming of Trinidad with Jamaican lawyer Conrad George as deputy chairman. A new director, Joseph Teixeira, was last added to the board on July 27, 2012 following the resignation of Wayne Yip Choy in March.

The distributions for this year are already in striking distance of last year's payouts. The August payment will bring declared dividends to J$40.25 per share year to date, amounting to J$3.86 billion.

Trinidad's share of declared dividends since 2010 amounts to J$7.3 billion.

The Trinidad government came into possession of Lascelles when it took over the Jamaican company's parent, CL Financial group in 2009.

Lascelles' is mainly in the business of rums, wine and liquor, but it also operates businesses in insurance, automotives and merchandising.

It is currently in the process of selling off its general insurance subsidiary, Globe.

The conglomerate's most valuable asset is its rum business 186-year-old J. Wray & Nephew Limited, the producer of Appleton and Wray & Newphew spirits.


Source:
business@gleanerjm.com
Jamaica Gleaner
Wednesday August 1, 2012

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