Oct 2008 Financial News

Lascelles sales boost Mayberry's profits

Oct 31, 2008

Local brokerage house, Mayberry Investments saw a huge jump in its net profit for the nine-month period ended September 30th, 2008, driven by net interest income and net trading gain on investment.

According to unaudited results for the period under review, Mayberry - headed by chairman Christopher Berry - posted a net profit of J$766 million reflecting a 310 per cent increase on the J$187 million posted for the corresponding period last year. For the third quarter of this year, Mayberry posted a net profit of J$96.1million, a marginal increase on the J$94 million posted for the same period last year.

According to CEO Gary Peart's executive commentary on these financial results, this profit growth was due to an increase of Mayberry's total operating income to J$1.2 billion compared to J$560 million for 2007, an increase of 117 per cent. Peart attributes the diversification of the company's revenue streams for the uptick in operating income. Realised income has increased by J$970 million over 2007.Net interest income proved to be a winner for Mayberry with the brokerage posting a figure of J$358.5 million for the nine-month period ended 30th September, 2008. This repre-sents an 84 per cent increase on the J$195.2 million posted for the corresponding period last year.Fees and commissions registered mixed fortunes. For the third-quarter period this revenue stream declined, coming in at J$13.1 million as opposed to J$18.3 million for the same period last year. The nine-month period painted a rosier picture. Here, Mayberry netted J$131.6 million, a huge increase on the J$56.6 million registered for the same period last year.

The sale of Lascelles De Mercado to Trinidad & Tobago's Angostura served as a boon to Mayberry, helping to bolster its financial performance this year. Here, net trading gain on investment brought in J$719.2 million for the nine-month period under review.For the same period last year, the figure was just J$51 million. Fixed-income trading activities helped to propel this segment in the third quarter of this year where Mayberry registered J$164.4 million as opposed to a negative 19.6 million last year.As far as net interest income and other operating income was concerned, it was again a case of Mayberry faring better over the nine-month period than in the third-quarter period. For the third quarter of 2008, the net interest income and other operating revenue fell to J$218.4 million when compared to the correspon-ding period last year which came in at J$242.8 million. Over the longer stretch, the nine-month period, this year Mayberry posted a whopping J$1.2 billion whereas last year that number was just J$560 million.

Like most of its competitors, Mayberry saw its administrative expenses rise to J$370.2 million for the nine-month period under review compared to J$320.7 million for the same period last year. Increasing operational cost may well have been a big factor here, in addition to rising staff costs brought on by spiralling inflation.For the third quarter, it would appear that Mayberry was able to curtail administra-tive spending, recording a figure of J$126.6 million, an eight per cent increase on last year's J$117.4 million.Total assets increased by J$5.8 billion to J$27.2 billion for the nine-month period under review. Mayberry's CEO attributes this to increases in cash resources, investments and promissory notes and loans and other receivables. The loan portfolio jumped to J$1.3 billion, a 48 per cent increase on the J$856.6 million posted for the nine-month period last year. Mayberry made a provision for loan impairment of J$20 million, bringing its total provision to J$35 million.

The global financial raises the question, what will the likely impact be on brokerages such as Mayberry Invest-ments? Anticipating that question, Peart wrote in his executive commentary, "Con-sequent on the crisis in the world financial markets, management has taken a conservative outlook on the market. We have not experienced any impairment arising from the crisis; our portfolio is well diversified and we continue to exercise strict risk management practices to ensure our portfolio remains shielded."


Source:
The Jamaica Observer
Al Edwards
Friday October 31, 2008
http://www.jamaicaobserver.com/magazines/Business/html/20081031T0000000500_141974_OBS_LASCELLES_SALES_BOOST_MAYBERRY_S_PROFITS.asp