Nov 2010 Financial News

Proven gains US$3.8m from GAM acquisition

Nov 03, 2010

Proven Investments Limited (PIL) will go public by next March, the company said Monday, well within the 18-month deadline it promised the private holders of its share.

The announcement was made alongside the company's revelation that it booked a gain of US$3.8 million on its acquisition of the operations of Guardian Asset Management Jamaica Limited (GAM) in the quarter ending September 30.

The gain fattened Proven's bottom line to US$4.995 million in the quarter.

Its seven-month profit — Proven has been in operation since February — reached US$5.55 million.

A dividend of US$800,000 or 27 cents per share will be paid to all shareholders on November 19, but PIL also said preference share-holders will get US$1.148 million in dividends based on the September quarter results.

GAM, which was renamed Proven Wealth Limited, is the company's sole acquisition to date, but Proven's chief executive officer and shareholder Chris Williams said the company was "having discussions right across the region" regarding potential targets.

Its acquisitions and investments are done through Proven Management Limited.

The Guardian deal said Williams bumped up PIL's return on average equity to 38 per cent at September.

"A part of our strategy is private deals, buying equity or debt positions in private companies, and we have done that very successfully with the acquisition of Guardian Asset Management," he said.

"We were able to get Guardian Asset Management at a discount to book price and therefore the transaction has proved to be very profitable for our shareholders."

Chairman Peter Bunting also boasted that the company's performance likely "exceeded the expectations of our most ambitious shareholder", and that the return on average equity of 14 per cent, in US dollar terms, compared favourably with anything available on the market," he said.

PIL is currently valued by assets at US$174.5 million, of which US$133.8 million is held as available for sale investments, while fixed assets amount to US$359,000. Proven Wealth's overall exposure to GOJ securities was reduced by selling US$56 million of assets, the company said.

PIL scored top line revenue of US$2.08 million in the seven months; US$1.66 million in the second quarter. Net interest income was US$1.04 million and US$646,846 in the respective periods.

The pending listing on the Jamaica Stock Exchange will come in one year of Proven's start-up. The application to the JSE has already been approved by the board.


Source:
sabrina.gordon@gleanerjm.com
Jamaica Gleaner
Wednesday November 3, 2010

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