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Caribbean Assurance Brokers’ IPO closes in one minute

Caribbean Assurance Brokers (CAB) Limited saw its initial public offer (IPO) close after one minute of availability yesterday, February 18.

The oversubscribed listing sought to offer up 52.5 million ordinary shares of CAB at a price of $1.91, which would have put funds raised at just over $100 million, according to its prospectus.

Lead arranger for the IPO, Mayberry Investment said the application list opened at 9:00 AM and closed at 9:01 AM.

The IPO was slated to run until March 3 if the offered shares were not applied for before then.

“The company believes that there are opportunities to expand its brokerage operations…Accordingly, the company intends to examine these opportunities with a view to growing its customer base and, in turn, its revenues.”

– Caribbean Assurance Brokers prospectus

Mayberry further said it will advise applicants of the preliminary basis of allotment of shares by Friday, February 21, adding that it has made an application to have the shares listed on the JSE’s Junior Market but gives no guarantee this will be done.

For the nine-month period up to September 30, 2019, Caribbean Assurance grossed revenue of $336.1 million compared to J$328.1 million in the same period of the previous year.

The Jamaica Stock Exchange

Operating profit for the period declined 17.95 per cent year-on-year from J$93.4 million to $J76.6 million. It said a finance cost of J$5.3 million compared to $1.6 million the comparable period, from an increased additional loan for a mortgage from Bank of Nova Scotia was partly responsible for the dip. Other factors contributing to the drop are changed commission rates for agents and increased taxation.

In its prospectus, CAB said it plans to expand its brokerage offerings in the region beginning with Trinidad and Tobago. “The company believes that there are opportunities to expand its brokerage operations throughout the English-speaking Caribbean by setting up offices in Trinidad & Tobago and establishing strategic alliances in other Caribbean territories. Accordingly, the company intends to examine these opportunities with a view to growing its customer base and, in turn, its revenues.”

Caribbean Assurance Brokers is a multi-line insurance brokerage offering the full spectrum of insurance products and services throughout Jamaica.