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Jamaican Teas delays April 1 stock split

Listed company Jamaican Teas Limited will not execute its three-to-one stock split as planned for April 1 this year.

The manufacturing and real estate company has pushed back its stock split for a date to be determined by its board of directors, led by businessman and financial analyst, John Jackson.

In addition to pushing back its stock split, Jamaica Teas has also postponed its Annual General Meeting, which should have taken place on Friday, March 20.

These necessary changes have come about due to the COVID-19 pandemic and in case of the postponement of the AGM in accordance with the pronouncements of the Government of Jamaica on March 16, ordering a restriction on large gatherings. The AGM will be rescheduled for a date and time best-suited and safe health-wise for large gatherings.

Jamaican Teas chairman John Jackson

The three to one stock split when executed will result in the total issued shares in the company being increased from 695,083,459 ordinary shares of no par value to 2,085,250,377 ordinary shares of no par value. This latest stock split, which will be the third by the company, is being executed to make the shares in Jamaica Teas more liquid and allow them to trade more freely.

The first stock split was in April 2017 when shareholders approved a two-to-one split of the stock, followed another split in 2016, after which the price climbed close to $8 per share. Lately the board of Jamaican Teas has become concerned that the company’s stock seems to have hit a wall of inactivity and market indifference.

Its chairman, John Jackson expressed that there seems to be market resistance whenever the stock hits the $6 to $7 margin. Since April 2018, Jamaican Teas share price has meandered between $4 and $6, going close to the $7 barrier only twice last year, on August 5 and September 9.

At the close of trading today, Jamaican Teas lost $0.36 to end the day at $4.05. At year-end September 2019, Jamaican Teas doubled profit despite spinning off its investment arm and listed a new company, QWI Investments. Jamaican Teas, owns 34 per cent shareholding in QWI Investments.

In October 2019, Jamaica Teas purchased the 50 per cent of Bay City Foods, located in Montego Bay, making it a wholly-owned subsidiary of the group. At year-end September, net profit attributable to Jamaican Teas for the year increased by $201.2 million from $198.5 million to $399.7 million.

This resulted in earnings per share from continuing operations of 57.8 cents compared to the 29 cents recorded for 2017/2018. The directors of Jamaica Teas in remarks attached to the fourth-quarter report reported that investment properties produced $72.3 million in gains in 2019 compared with $24.8 million in 2017/2018.

However, the main tea business suffered a temporary setback in sales in the USA market due to a main distributor there right-sizing its inventories.