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Mayberry Investments reports second quarter loss

Mayberry Group recorded a loss of $3.9 million for the quarter when compared to a profit of $293.9 million for Q2 2019.

Chief executive officer Gary Peart states that this was attributable to reduced fees and commissions, lower foreign exchange gains and unrealised loss on investment securities resulting from downward price movements on equities.

Net profit attributable to shareholders was $8.9 million for Q2 2020, compared to $264.3 million in the prior year corresponding quarter, resulting in an earnings per share (EPS) of $0.01 compared to an EPS of $0.22 for Q2 2019.

Peart, in remarks attached to the quarter’s results, said the global and local financial markets have experience three full of months of the negative impact of the coronavirus (COVID-19), and as the impact continues to evolve, the organisation will continue to assess the financial landscape.

Mid-point in its financial year, total assets for company to $27.9 billion compared to $41.6 billion for the corresponding period ended 30 June 2019.

Peart said the decline in asset balances was primarily due to a reduction in investment securities in quoted equities of $11 billion and reverse repurchase agreements of $2.5 billion.

In addition, cash resources were lower by $511 million, loans and other receivables declined by $861.3 million and deferred Taxation was lower by $67 million.

This position was offset by increases in promissory notes of $1.1 billion, other assets of $39.2 million and right of use assets of $123.3 million. This was coupled with increases in intangible assets.

Total liabilities for the company stood at June 30 at $15.1 billion, a $6.5 billion or 30.2 per cent decrease over the prior corresponding period.

Dividend income of $249.4 million increased by $145.9 million or 141 per cent, Q2 2020 over Q2 2019.

Dividends issued from holdings mainly in Supreme Ventures Limited and Jamaica Broilers Group Limited led to the dividends earned for this period under review.

Interest income of $193.3 million in Q2 2020, earned from interest on repurchase agreements and bond portfolio, was lower by $47 million, compared to $240.4 million in the corresponding quarter in 2019;

Fees and commission income of $115.1 million were lower by 57.7 per cent over the corresponding period in 2019, primarily due to the following:  Equity commission decreased by $25 million; Selling fees debt was lower by $12.3 million and IPO Selling fees income did not materialise for the quarter due to delayed projects in the pipeline.

Other revenues under this category that provided a positive offset were namely, Corporate Advisory fees of $46.7 million which improved by $6.4 million, MIL US$ Portfolio Corporate Note grew by $2.9 million and Loan processing fees increased by $3.1 million.

Foreign exchange gains of $45.6 million in Q2 2020 decreased by $106.7 million due mainly to realized and unrealised foreign exchange losses booked during the quarter, despite higher spreads from the Cambio business which recorded revenues of $96 million, $8.3 million higher than the corresponding quarter in 2019.

Peart said Mayberry Group’s capital base remained strong, with total shareholders’ Equity at $12.8 billion at the end of June 30, 2020.

The year over year reduction of $7.2 billion was driven by a decrease in fair value reserves.

This position was countered by improved retained earnings of $5.4 billion for Q2 June 2020, up from $4.6 billion in the corresponding period.

The company CEO said capital base continues to be robust with a capital to risk weighted asset ratio of 17.6 per cent improved from 16.3 per cent  for Q1 2020 complies with the established minimum of 10 per cent set by the Financial Services Commission (FSC).

In addition, the company’s tier one capital is 99 per cent of the overall capital of the company and exceeds the regulatory minimum of 50 per cent established by the FSC.