Eppley graduates to main JSE market
Published:Monday | December 31, 2018 | 12:00 AMSteven Jackson/Senior Business Reporter
Investment company Eppley Limited, which provides financing for businesses, has become the first company to transition from the junior market of the Jamaica Stock Exchange (JSE) to the main market in a move described as net positive.
Eppley's ordinary shares and four sets of preference shares were listed on the main market, effective December 31, 2018.
The transition means that Eppley will no longer benefit from the junior market tax incentive under the Income Tax Act. However, since the company is an approved venture capital outfit under Section 36A of the act, it is not expected that its effective corporate income tax rate will be adversely affected by the graduation, according to managing director of Eppley Nicholas Scott, responding to Financial Gleaner queries on Monday.
"We believe that the graduation is net positive for shareholders, since it provides for an even higher level of governance standards," said Scott." Moreover, it recognises Eppley's significant growth and development since its listing," he added.
Companies listed on the junior market are granted a 10-year tax incentive: Those companies pay no income tax for the first five years after their listing on the JSE and the remaining period at half the income tax rate or 12.5 per cent.
Eppley made $80.7 million in net profit for its financial year to September 2018 or 56 per cent higher year-on-year. It paid no income tax on its profits as it was within the first five years of listing on the junior market.
Eppley became a listed company on July 29, 2013. Its shareholder equity totalled $740.4 million as at September 2018, with total assets at $3.16 billion.
Scott, in explaining the growth of the company, indicated that its off-balance sheet portfolio reflects the size of a main market company.
"Just as an example, Eppley now manages the Eppley Caribbean Property Fund, a US$40-million mutual fund in Barbados with properties in the Eastern Caribbean, over 2,000 shareholders and listings on the main markets in Barbados and Trinidad. Eppley's own main market listing in Jamaica now aligns its own standing with that of the fund," added Scott.
He indicated that the move to the main market is not a precursor to raising larger funds. Scott noted that while Eppley continues to grow, there are "no current plans or requirements" to raise additional equity capital at this time.
The company's graduation reflects its growth, increasing scope, and ability to comply with the governance standards applicable to companies listed on the main market, Eppley said in a statement.
In addition to its objective of generating stable and attractive returns by capitalising on efficiencies in Caribbean financial markets, Eppley invests in mezzanine and real estate through the Caribbean Mezzanine Fund, the first credit and mezzanine fund focused on the Caribbean, alongside its joint venture partner NCB Capital Markets, and the Eppley Caribbean Property Fund, a closed-end real estate mutual fund listed on the Barbados and Trinidad and Tobago stock exchanges.