Pan Jamaica merger results in upsized assets of $127b
Published:Wednesday | August 23, 2023 | 12:09 AMSteven Jackson - Senior Business Reporter
A more diversified Pan Jamaica Group Limited grew its earnings by one-fifth in the June quarter, due to its absorption of the food and logistics operations of Jamaica Producers Group.
Shareholder profit rose to $1.08 billion in the quarter, or 80 cents per share, up from to $694.4 million, or 66 cents per share, a year earlier.
“The notable shift in the group’s earnings trajectory in the second quarter can be attributed to the successful amalgamation of the operating businesses,” the group stated in its financial report.
The merged entity created a $127-billion business in total assets, up from $55 billion, while its capital base doubled from $40 billion to $94 billion.
“Looking forward, we expect that the combined entity will benefit from the diverse portfolio of businesses that now include food and drink and logistics and infrastructure, alongside property and investments in market-leading firms in financial services, hotels and attractions, and business process outsourcing,” the company said.
The amalgamation became effective on April 1. Under the deal, Jamaica Producers transferred its assets to Pan Jamaica and took the largest stake of 34.5 per cent in the new company in return.
Previously, the net earnings of Pan Jamaica, formerly known as PanJam Investment Limited, would normally outpace its top line income due to the share of profit that flowed from its stake in various companies. But the merger has changed that.
For three months ending June, Pan Jamaica booked revenue of $9 billion, compared to core revenue of $489 million the previous year. Its cash position also spiked from $1.1 billion to $12.9 billion due to the absorption of liquid assets under the merger.
Noting that its earnings profile in the second quarter was now markedly different, Pan Jamaica identified its new operating segments as property and infrastructure; financial services; global services; and speciality foods.
Pre-merger, the main segments were property management and rental; investments; and hotel management.
The new Pan Jamaica, which is led by Jeffrey Hall as CEO and Stephen Facey as chairman, has 5,328 shareholders who hold 1.67 billion of issued PJAM shares, the top five being Jamaica Producers, Boswell Investments, Sagicor Pooled Equity Fund, National Insurance Fund, and client accounts for Scotia Jamaica Investment Management.