Heaven aiming to double Proven profit as successor

Johann Heaven will take over the leadership of investment holding company Proven when its founding head steps down in January.

The CEO-designate of Proven Management Limited, PML, will be aiming to double earnings.

PML is the management company for Proven Group Limited, the latter of which was incorporated in late 2009, was listed in 2011, and has since expanded into markets in the Caribbean. Proven Group, which was formerly known as Proven Investments Limited prior to its renaming in 2022, is in the business of financial services, real estate and manufacturing..

Heaven’s remit starts February 1, 2025, when co-founder and current CEO Christopher Williams retires on January 31. Since PML acts as the management firm for the group’s assets, there is no CEO position for Proven Group, which operates as a holding company for the assets, Heaven explained.

As successor, Heaven will focus on growing profit in a market slightly hungrier for risk, amid a turn in interest rates towards a slow fall.

Williams, known for his charisma, has grown the company’s assets to US$1.1 billion over the past 14 years. Heaven, also a co-founder and PML’s current deputy CEO and director, has played a quieter, more analytical role, structuring deals behind the scenes.

“Proven needs a steady ship, with analytical smarts to take what we have built and make it extremely profitable,” said Heaven. “Chris did a superb job. Now, the focus is to get that return up to earning US$20 million in profit after tax.”

Hitting that target will require nearly doubling Proven Group’s current profit performance, which at year ending March 2024 amounted to US$12.3 million.

‘Not going to be easy’

While acknowledging the challenge ahead, Heaven remained optimistic.

“It is not going to be easy, but it is doable,” he said, pointing to the falling interest rates, which will lower the cost of funding.

Treasury bill rates — the floor generally used for the pricing of risk and debt — are trending down, and, after nearly two years, the central bank moved off its holding pattern on rates to execute a 25-basis-point cut in August and another 25-basis-point cut on Monday, carving the policy rate down to 6.5 per cent.

Proven Group’s balance sheet presents both opportunities and challenges. The company has the leverage to raise funds for acquisitions, but operates on a relatively thin capital buffer, with $9 in liabilities for every $10 in assets. Moreover, the US$156 million in cash on its balance sheet is reserved for bank depositors, limiting its use for acquisitions.

“On the consolidated basis, when you bring in the banks and wealth management balance sheet, those entities are properly capitalised. And from a group perspective, we believe we are properly capitalised,” Heaven rebutted.

Years ago, Williams hinted that the group was positioning itself for a potential acquisition, possibly by a major regional player or a Wall Street hedge fund. In fact, he once showed this reporter, on assignment, a bottle of champagne kept in his office, reserved for that very occasion — or perhaps as motivation.

“Back then, we were more of a private equity firm. Now, we are operating as a financial conglomerate. While we remain attractive for takeovers, our focus is on growing the business we already have,” Heaven said.

With the evolution of Proven Group from an investment management company into a conglomerate, the chief executives of the various subsidiaries will report to their respective boards, but will also be answerable to Heaven as CEO under a “dotted line” structure, Proven said in its statement regarding the succession.

Williams will remain an active director of PML after retiring from his operational role. He owns 1.7 per cent of the group. Comparatively, the largest single shareholder, Fides Investment Limited, holds about 5.3 per cent.

Heaven’s transition to CEO comes at a time when the group is addressing suboptimal financial results caused by global inflation and relatively high interest rates. Its first quarter for June 2024 concluded with a loss of US$1.8 million, compared to profit of US$3.8 million a year earlier.

However, with the reduction of interest rates by both the Bank of Jamaica and the United States Federal Reserve, Proven expects to deliver improved financial performance and returns to shareholders.

“It is looking good,” Heaven said confidently of the group’s ability to recover.

steven.jackson@gleanerjm.com