Gleaner improves half-year profit; process to merge media business with RJR underway

The Gleaner Company Limited managed to grow its half-year profit, from core operations, by 14 per cent, to approximately $74 million, when compared with the same period in 2014, despite a five per cent decline in revenue.

After finance costs and taxes, the group posted a net profit of $103 million, 143 per cent better than prior half-year results.

Other operating income of $50 million, arising from foreign exchange gains on the group's investments, as well as lower expenses, contributed to improved performance.

The group managed to keep its cost of sales flat, and achieved a $58 million, seven per cent, reduction in operating expenses, to soften the effect of lower sales.

The company generated $1.61 billion in revenue, roughly $80 million less than that recorded for the prior year's first six months.

Results for the period also included a $51 million share of profit, recognised as part of the group's 50 per cent interest in an associated company, Jamaica Joint Venture Investment Company Limited. The Gleaner Company increased its shareholding in the real estate associate from one-third to one-half in January of this year.

The company, which this month announced it would combine its media operations with those of Radio Jamaica Limited, maintains a strong balance sheet.

At the end of June, shareholders' equity was approximately $2.8 billion, 72 per cent of total assets of $3.8 billion, which represented a seven per cent, $176 million, increase over the comparative period in 2014. The company also has negligible debt and a substantial portion of liquid assets.

The proposed merger of the media operations of The Gleaner Company Limited and Radio Jamaica Limited is to be pursued through a court-approved scheme of amalgamation which is expected to take four to six months, from announcement, to close. This process will require prior approvals of shareholders of the two entities and will see The Gleaner Company reorganising its media operations under one subsidiary company, Gleaner Company (Media) Limited (GCML), which will be acquired by the publicly traded Radio Jamaica Limited.

Shareholders of The Gleaner Company Limited will receive one Radio Jamaica Limited share for each Gleaner Company share owned. The still publicly traded Gleaner Company Limited, which retains its non-media operations, will undergo a name change to avoid future confusion with the media brand GCML, which will now be operated by the merged group.

Managing Director Christopher Barnes, commenting on the proposed merger, said: "With the current economic climate and all the media activity taking place around us, this deal is the best possible direction for both companies to take, on behalf of our respective shareholders, and also for preserving the independence of media in Jamaica. The merged company will have greater financial stability, be better poised to offer higher-quality products and services, and capitalise on all available media opportunities, both locally and overseas."

The company has provided a link on its websites (http://jamaica-gleaner.com/rjrgleanermerger) and has also established a dedicated email account (rjrgleaner@gleanerjm.com) for persons seeking additional information on the transaction. Shares in the company almost doubled in price to close at $2.51 per share, a week after the August 5 merger announcement was made.