Businessuite markets july 2016

1 Businessuite Markets March 2016


ContentBUSINESSUITE EVENTS CALENDAR

EDITORIALTaking Business Advice From A Patty Shop

COMMENTARYStrategic Selling

5 Techniques Companies Can Use to Win at the Customer Experience

TECHNOLOGYJamaica Stock Exchange Launches Mobile App

COVER FEATURE Battle of the Brands: Mark Harts Caribbean Producers Anticipates Profits for 2015/ 2016 FY Despite Battle With Unregulated Competitors

STOCK MARKET FOCUSIs Listing On The JSE Really The Best Choice For Small Businesses?

COMPANY REPORTSMichael Lee Chin’s Portland JSX Lists On Main Market of the JSE

REGIONALRegional Heads Of Government To Take On Correspondent Banking Crisis At Global Conference

JetBlue Increases Flights To Barbados

Potential Theme Park Investor Wants ‘Special Incentives’ From Barbados Government

3

3

4

5

6

9

9

10

Content DirectorKayla [email protected] Businessuite News Centre BNC

Publisher and Editor in ChiefAldo [email protected]

Subscription and [email protected]

Advertising [email protected]

Graphic Design and Layout Bonito [email protected]

Photo credits Sourced from the internet and contributed

Social MediaCLICK Digital Agency

Businessuite MarketsBusinessuite Markets provides both the inexperienced and seasoned investor with a central point for information and intelligence on where, what and how to find the best investment opportunities and ways to invest to achieve their financial goals. It’s current and forward looking, informative and incisive. A must read especially for inexperienced investors.

Businessuite Online, Businessuite Digital, Businessuite Magazine, Businessuite Today, Businessuite Minute and Businessuite News Channel are owned and operated by Blackslate Media Group.Info: 876-631-4505 (o) or 876-280-9192 (m) 876-458-3253 (Mobile)

PUBLISHERSBusinessuite News Centre BNC A division of the Blackslate Media Group“Silicon Mountain” Mandeville JamaicaFor all information 876-630-2216 (Kingston Office)876- 342-9332 (Mobile)876-630-2216 (Mandeville Office)876-542-3719 (Mobile)[email protected]@blackslateholdings.comOR email [email protected]

Corporate InformationBlackslate Media Group Ltd, “Silicon Mountain” Mandeville Jamaica876-631-5418 (Kingston Office)876-458-3253 (Mobile)876-631-4505 (Mandeville Office)876-280-9192 (Mobile)To learn more about Blackslate go [email protected]

ISBN NumberISSN 0799-4427

CREDITS


July 11 GraceKennedy Limited EGMVenue: GraceKennedy Headquarters

Hardware & Lumber Ltd AGMVenue: Hardware & Lumber Head Office

Seprod Limited AGMVenue: Knutsford Court Hotel

July 12PSOJ/ JMMB Annual Economic Forum - Developing Beyond the IMFVenue: Jamaica Pegasus Hotel

July 13Eppley Limited AGMVenue: 58 Half Way Tree Road

July 14Choices Career and Education Advice ‘Creating a Generation Focused on Success” WorkshopVenue: Medallion Hall Hotel

July 15The Jamaican Bar Association - Annual BanquetVenue: Jamaica Pegasus Hotel Ballroom

Businessuite Events CalendarJuly 2016

EDITORIAL

Taking Business Advice From A Patty Shop

Jim is at work idling on facebook when Mr Hall walks by. All of a sudden she witches the screen to show the company accounts spread sheet he should be presenting later that day. ‘Yuh think a patty shop mi a run?’ Mr Hall calls out, “I saw that.”

The concept of ‘running a patty shop’ in Jamaica has always been one laced with negativity and representative of an office/ business run inefficiently, with inefficient staff. But let’s be real….how many of us that have used this phrase have really paid attention to how a patty shop is actually run?

In a recent conversation with a close friend of mine, she said one of the things that she learned from her time working at a

By Kayla Wright

local patty shop is the concept of order. She says simply put, each worker is given a set task and are either rewarded or penalized depending on how the work is completed. Basically, she says in a patty shop, the concepts of accountability and positive work ethic are key.

As a small business, your success will be based on the effectiveness of your employees and their whole attitude towards work. Like the owners of a patty shop, remember that employee teamwork plays an important role in effectively run businesses. Establish clear goals for employees, permit informality to encourage spontaneous, creative thinking and solutions and encourage participation.

As a small business, your success will be based on the effectiveness of your employees and their whole attitude towards work


One of the big mistakes by some entrepreneurs is to treat the sales function at the start of their business as if the business is established and settled. Established and settled here to mean that the company, brands and products are well known and are competitive at the existing prices and quality. To the contrary, a new business is for the most part an unsettled one that is seeking to establish itself in a position from which it can grow and prosper.

Given that the new business is now up and ready to go. Products are in stock, distribution channels identified, advertising campaigned activated and a sales team engaged. Getting the distribution channels to buy and stock the products or in the case of direct sales, to get end users to buy is where

the ‘rubber hits the road’. This is a most critical stage of the business and yet success comes down to the ultimate effectiveness of the selling function.

Except for the most extraordinary innovations, there will be competing products to the ones you are introducing that exist in the market. You will therefore be faced with the challenge of getting current users of those products to switch to yours or at least share their purchases to include yours. A confronting issue has to do with fact that switching to a new product poses a real risk to customers. This is especially so if they have had good experience with the products they are presently using.

It is the perceived risk of switching to a new and untried product that presents

COMMENTARY

Strategic SellingBy Ronald Sutherland

the greatest challenge to your sales team. To overcome this challenge, the sales team will encounter two undesirables. Firstly, they must spend more time and effort to convince the reluctant customer that the new product is worth the risk and secondly, they will need to sell at relatively low introductory prices at lower margins. Both events are expected to have a negative impact on their sales commission.

If your sales team is selling a mix of old and new products the situation faced by the company becomes obvious.

To continue reading this article, visit us online at Businessuiteonline.com

By Yanique GrantCustomer Service Strategist

Social Customer Service is a real phenomenon and it surely is not something any organization should take lightly. Customers in the 21st century are super-informed and possibly suffer from information over-dose. The customer experience is no longer driven by the company but by the customer.

A lot can be misconstrued through the written word, so it’s essential that brands use a variety of ways to ensure that the customer experience is always a great one. Bricks-and-mortar shops can turn customers into

lifelong brand advocates with their in-store service. Ideally, all online companies should offer great customer service 100% of the time, but sadly we know this isn’t always true. Here are five ways online companies can provide the best possible customer experience every single time.

1. Be Available - your social presence is like having an actual store that has a sign hanging that says “Come In, We’re Open” – therefore, you must provide a framework where no matter what time of the day, what day of the week and what holiday –

some mechanism has been installed in order to facilitate prompt feedback to the customer! Should consumers need to get in touch with a company, it is vital they are easily contactable with clear contact details such as phone number, address or email address available on their site.

2. Keep Customers Updated – It is critical for you to “Keep your hand on the horse” which is a saying we use when we have workshops which basically means that when you are doing business with a company it is similar to

5 Techniques Companies Can Use to Win at the Customer Experience

brushing a horse – you keep one hand on the horse so he always knows where you are and does not get skittish and kick you – when your customer does not feel kept in touch with – they become irate and start complaining and this is because they do not feel in constant contact with your people and your company. A consumer will always appreciate being kept in the loop, so keeping customers updated on your brand is a necessity.

To continue reading this article, visit us online at Businessuiteonline.com


TECHNOLOGY

Jamaica Stock Exchange (JSE) Launches Mobile AppGeneral Manager of the Jamaica Stock Exchange (JSE) Marlene Street Forrest says she expects the newly launched JSE Mobile App will be a useful tool in market access and decision making since the average investor will be in a better position to be a part of a key sector of Jamaica’s economy.

Speaking at the launch on July 5, she indicated that the mobile application, which took a year to develop, will ensure persons have up-to-date information at their fingertips. “It will also grow the

market. Currently, we have about five per cent of persons investing in the Stock Market and we want to grow that to 15 per cent by 2020,” she said.

The new application is available to Android and Apple mobile users in their respective online stores free. It features the latest market and company news, market statistics, live ticker during trading hours, summary during non-trading hours, latest trading day indices and instruments and index and price graphs over 30, 90 and 365 days.

“The app complements the other portals we currently used to provide information to you and we’re confident that it will drive the number of persons who are interested in the market and improve the timeliness and capacity of investors in their decision-making process,” said Street Forrest.

She says it will support “efforts at financial literacy and inclusion by bringing the information to the fingertips of all persons.”

“The app complements the other portals we currently used to provide information to you and we’re confident that it will drive the number of persons who are interested in the market and improve the

timeliness and capacity of investors in their decision-making process,”

Marlene Street Forrest


Cover FEATURE

‘…the presence of unregulated players in the market continues to create an unequitable environment for the company to compete against products of questionable origin and repute.’ That was the explanation given by Caribbean Producers Jamaica Limited (CPJ) to explain what will be a “likely impairment to their net profit in the financial year ended June 30, 2016”.

Despite this however, newly appointed CEO, Dr David Lowe says the company’s financials will not reflect a loss for the period under review. We are not going to make a loss or break even. It is not the end of the world…we are confident that the business model remains strong.”

Dr Lowe, who in June took over from Co-founder Thomas Tyler, indicated that the decision to inform shareholders of the issues being faced by the company was

made because of a “moral obligation to our shareholders”. He says it however “raises the bar” for higher corporate governance and transparency. “We feel it was a prudent thing to do. It is not the norm in Jamaica, but we have an obligation to advise our shareholders.” He says the company further thought it of importance to warn the market that CPJ was engaged in realigning its business model. “It will be a one- off provision which will not change our core business.”

However, the CEO says the company’s earnings are expected to be impacted both by the compounding effect of new costs attributed to expansion and the impact of unregulated competitors who appear to be bringing in and selling uncustomed goods, effectively undercutting price.

In a release to the JSE on July 4, 2016, Co Chairman Mark Hart indicated that Caribbean Producers Jamaica Limited (CPJ) was concerned with the impact of unregulated players in the market and after a review of the implications for CPJ’s business model, took the decision to ‘write-down inventory that has become aged or obsolete that cannot be competitive against unregulated players; and increase tax provision in anticipation of realignment changes to CPJ’s business model’. The release continued, “CPJ views these issues as material primarily for the Fiscal year ended June 2016 and anticipates the authorities will aggressively target the unregulated players”.

In the first day following the announcement, CPJ dropped 14.5 per cent in trading on the Jamaica Stock Exchange (JSE).

Battle of the Brands:

Mark Harts Caribbean Producers Anticipates Profits For 2015/ 2016 FY Despite Battle With Unregulated Competitors


Auditors are determining the value of the possible impairment and, as such, the figure remains undisclosed to date, however, for the nine months ended March 31, 2016, CPJ reported net profit of US$2.3 million, down four per cent from the US$2.4 million earned during the 2015 financial year. Meanwhile, revenues rose US$4.79 million or 7.4 per cent to US$69.79 million, year over year.

For that period, CPJ said growth was due to increases in sales of seafoods, spirits and beverages year over year.

For the six-month period to December, revenue reflected 8.5 per cent growth to US$45.41 million. Net profit for the company jumped 73 per cent to US$1.76 million for the six-month period, compared to US$1.01 million earned at December 2014.

Dealing with Unregulated CompetitorsDr Lowe says while CPJ is not averse to competition, he does not believe

“They are not playing by the rules. We welcome competition, but it cannot be that we are getting competition from such sources”.

Dr Lowe

that the competition should come from an unregulated source. “They are not playing by the rules. We welcome competition, but it cannot be that we are getting competition from such sources”. He says the government must make haste to address this issue as it will eventually stun the growth and profits of other, smaller, regulated businesses. “…it is a problem which needs to be addressed with urgency as the government itself will lose revenue both from the ports and from taxes. They will cannibalise smaller companies which employ people and stunt their growth”.

The CEO says he is further concerned with the health and safety issues raised by these unregulated players in the market. “We are not only concerned about profit. We are concerned about food safety and consumer safety”. With CPJ having established itself as the ‘largest purveyor of food and beverage to the local hospitality sector’, Dr Lowe says these unregulated competitors are not playing by the rules.

Realigning the Business ModelDr Lowe says going forward however, the company will switch its focus from competing against these unregulated players and instead focus on “leveraging core business lines for growth in the tourism sector, retail and offshore.’ He says as CPJ continues to experience rapid growth in these areas. He says until the issue of these unregulated competitors is solved, the company will remain cautious in this regard.

For the new fiscal year, Dr Lowe says CPJ “will concentrate on rationalizing non-core businesses and a realignment to address the year-on-year increase in costs associated with rapid growth and new investments while focusing on protecting their profitable lines of businesses”.

the company will switch its focus from competing against these unregulated players and instead focus on “leveraging core business lines for growth in the tourism sector, retail and offshore.’

David Lowe - CEO of CPJ


COMPANY REPORTSMichael Lee Chin’s Portland JSX Lists OnMain Market of the JSE

Michael Lee Chin’s Portland JSX (PJX) listed on the Main Market of the Jamaica Stock Market (JSE) last week, making it the eleventh securities to list on the market since the start of the year.

550 applicants last month bought into the idea of investing with one of the richest men in the world resulting in 23.5% oversupscription of PJX’s IPO.

The IPO which ran from June 8 to June 22 represented the largest IPO of Ordinary Shares ever on the Jamaica Stock Exchange with funds raised exceeding the initial target of J$1.23 billion by $290 million closing at approximately J$1.52 billion.

The company had gone to market with a total of 111,818,182 ordinary shares priced at J$11.00 each.

On its first day of training on the Market, PJX gained 14 per cent with its stock closing at $12.54.

According to Managing Partner and Member of the Investment Committee, Robert Almeida, the IPO provided an exposure that is new to the Jamaican market place, as investors were able to diversify their investment portfolio across country, sector and currency.

Proceeds from the IPO will be invested

in Portland Caribbean Fund II. This is a private equity fund, which holds a portfolio of equity and/or debt securities of companies located in Latin America and the Caribbean.

Almeida says so far, PCF II has made investments in three companies with several deals in the pipeline across multiple sectors. The Fund has investments in Panama Wind, a wind energy project in Panama; CFFI Ventures (Barbados) Inc (“CVBI”), an opportunity which resulted from the Cable & Wireless and Columbus Communications merger; and Clarien Group Limited (“CGL”) – the parent company of Clarien Bank Ltd (“CBL”) – a leading bank in Bermuda.

PJX Managing Partner, Robert Almeida inserts his company’s strip on the Main Market board of the Jamaica Stock Exchange ( JSE) on Wednesday July 6

STOCK MARKET FOCUSIs Listing On The JSE Really The Best Choice For Small Businesses?

A study conducted by researchers of the Mona School of Business and Management (MSBM) has positively indicated that the decision by small and medium sized businesses to list on the Junior Market of the Jamaica Stock Exchange is in fact a ‘good bet’.

difference in the financial performance before IPO compared to performance after this event. They also wanted to see if there was likely to be negative relationship between a change in debt levels and a change in profitability.

The research found that SMEs reduce debt and increase profitability following IPO on the Junior Market. Speaking at the most recent MSBM Round Table, they indicated that the results of the study also contradict the long held assertion that a firm’s proportion of debt relative to equity is irrelevant in an environment free from income tax, such as the Junior Market.

According to Lawrence and Logan, public equity by way of IPO is crucial when firm’s goal is growth and not lowest cost of capital. They say the main implication of the findings then, is that SMEs can use the Junior Market as a channel to increase profitability while reducing financial risk.

JSE General Manager, Marlene Street Forrest, speaking at the MSBM 7th Round Table CEO Breakfast Forum recently

The research which was carried out by Director of the Professional Services Unit at Mona School of Business and Management (MSBM) , Dr. William Lawrence and Lecturer in Finance (MSBM), Dr. Twila-Mae Logan on 19 of the 30 plus companies listed on the junior market found that SMEs can transform their financial performance by listing on the stock exchange.

The study tracked the performance of SMEs two years before and two years after their Initial Public Offering (IPO), using their return on assets and debt equity ratio as two important variables. Based on these requirements, the size of the study was reduced as some companies were in existence less than two years before launching their IPOs while for others, it has been less than two years since their IPOs were launched.

Doctors Logan and Lawrence had intended to determine if there was a significant


JetBlue Increases Flights To Barbados

JetBlue has introduced additional flights to Barbados from a second Tri-State area gateway. According to a release from JetBlue, a once weekly Saturday service will operate between New Jersey’s Newark Liberty International Airport (EWR) and Barbados’ Grantley Adams International Airport (BGI) during the peak holiday travel period from November 19, 2016 through January 7, 2017, subject to receipt of government operating authority.

Vice President Of Network Planning at

Jetblue, Dave Clark says the move was made because of the performance of Barbados as a destination. “Barbados continues to be one of JetBlue’s best performing destinations and we know our New York customers will love having even more choices to select from when they book their holiday travel this year,.”He says demand to and from Barbados was particularly strong over the holidays, adding “we are pleased to offer more seats and more choices to serve this peak holiday demand”.

JetBlue first launched service to Barbados in 2009 and currently offers nonstop service from its New York-JFK, Boston and Fort Lauderdale-Hollywood focus cities. Additionally, JetBlue’s Mint experience is available on select New York-JFK and Boston flights. Newark will become JetBlue’s fourth US gateway to Barbados.

JetBlue will serve the new route with its 150-seat Airbus A320 aircraft.

that assessed the de-risking scenario,”it is unfair and the predictions about its impact on the region are dire, and the call to action is extremely urgent”. The statement continued, “Regional banking institutions rely on such relationships in order to allow residents to conduct international financial transactions. The issue has been occupying the attention of regional policymakers, following signals by international banks that they are unwilling to continue carrying the business of regional banks,” the statement said.

It says at least eight financial institutions in Barbados, seven in Jamaica and five in Belize and others in Antigua and Barbuda, Montserrat and other member states have been affected by a termination or restriction of correspondent banking relationships.

regionalRegional Heads Of Government To Take On Correspondent Banking Crisis At Global Conference

Regional Heads of Government have indicated their intention to address the ‘Corresponding Banking Crisis’ affecting the Caribbean at a global conference set for the ‘not too distant future’.

The move comes as regional countries warn that corresponding banks, which enable the provision of domestic and cross-border payments and terminated in some jurisdictions, could adversely affect their economic development and

have been making representations to countries such as the United States in a bid to reverse the trend.

CARICOM Leader and Prime Minister of Antigua & Barbuda Gaston Browne, has been tasked with adressing the fallout and repair of correspondent banking relationships at this conference. He says his committee will be recommending to regional leaders at their annual summit that ended Wednesday in Georgetown the staging “of a global stakeholder conference” to bring all the players together.

He says the committee will also be looking at the possibility of engaging different advocacy groups in the United States and Britain to ensure the message is shared effectively.

According to a CARICOM Secretariat statement, issued ahead of the summit,


US based business consultant David Muddiman wants the government of Barbados to either offer him ‘special incentives’ or work in a private/ public sector partnership towards the development of a major multi-million dollar theme park in the Caribbean country.

Muddiman says while he is not yet in a position to give details, if such a development is to take place on the island it would benefit the job market and the tourism industry. “The only thing I can share is that this would be a tremendous impact for the job market as well as the tourism dollars which will be brought in. It will be strategic for all parties concerned,” said Muddiman.

The business consultant says what he needs is for the governing body to invest a minimal amount of dollars “for me to market this and proceed with bringing the “right” people to the discussion table”.

“Like every large scale project there will be some bumps and changes along the way. What would be needed would be for the Government to realize that they will have to give some ‘special incentives’ for such a large investment,” he said.

Muddiman says he is hopeful that “the Government will be willing to spend some money to help this along”. “There is a tremendous amount of due diligence to first see if there will be reasonable return on investment from the project. I am trying to bring these parties together for the development along,” he said.

Potential Theme Park Investor Wants ‘Special Incentives’ From Barbados Government

Businessuite markets july 2016

Documents

Transcript of Businessuite markets july 2016