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Barita to continue as financial game-changer

— says new locations are coming in the next financial year

Observer business writer

Wednesday, July 08, 2020

Following a good 2019 financial year, Barita Investments says it will continue to engage bold, smart, game-changing financial strategies aimed at pushing the company towards greater transformational growth.

The investment firm, which in its first year after being acquired by parent company— Cornerstone Investment Holding Limited, recorded its highest profit in the company's history. Cornerstone is a private holding company holding approximately about 79 per cent of ownership.

Speaking in a live stream of the company's annual general meeting (AGM) on Monday, July 6, Ramon Small-Ferguson, vice-president of asset management and research, said that the year's after-tax net profits amounted to $1.7 billion, representing a 371 per cent increase in comparison to the 2018 financial year.

“We have seen a record-breaking performance across several different measures of financial performance, least of which is the record profitability that we were able to generate in the last financial year. Total operating revenue actually rose by over 200 per cent year over the 2019 financial year. This was complemented by an improvement in efficiency. Not only were we able to generate a significant increase in revenue but we were also able to convert more of every dollar of that revenue to the benefit of our shareholders at the bottom line,” he stated.

He added that the over $9 billion additional capital raised from two oversubscribed rights issue and a $1 billion issuance of non-redeemable cumulative preference shares also assisted the company in increasing its capital base by almost 350 per cent or $13.7 billion in total equity for the year when compared to the $3.1 billion seen in the previous year.

After being named the best performing stock on the Jamaica Stock Exchange (JSE) in 2018, closing at a share price of $53.7, the Barita stock further rose by 62.6 per cent to close at $86.46 with earnings per share of $2.42 during the year.


Game-changing six-month period despite COVID-19

“In our performance to date, we have continued to change the game during this financial year. We have again seen record-breaking performance for the first six months of the year to March where we recorded net profits of just over $1 billion versus [some] $500 million for the similar period in 2019,” Small-Ferguson said in presenting an unaudited report of the six-month period for this year.

During this six-month period total operating income also increased by 95 per cent to $2.3 billion, $14.4 billion in total equity, $49 billion in total assets and approximately 20 per cent in return on equity.

“Post-acquisition we have been very conservative with how we have managed the resources that the shareholders have entrusted us with. Consequently, heading into the pandemic we conservatively positioned as far as being invested goes and that really showed in our March numbers. We were very strong with respect to our cash position— cash and near cash stood at nearly over $17 billion as at March, which was about a third of our balance sheet,” the vice-president said while noting that this effective management of finances and securing liquidity augured well for the company and its shareholders amid the turmoil of the pandemic.


Future Plans

Paula Barclay, general manager at Barita, also underscored that the company has been managing the COVID-19 pandemic quite well. She noted that the capital raised over the last year will be central to the company's performance and growth plans for the years ahead.

“In the next financial year, we intend to open at least two new locations. We will be on Knutsford Boulevard in New Kingston and we will have an additional location in Montego Bay. These locations will be smart and have a lot of electronic interaction,” she stated.

Touting the need for more digital engagement, Barclay said that technology will be integral to future operation and upcoming initiatives.