Ashford W. Meikle, Staff Reporter
Mayberry headquarters building on Oxford Road, New Kingston. - WINSTON SILL/FREELANCE PHOTOGRAPHER
MAJOR INVESTMENT and stock brokerage company, Mayberry Investments Limited, has returned a declining performance in its second quarter to June 30, 2005.
Based on its recently released interim results, Mayberry's revenue from its core operations - interest income - fell by 21 per cent for the quarter compared to the same period last year.
DECLINING REVENUE
Revenue dipped by $120 million to $454 million during the quarter while net profit declined by 19 per cent, to $78 million.
Year-to-date revenue from core operations declined by 32 per cent although there was a 28 per cent increase in its net profit for the same period.
The declining performance of the quarter follows a similar trend in the first quarter which saw a 46 per cent drop in interest income.
Predictably, with the decline in core revenues and little change in interest expenses, net interest income dropped to $43 million, a 55 per cent decline.
Overall, there was a fluctuating trend among the company's other sources of income. For example, there was a 75 per cent increase in fees, which went up to $42 million.
At the same time, there was a 13 per cent decline in the sale of investments, which fell to $65 million, while investment revaluation increased to $34 million.
Dividend income shot up to $10 million compared to the negligible $413,000 of the comparable period a result of increased income from additional investments.
Overall though, there was a 46 per cent increase in net interest income and other operating revenue, which climbed to $193 million, compared to the $132 million in the second quarter last year. Administrative expenses registered a 44 per cent increase, totalling $112 million principally as a result of the additional staff hired by the company.
SHRINKING SPREADSm
Like the rest of its peers, Mayberry's core earnings declined as a result of the shrinking spreads caused by the lowering of interest rates by the Bank of Jamaica (BoJ) and increased competition from other financial institutions which target high net worth individuals.
Since margins are tightening, the company will have to grow its income through other sources, notably management fees.
Since it went public three months ago, there has been volatility and heavy fluctuation in the company's stock price, which two weeks ago plunged to $4.20, shedding some 20 per cent of its IPO price.
Its earnings per share for the second quarter stood at seven cents compared to eleven cents last year.
The Jamaica Stock Exchange has experienced a four per cent year to date decline.
Against this background, the Mayberry Managed Equity Portfolio (MMEP) has seen growth of seven per cent since the start of the year.
