Andrew Green, Acting Financial Editor
Christopher Berry (seated) Mayberry Investments chairman and Gary Peart, the company's chief executive officer.
TOUGH CONDITIONS on the stock market have resulted in a "very challenging" third quarter for Mayberry Investments, chairman Christopher Berry told The Gleaner yesterday.
Realised revenue (fees, dividend, gains from securities trading, net interest income and other income) for the quarter was $168 million compared to $48 million for the prior year, an increase of 250 per cent, his report to shareholders issued yesterday stated. This was offset by unrealised 'mark to market' losses of $242 million, which is based on the impact of the overall stock market decline on the attributed value of the company's own substantial investments in the market.
LOSS
The company made a loss of $118.5 million for the quarter ended September 30, 2005, compared with a profit of $140.9 million for similar quarter last year.
"Our realised revenues are actually growing," Mr. Berry said. "The main problem is the mark to market securities."
During the third quarter, the All Jamaica Stock Exchange (JSE) index declined by 12 per cent. The year to date total decline to September 30 is 13 per cent, so most of the fall actually took place in the last quarter.
Despite the fall off in all the indices, Mayberry has a favourable outlook for JSE listed companies held in its portfolio, Mr. Berry said. The company has significant holdings in Lascelles DeMercado & Company, Cable & Wireless, National Commercial Bank, Desnoes & Geddes and Capital & Credit Merchant Bank, Pan Caribbean Financial Services, Life of Jamaica, Jamaica Producers Group and The Gleaner Company.
"We have always invested a good part of our equity in the market," Mr. Berry said. "We are sure it will come back so we are not going to abandon the market at this time."
OPERATING REVENUES
The year to date net interest income and other operating revenues stood at $374 million compared to $600 million for the same period last year, a decrease of $226 million or 37.7 per cent.
"We will also be marketing our trading platform to other dealers who want to buy and sell stocks," he said. This should bring significant new business for the stock broking operations.
Outside of the stock market investments, "we are also expanding our other lines of business in terms of selling products for third parties," Mr. Berry said. The company will sell the products such as the mutual funds of other companies.
Net profit year to date was $117 million compared to $325 million for the corresponding period in September 2004. This was due primarily to a negative movement in the unrealised losses of $325 million year over year, which was partially offset by $99 million increase in realised revenue.
Administrative expenses at September 30, 2005 stood at $341 million compared to $238 million for the similar period for 2004. This was due to an increase in the staff complement and other overhead expenses. The staff count climbed from 69 in 2004 to 106 currently.
The results include a $20 million write-off of Dyoll group shares. The shares began trading subsequent to September 30, and the relevant adjustments will be made in the fourth quarter results.
"Going forward, we have to focus on building our retail base of business and keeping costs as tight as we can," Mr. Berry said. "Mayberry has been through tough markets before and we have full confidence that the market will do well going forward. It is just a cycle we are going through now."
