MJE Reports Net Profit in Q1 2021, Due to Improved Conditions on the Stock Market
- For the first quarter ending March 31, 2021, Mayberry Jamaican Equities Limited (MJE) saw a significant improvement in its operating performance with the company recording a net profit of $299.71Mn (EPS $0.25) relative to a net loss of $1.13Bn (EPS: -$0.93) in Q1 2020.
- Unrealized gain of $281.61Mn on its investments relative to a loss of $1.12Bn in the prior year, along with a $110.28Mn increase in dividend income to $118.75Mn were behind the improvement. The increases in unrealized gains and dividend income are likely a reflection of the improvement in the performance of the local stock market during Q1 2021 (+0.7%), when compared to the steep fall-off seen in 2020 (-26.0%) as a result of the COVID-19 induced sell-down.
- The stock market is expected to fare better in 2021 aided by the economic rebound during the second half of the year, as major economies continue to recover, and as the government continues the rollout of the COVID-19 vaccine and relaxes restrictions. This should support domestic consumption and production, which bodes well for a recovery in corporate earnings and investor confidence.
- Nevertheless, we believe there is a concentration risk to the performance of MJE’s portfolio with a 46.9% exposure to Supreme Ventures. SVL's earnings could come under pressure, given the emergence of competitors in the lottery business.
- MJE’s stock price has appreciated by 1.7% since the start of the year and currently trades at $8.12 per share. This is 26.6% below the last reported net asset value per share (NAVPS) of $10.28.
(Source: MJE Financials)