VMIL and MIL Report Varying Six Months’ Results

• Mayberry Investments Limited (MIL) and Victoria Mutual Investments Limited (VMIL), both reported improvements in their financial performances for the 6 months ended June 2022. Net profit improved for Q2 for both companies but VMIL saw a decline in its YTD performance owing to the very low net profit recorded in Q1.
• MIL and VMIL recorded net profit attributable to shareholders of J$3.21Bn (EPS $2.67) and J$250.71Mn (EPS$0.17), respectively, for the six months ending June 30, 2022. These were 101.6% and 5.2% above and below, respectively, the outturns in 2021.
• MIL’s H1 result was driven by a 280.2% increase in net unrealized gains on investments from the Group’s investment in associates and financial instruments, reflecting capital appreciation on equities. The overall decline in VMIL’s bottom line was tempered by an 86.1% increase in income from net fees and commissions. This was attributable to the strong execution of both debt and equity-related transactions in the review period.
• Both MIL (25.7%) and VMIL (31.4%) saw double-digit increases in interest income. The improvement in interest income for MIL outpaced the noticeable increase in interest expense which jumped by 22.9% evidenced by a higher net interest margin (moved from 30.4% to 31.9%). VMIL, on the other hand, saw a 61.9% increase in interest expense which lowered its net interest margin (moved from 35.8% to 20.9%). Operating expenses also increased by 60.6% and 20.0% for MIL and VMIL, respectively.
• The investment companies will look to build on their Q2 performances in the recovering economy; however, the high inflationary environment will continue to pose challenges. MIL expects the strong performance of stocks in its portfolio to be sustained through capital appreciation and dividend income. Revenues could also be driven by higher net fees and commission income which grew by 15.9% in H1 due to significant growth in equity commission and loan processing fees, as well as higher selling fees for IPO transactions.
• Partnerships formed and investments made by VMIL in Q2 should help to influence improvements in profitability in coming months. This includes its private equity investment in Home Choice Enterprise Limited during Q2, as well as its partnership with London-based Actus Partners (Actus) to successfully close a new Caribbean private equity fund focused on Small and Medium Enterprises (SMEs). Carilend Caribbean Holdings Company Limited, (Carilend), a leading Caribbean fintech in which VMIL acquired a 30% stake in 2019, has also partnered with Massy Finance to offer 100% web-based personal loans in Trinidad and Tobago. These partnerships and investments are expected to boost profits in the coming quarters.
• MIL’s stock price has increased by 23.7% since the start of the calendar year while VMIL has decreased by 15.5%. MIL and VMIL closed Tuesday's trading session at $9.71 and $5.18, respectively. MIL currently trades below the Main Market Financial Sector Average of 10.7x at a P/E of 3.2x while VMIL trades above at 14.0x.

(Sources: JSE & NCBCM Research)