Businessuite weekly september 7,2015

1 Businessuite Weekly




Cover Story

Mergers and Acquisitions

Manufacturing

Telecommunication

Company Reports

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Contents

What,s in a name: LIME goes with the FLOW

Finally, a brand it intends to stick with. Cable and Wireless has finally found a name it can call home and a brand that it expects will not be marred by what Jamaicans remember as deplorable service. Cable and Wireless, bMobile, LIME has finally gone with the Flow.

Your Move part 2: A Merger Of CVM, The Observer And Grove Broadcasting?

The only move left for Gordon 'Butch' Stewart, now is for him to finally make a business decision regarding the future of the Jamaica Observer.

MSMEs To Benefit From Latest Agreement Between Manufacturers Association And The Bureau Of Standards Micro Small and Medium-sized Enterprises (MSMEs) who are members of the Jamaica Manufacturing Association ( JMA) are set to...

Consumers To See First-Hand The Combined Strength Of The New FLOW

Managing Director Gary Sinclair speaking at the recent launch of the rebranded telecommunications provider, said Flow Jamaica...

D&G Making Strides To Becoming Largest And Most Respected Total Beverage Alcoholic Company In Jamaica

Boasting a 14% increase in revenues for the twelve month period ended June 30, Desnoes & Geddes Limited, believes it is a validation of the strength...


Regional

The Week Ahead

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Contents

Anya Schnoor Led ScotiaBank Trinidad Records TT$417m

Port of Spain- Scotiabank Trinidad and Tobago Ltd has reported net income of TT417 million for the nine months ended July 31. This represents a ...

CIBC First Caribbean Records Highest Quarterly Net Income Since Second Quarter Of Fiscal Year 2010 Barbados- CIBC First Caribbean has recorded its highest quarterly net income since the second quarter of fiscal year 2010, improving its ...

Apple Launch Event This Wednesday, September 9

Apple watchers and supporters will get some satisfaction this week as Apple prepares for its September 9 launch event. Every eye will be...

Businessuite Event Calendar

Content DirectorKayla Wright

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Commentary

19 Mark,s Laas Lick: Scammers are always on the hunt

It was the summer of 2008 and the location was China at the Beijing National Stadium known as the Bird’s Nest...


Mergers and Acquisitions

The only move left for Gordon ‘Butch’ Stewart, now is for him to finally make a business decision regarding the future of the Jamaica Observer. Those are the words of renowned Psychologist, Dr. Leahcim Semaj.

According to the Jamaica Observer Chairman, the merger between the Gleaner and Radio Jamaica is a bold one ‘in a challenging environment, especially for print media.’ He says ‘the merger is admirable, notwithstanding the fact that we (the Observer and the Gleaner) are competitors. It will improve the ability of both companies to survive in an environment made even more difficult by the emergence of social media which, while not as credible as traditional media, enjoys popularity’.

While most believe that Stewart should merge with CVM TV, Dr. Semaj believes he should go one step further by also approaching the Grove Broadcasting Company which is inclusive of Zip 103FM and Irie FM. He says following the

Likely moves open to Butch Stewart and other media players following Gleaner/RJR merger:

Your Move part 2: A Merger Of CVM, The Observer And Grove Broadcasting?

the Jamaica Observer as a hobby and not an investmentrecent passing of Chairman, Founder and managing director, Karl Young four years ago and the death of his son and successor, Chad Young earlier this year, the company is now ripe for acquisition. The psychologist says a merger of CVM, the Observer and Grove Broadcasting would be the only acceptable response to the Gleaner/ RJR merger.

Content will be King However, as a silver lining, Dr. Semaj says Jamaican creative and creators of content can now expect to benefit. He says this opportunity comes against the background of what will be a need by the merged entities to display content. He says this is now the age when Content will be King.

Managing Director of Grace Kennedy Capital Management, Steven Whittingham expressed a similar view saying that his recent acquisition of the media rights for the next 15 years for all activities and sporting events associated with the Inter


Secondary Schools’ Sporting Association (ISSA) follows recent mergers and acquisitions in the Jamaican media space. He says this includes changes made between LIME and Columbus Communications, Digicel, SportsMax and Telstar, and RJR and the Gleaner. Whittingham says with bigger players in the market, it was logical to determine that content while already playing a major role, will be King. He says by obtaining all the media rights for the ISSA events, Grace Kennedy and ISSA will now hold that power.

Gleaner/RJR Merger Last month, the Gleaner Company Limited and Radio Jamaica announced their decision to join forces. Chairman of The Gleaner Company Oliver Clarke says the merger follows what he describes as unfavorable local economic conditions. He says independent news cannot be provided unless the move is viable. ‘What Jamaica faces is that there are a number of foreign companies coming in and putting up programmes that solicit advertising and you have a lot of businesses that are not making their way’.

The expanded entity will be led by J. A. Lester Spaulding CD as Chairman, with Oliver F. Clarke OJ as Deputy Chairman. There will be an initial fourteen member board represent-ed equally by seven directors from each of the existing companies. Gary Allen is to be CEO while Christopher Barnes will serve as COO.

...most believe that Stewart should merge with CVM TV, Dr. Semaj believes he should go one step further by also approaching the Grove Broadcasting Company which is inclusive of Zip 103FM and Irie FM.

According to both entities, the management structure will be set up to best cover the operational lines of the business as well as their associated administrative support needs. The CEO and COO will be responsible for selecting and implementing the most appropriate structures which will be announced in due course.

This transaction requires both shareholder and court approval as well as support from regulators including the Jamaica Stock Exchange and Broadcast Commission and is expected to take between 4 and 6 months to close.

Hobby or Investment? Dr. Semaj however is of the view that the Observer will continue to lose money, even more so now, following the recent mergers of LIME and Flow, and Digicel and SportsMax. According to Dr. Semaj, with LIME and Digicel having been two of the main suppliers of revenue, it is expected that since they now have their own media outlets, Butch Stewart and the Jamaica Observer will miss out on substantial advertising revenue if he does not respond to the Gleaner/RJR merger.

Dr. Semaj says if his suggested merger move or any other move is not made by Butch Stewart, then the conclusion can be drawn that Stewart intends to continue to run the Jamaica Observer as a hobby and not an investment.

Psychologist

Dr. Leahcim Semaj

“The only move left for Gordon ‘Butch’ Stewart, now is for him to finally make a business decision regarding the future of the Jamaica Observer.”


Manufacturing

Micro Small and Medium-sized Enterprises (MSMEs) who are members of the Jamaica Manufacturing Association ( JMA) are set to benefit from the August signing of a

Memorandum of Understanding (MOU) with the Bureau of Standards Jamaica (BSJ).

The first MOU was signed two years ago and allowed members and staff to receive train-ing in Good Manufacturing Practices, Hazard Analysis and Critical Control Points (HACCP), packaging and labeling.

The latest MOU, which is in support of the BSJ’s Business Partnership Programme is designed to provide technical assistance to MSMEs, which will enable them to implement quality systems in their organizations, that ultimately will impact national economic development.

According to JMA president, Metry Seaga, “Amaica’s economic health to a large extent, depends on the strength of the manufactur-ing sector. Research confirms that when we hurt, Jamaica’s economy hurts. It is therefore

MSMEs to benefit from latest agreement between Manufacturers Association and

the Bureau of Standards

President of Jamaica ManufacturingAssociation (JMA)

Metry Seaga

“...Research confirms that when we hurt, Jamaica’s economy hurts. It is therefore imperative that the sector be supported and facilitated to develop to its fullest potential”

SaveMSMEs stand to benefit from a twenty percent discount on services offered by the BSJ

$

imperative that the sector be supported and facilitated to develop to its fullest potential’. He says quality and standards are integral to that process and must be part of any development initiatives geared towards the sector. Seaga says the MOU represents the continued mutual commitment to developing the capacity of the productive sector in standards and quality.

Meanwhile, under the MOU, MSMEs stand to also benefit from a twenty percent discount on services offered by the BSJ. However, this will be granted only on the basis of the entity’s involvement in standards related activities and the implementation of quality systems.

The main results expected from the pro-gramme, which is expected to continue until at least 2017, are the enhanced awareness of the value of standards by company personnel; the implementation of quality systems in the various participating entities and the improve-ment of current quality systems in the various organizations and member companies.


94D Old Hope RoadKingston 6Jamaica

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Customer Feedback/ Queries:

E-Mail: [email protected]


LIME goes with the FLOWWhat.s in a name:

Cover Story


Finally, a brand it intends to stick with. Cable and Wireless has finally found a name it can call home and a brand that it expects will not be marred by what Jamaicans remember as deplorable service. Cable and Wireless, bMobile, LIME has finally gone with

the Flow.

On Monday August 31, the official merger of Columbus Communications and Cable and Wireless came into effect, offering consumers in Jamaica, the new FLOW experience. This follows the earlier launch in Barbados on July 25.

According to Managing Director of the new FLOW Jamaica, Gary Sinclair, the move which has been long in coming, is geared toward offering Jamaicans a new experience. He says this merger makes history as the first quad play provider in Jamaica, offering mobile, landline, Internet and cable services.

When Cable and Wireless entered the Jamaican telecommunication market, then under the name Telecommunications of Jamaica, it had not expected that so many name changes would be necessary or that so many billions would be spend on rebranding.

This however changed when Digicel came on the scene with lower rates, cheaper and better phones and deals in 2001. This heralded the era of the ‘Careless and Worthless’ name tag that has stuck with Cable and Wireless despite numerous rebranding efforts.

However, Sinclair says he believes LIME has finally found a home with the US $1.85 billion acquisition of Columbus Communications and what he says is the subsequent final rebranding of LIME to FLOW.

He says the decision to rebrand the two entities as Flow follows ‘in depth customer research conducted across the region in December 2014 by an independent company which revealed that FLOW already has significant brand equity in the largest Caribbean markets’.

The report also reportedly found that the Flow brand was more recommended by customers than LIME or any other competitor. It found that FLOW delivers 25-35 per cent higher customer satisfac-tion in key markets.

Sinclair says with LIME customers ranking FLOW as higher against positive brand attributes, including innovation, value for money, customer-focused, going the extra mile, it was only the right thing to do.

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LIME goes with the FLOWWhat.s in a name:


TELECOMMUNICATION

Managing Director Gary Sinclair speaking at the recent launch of the rebranded telecommunications provider, said Flow Jamaica intends to invest $7 billion dollars in Jamaica over the next 12 months, part of this investment would be in the form

of a call center.

Sinclair says he has heard the complaints by Jamaicans of calling local suppliers and service providers and being greeted with foreign accents. He says the establishment of the call center will create about 400 jobs. He says the move is aimed at returning the El Salvador contact centre back to Jamaica.

According to reports, the new call centre will be operated from a leased space at the Central Sorting Office, and is expected to be completed by March 2016. The development is expected to facilitate voice, e-mail, chat and live chat.

Sinclair says Flow’s investment will also focus on the expansion of its mobile and hybrid fibre co-axial network, to increase access to high-speed Internet for fixed and mobile subscribers islandwide. He says the company also plans to upgrade its billing and customer relation-ship management systems, storing designs and product displays, and will also be introducing full-service bill payment kiosks in eight of its full-service locations islandwide over the next two months.

The Managing Director says other investments include the first full-service bill payment kiosk in the island and the retraining of colleagues to ensure that they delight customers during every interaction.

Sinclair says consumers will now get to see first-hand the combined strength of the new company, especially as it prepares to offer the most technologically advanced quad-play services in the region.

Consumers To See First-Hand The Combined Strength Of

The New FLOW

...Flow Jamaica intends to invest $7 billion dollars in Jamaica over the next 12 months, part of this investment would be in the form of a call center.

Managing Director ofFLOW

Gary Sinclair

“the establishment of the call center will create about 400 jobs.”


Boasting a 14% increase in revenues for the twelve month period ended June 30, Desnoes & Geddes Limited, believes it is a validation of the strength of the strategy it created three years ago to invest in its brands, generating

profitable export growth, and driving end to end efficiencies. According to Managing Director Cedric Blair, the results which were grounded into the company’s performance ambition is setting D&G up to be a great company, well poised to beat the competition and achieve its goal to become the largest

Company Reports

D&G making strides to becoming largest and most respected

total beverage alcoholic company in Jamaica

”...the results which were grounded into the company’s performance ambition is setting D&G up to be a great company...”

Managing Director for Desnos & Geddes Limited

Cedric Blair

)


and most respected total beverage alcoholic company in Jamaica.

D&G Finance Director Bruce Kidner says revenue increased by 14% for the fiscal year to close off at $13,086m. He says revenue from D&G’s domestic portfolio of brewed beverages grew by 14% driven by a combination of volume, mix and price. He says export sales revenue also saw double digit growth of 15%.

Meanwhile, Kidner says operating profit for the period increased 10%, driven by the strong performance in both segments. He says organic profit after tax, which excludes last year’s profit on sale of investments of $974 million, grew by 7%.” Domestic Performance Blair says investment behind the company ’d brands also increased substantially, up 37% to $1,370m. He says the renewal of Red Stripe’s sponsorship of the Red Stripe Premier League early in the year provided a strong platform for the brand over the course of the season. He says Invest-ments also supported the launch of two Red Stripe innova-tions, Sorrel and Lemon Paradise, which received rave re-views from customers.

Blair says both Guinness and the Heineken brands benefited from the launch of new contemporary packaging renovations as well as sponsorship of the Guinness Street Football Com-petition and Heineken Happy Hour.

Export Performance Blair says exports continued to be a key strategic priority and the export segment recorded 15% net sales growth. He says this performance continued to be fueled by the growth of core brands and portfolio expansion in existing and new markets.

The Managing Director says increase in cost of sales per case was kept below inflation despite the rise in cost of imported goods resulting from the Jamaican Dollar depreciation. Blair says operating profit year on year grew by 10%, driven mainly by the strong top line growth.

”...Revenue increased by 14% for the fiscal year to close off at $13,086m.”

Finance Director for Desnos & Geddes Limited

Bruce Kidner

l


The Week Ahead

Apple Launch Event this Wednesday, September 9

Apple watchers and supporters will get some satisfaction this week as Apple prepares for its September 9 launch event. Every eye will be glued to their computer screens as they expect Apple to release not only the new iPhone line up, but also a slew of other products including

the new Apple TV.

It is then expected that a week later the lineup of iPhone, which due to pre-vious experience are expected to be named the iPhone 6S and iPhone 6S Plus, will be available for purchase.

Reports are that the new iPhone line up is expected to be available in US and UK markets by September 18. Meanwhile, according to leaks from a German site, the iPhones are then likely to be released in other locations a week later.

However, customers will have to wait much longer for the rumored iPhone 6c which is expected to keep the size of the older, smaller iPhones, as ru-mors are that it might not come out until November or into 2016. And reports are that the Apple TV, which is expected to be announced alongside the iPhone 6s and 6s Plus will not be available to consumers until October, a time that the company is known to keep another event to show off its iPads.

Y

O

September 7-13

Reports are that the new iPhone line up is expected to be available in US and UK markets by September 18. Meanwhile, according to leaks from a German site, the iPhones are then likely

to be released in other locations a week later.


September 8 Ministry of Industry, Investment & Commerce/ Trade Board Limited Motor Vehicle Import Policy Forum Venue: PCJ Auditorium, 36 Trafalgar Road, New Kingston Email: [email protected]

September 9 The Human Resource Manage-ment Association of Jamaica (HRMAJ) Administration Training Workshop Venue: Knutsford Court Hotel, 11 Ruthven Road, Kingston 10 Email: [email protected] Cable & Wireless/LIME Annual General Meeting Venue: Knutsford Court Hotel, 16 Chelsea Avenue, Kingston

Sterling Asset Management: Investor Briefing Venue: The Jamaica Pegasus Hotel

September 10

Denway Small and Medium Enterprises (SME) Business Growth Breakfast Forum Venue: The Jamaica Pegasus Hotel Email: [email protected] Financial Services Commission (FSC): Corporate Governance and Risk Management Workshop Venue: The Knutsford Court Hotel, 16 Chelsea Avenue, New Kingston Email: [email protected] HRMAJ Administration Training Workshop Venue: Knutsford Court Hotel, 11 Ruthven Road, Kingston 10 Email: [email protected] Jamaica Stock Exchange (JSE) Es-tate Planning Workshop Venue: Online at the Jamaica Stock Exchange, Kingston Email: [email protected]

Businessuite Event Calendar5


Regional

Anya Schnoor Led

ScotiaBank Trinidad Records TT$417m Port of Spain

Port of Spain- Scotiabank Trinidad and Tobago Ltd has reported net income of TT417 million for the nine months ended July 31. This represents a 7 percent increase or an increase of TT$27 million when compared to the same period last year.

According to the Bank, total assets ended the period at TT$21.8 billion, representing growth of $1.6 billion, or eight per cent, when compared to July of last year.

Scotiabank managing director Anya Schnoor says for the period, earnings per share (EPS) grew to 236.3 cents and return on equity (ROE) increased to 15.51 per cent. She says based on this performance, the board of directors approved a third quarter divi-dend of 40 cents per ordinary share, payable on October 9 to share-holders on record at September 11.

Schnoor says the third quarter results reflect consistent growth across all business lines and the continued focus placed on deepen-ing relationship with customers and growing market share. She says total loans grew by TT$1.5 billion or 13 per cent year over the year coupled with an increase in deposits by TT$1.8 billion or 12 per cent.

Managing Director of Scotiabank Trinidad and Tobago

Anya Schnoor

“total assets ended the period at TT$21.8 billion, representing growth of $1.6billion or 8 percent’.”


CIBC records highest quarterly net income since second quarter of fiscal year 2010

Barbados

C IBC First Caribbean has recorded its highest quarterly net income since the second quarter of fiscal year 2010, improving its net intake by nearly 50 per cent.

CIBC says it recorded net income of US$34.8 million in the third quarter, up US$11.4 million or 49 per cent when compared to the same period for the previous year.

For the nine-month period which ended July 31, 2015 net income was US$87 million, up US$31.9 million or 58 per cent over the previous year’s adjusted net income of US$55.1 million.

Total revenue during the third quarter of fiscal year 2015 increased by US$7.1 million. However, total revenue over the nine-month period was down US$7.9 million. The bank says this was primarily due to lower interest earnings from loans and securities. It says some countries continued to experience low credit demand, while interest margins on loans and securities yields were lower.

CIBC says while the balances on productive loans were down slightly over the previous year, an improved performance over the second quarter of 2015 was recorded, with US$80.6 million in loan growth as a larger proportion of the sales pipeline converted into productive loans during the latter half of this quarter, the bank indicated in the release.

The bank says operating expenses over the nine-month period were down by US$3.0 million, compared with the same period last year as it continued to benefit from expense control initiatives and savings from its restructuring programme.

CIBC says Loan loss impairment expense was significantly lower by US$43.1 million compared with the previous period’s adjusted expense of US$77.9 million due to an improvement in the loss experience and recovery activity. Additionally, it says non-productive loan balances were down 18 per cent to US$651 million, compared with the same period last year.

CIBC says it recorded net income of US$34.8 million in the third quarter, up US$11.4 million or 49 per cent when compared to the same period for the previous year.


Commentary

Scammers are always on the hunt Mark

,s Laas Lick

It was the summer of 2008 and the location was China at the Beijing National Stadium known as the Bird’s Nest.

The Jamaican athlete (who shall be nameless) had just made the finals of his race but his entire world was crumbling around him. After two years of pressure from a relative and two weeks before the Olympics he had finally succumbed and made the decision to move US$350,000 out of an account holding US$500,000 to ‘invest’ in Olint. While he was in Beijing the news came. Olint had fallen apart and his money was dead!

By Mark Wignall

Unnamed Jamaican Athlete

“Nearly all of the cash gains I had made competing on the European circuit was wiped out in an instant.”

“I ran on fumes.” He told me later. “No mat-ter how much energy I believed I had, there was nothing else inside of me motivating me. Nearly all of the cash gains I had made competing on the European circuit was wiped out in anvinstant.” Olint had caught many and in its early stag-es even I was convinced that foreign ex-change trading was a real part of its core business. A few months after its demise I was in Portmore at a well known plaza when I saw a young woman I knew. There was a crowd of ‘well to do’ looking people gathered near-by. I asked her what it was all about and


she took me across to a parking lot where she showed me a spanking new BMW. “Wouldn’t you like to drive a car like this?” She asked. My answer took her completely by surprise. “Actually no. It’s a bit too garish. I pre-fer something simpler.” Then she told me about the crowd and a meeting that was being held in one of the clubs nearby. “Honey, it’s a scam,” I said as she explained the details. “Please don’t go and be a part of this ruse,” I begged her as she insisted that the BMW belonged to a friend who had joined up a few weeks before and, she was eager for one too. On the Yahoo website for weeks now is an item, “Jamaica’s new cash formula un-leashed.” It begins with, ‘Many people in Jamaica are making $500 per day with this unique method.’ In the heart of the article is the dead giveaway that it is pure and raw scamming. “I actually make about USD $7,000-USD $8,000 a month working from home. It’s enough to comfortably replace my old jobs’ income, especially considering I only work about 15-18 hours a week from home.” It was brought to my attention by the very same woman from 2008 who telephoned to ask me ‘if it was genuine?’ I couldn’t help but being brutally frank with her. “What became of you and that scheme

Unnamed Scam Victim

“...I got burnt. I lost about $200,000.”

The local Lotto scammers who have been in the news for years now have been associated with guns, gangs, party politics at

constituency level and murder

L

that you had gotten involved with in 2008.” There was a pause. “ Are you still there?” “Mark you don’t have to be so unkind. OK I got burnt. I lost about $200,000.” She said. “So are you a sucker for punishment? Leave it alone. Do you really believe that you can sit at home and do something which the ad doesn’t explain and earn US8,000 per month? It’s a scam designed to get a fee or fees out of you. Leave it alone!” The local Lotto scammers who have been in the news for years now have been as-sociated with guns, gangs, party politics at constituency level and murder. The latest trend is the use of preteens and young teens to do the collection because police intelligence is onto the ‘big boys.’ In one case that I know of, a 16 year old was sent to collect JMD$800,000. On the way back to his ‘boss’ he stopped by his girlfriend and gave her $50,000. Then they both spent another $50,000 in clothes and shoes. By the end of the day $150,000 had been used. The next day they found him. Two bullets later, he was dead. *The views expressed in this article do not represent those of Blackslate Hold-ings, Businessuite Magazine, or any of its subsidiaries or representatives.





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