Mayberry Investments Limited (MIL) CEO Gary Peart anticipates the company’s profitability will see a rebound in the next financial year after posting a profit of $250 million for the third quarter.

The net profit for the three months ending September 30, 2024, pulls the company out of the red after the company registered a $1.9-billion loss in the corresponding period last year.

Yet, it was not enough to stem the haemorrhaging the company has experienced since last year when it posted a nine-month loss of $1.75 billion and full-year loss of $1.47 billion. Year-to-date loss for 2024 was, however, lower at $688 million.

MIL saw its income expense rising by 32 per cent to $628.1 million as interest income was flat. On the other hand, the company benefited from improvements in consulting fees and commissions, net trading gains and net unrealised gains on financial instruments.

Peart, speaking on the Mayberry Investor Forum streamed online on Thursday, October 24, said that the investment firm took in cash from the sale of its 20 per cent stake in Caribbean Producers (Jamaica) Limited (CPJ). The company sold its stake for $2.3 billion at $10.50 per share.

“The sale of CPJ crystalises unrealised gains in cash,” he told MIL Senior Vice President of Investment Banking Dan Theoc, who moderated the segment.

Proceeds from the sale of the CPJ interest went to paying down debt, which will “materially reduce interest expense” in the upcoming year, Peart disclosed, while projecting a breakeven or small profit for the current year.

His buoyant outlook on the 2024/25 was also due to the company’s investments in new software and a commercial real estate development in the Corporate Area. “We have spent a lot of money over the last three years developing software, so making the digital switch to ultimately full automation…you’re investing to get efficiencies,” he explained.

Peart further outlined that with the roll-out of the new investment will come high depreciation costs. However, as the technology becomes entrenched in the investment firm’s operations, it will result in “a reduction in other costs to give you that return you expect on your investment”.

The software should improve the company’s competitive advantage in the equities trading market.

In the meantime, MIL’s private equity segment is awaiting the operationalisation of a real estate project on Chalmers Avenue in St Andrew, which will generate a new income stream through a leasing arrangement. “So, once it’s tenanted, you get a stream of cash flow,” Peart shared.

With the Bank of Jamaica lowering interest rates twice since the start of the year, and expected to lower interest rates further, the MIL CEO anticipates these decisions will “drive a material move in the stock market” between the end of 2024 and mid-2025. This will also augur well for the company’s equities trading subsidiary Mayberry Equities Jamaica Limited.