2020 wiped out 2019 comprehensive income of $5.8 billion to chalk up losses of $4.9 billion

Mayberry Investment Group has seen its fortunes turn around in 2020, recording a big loss of $4.9 billion, indicative of the harsh investment climate in the pandemic year.

The 2020 loss came at a time when the company was coming off a bumper year in 2019 where total comprehensive income grew to $5.8 billion. According to the group’s just released audited financial accounts, the big deficit last year was primarily due to unrealised fair value losses on securities of approximately $4.3 billion.

Consulting fees and commission income was hit hard, declining by $384.4 million to close 2020 at $350.7 million, due to a delay in projected deals for the last nine months of the year. However, there was strong growth from the investment group’s US dollar corporate portfolio, as more customers saw the product as an alternate investment during 2020.

On the positive side, total operating expenses for the year ended 2020 decreased by $431 million to $1.5 billion compared to $1.9 billion for 2019, as costs were contained in the category ‘other operating expenses. In addition, there was a reversal of provision for credit losses of $83 million recorded by the parent company, resulting from recovered bad debts.

Big decline in total assets due in part to reduced values on equities

Total assets for 2020 were down to $32.2 billion compared to $36.9 billion for the comparative period for 2019. This represents a $4.7-billion decrease, or 12.8 per cent, in asset base due mainly to reduced values of quoted equities and decreases in reverse repurchase agreements.

Total liabilities for the year increased in 2020 to $16.8 billion, mainly driven by increases in demand loans resulting in total loans moving by $281 million and increased client cash payables attributed to a higher accounts payable balance of $5.1 billion. This position was offset by a decrease in bank overdraft of $74 million, securities sold under repurchase agreements of $626 million and deferred tax liability of $219 million.

Profits in brokered deals increased by 84 per cent, even while the overall group results were impacted by the large unrealised losses of $1.2 billion in the subsidiary, Mayberry Jamaican Equities Limited. The cash position of the group has increased substantially from $1.59 billion to $1.63 billion, which positions it to take advantage of market opportunities.

Mayberry Group’s net book value per share for the year ended December 31, 2020 was $9.66 versus $12.86 over the corresponding period in 2019. This was attributable to downward price movements which negatively impacted the value of investment securities by $6.4 billion and reduced reverse repurchase agreements by $958 million.

Big drop in total revenue

The group had unrealised gains of $536.1 million, coming from the revaluation of properties. Total revenue recorded by the group during 2020 was $683.1 million relative to $2.54 billion for the comparative period in 2019. After-tax loss attributable to shareholders was $352.9 million compared to an after-tax profit of $709.6 million for 2019.

This resulted in a loss per share of $0.29 versus earnings per share of $0.59 in 2019. The directors of the group say the impact of the global COVID-19 pandemic on the local and global financial markets affected core revenues negatively, which resulted in lower interest income earned from the bond portfolio.

In addition, larger unrealised losses were recorded for investment securities for Mayberry Jamaican Equities. Dividend income declined by 11 per cent or $41.5 million, representing lower payouts in share of profits for quoted securities held.

Funds under management grew by $1.8 billion to $20.5 billion, up from $18.7 billion. This portfolio increase was mainly attributable to the growth in the Mayberry Managed Portfolios.

Mayberry Group’s capital base showed robust growth and remained in good standing with retained earnings moving from $6.4 billion to $6.0 billion while fair value reserves closed 2020 at $3.9 billion versus $7.4 billion for 2019.