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JM | Oct 11, 2020

Jamaican Teas 3-to-1 stock split takes place November 30

/ Our Today

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Jamaican Teas, through its Caribbean Dreams Select branch, on its November 2019 launch of the exotic line. (Photo: JamaicanTeas.com)

Jamaican Teas three-to-one stock split is now set to take place on November 30 having been pushed back for more than seven months.

The company has advised that on October 7, 2020, the directors approved a resolution, setting November 30, 2020, as the new record date for its proposed three-to-one stock split.

In a regulatory filing to the Jamaica Stock Exchange (JSE), Jamaica Teas reported that “this stock split is to be put to the company’s shareholders for their approval at a continuance of the Annual General Meeting which was adjourned on 17 June 2020.”

The company also reported that the reconvening of the company’s annual general meeting is to take place on November 17, 2020. This meeting will be followed by an extraordinary general meeting on the same day.

The three-to-one stock split, when it happens, will result in the total issued shares in the company being increased from 695,083,459 ordinary shares of no par value to 2,085,250,377 ordinary shares of no par value.

The stock split is being executed to make the shares in Jamaican Teas more liquid, allowing them to trade more freely.

When executed, this will be the third stock split by the company. In April 2017, Jamaican Teas shareholders approved a two-to-one split of the stock. This followed another split in 2016 after which the price climbed close to $8 per share.

The John Jackson-led board of Jamaican Teas has become concerned that the company’s stock seems to have hit a wall of inactivity and market indifference. Jackson expressed the view that there seems to be market resistance whenever the stock hits the J$6 to J$7 margin.

Since April 2018, Jamaican Teas’ share price has meandered between J$4 and J$6, going close to the J$7 barrier only twice last year, on August 5 and September 9.

Jamaica Teas Limited’s Bell Road headquarters in Kingston, Jamaica. (Photo: JamaicaTeas.com)

At year-end September 2019, Jamaican Teas doubled profit, despite spinning off its investment arm, and listed a new company in QWI Investments.

Jamaican Teas owns 34 per cent shareholding in that company. In October 2019 the company also purchased 50 per cent of Bay City Foods, located in Montego Bay, making it a wholly-owned subsidiary of the group.

At year-end September, net profit attributable to Jamaican Teas for the year increased by J$201.2 million, from J$198.5 million, to J$399.7 million. This resulted in earnings per share from continuing operations of 57.8 cents (2017-2018 – 29.0 cents).

Company directors, in remarks attached to the fourth-quarter report, said investment properties produced J$72.3 million in gains in 2019 compared with J$24.8 million in 2017-2018. However, the main tea business suffered a temporary setback in sales in the USA market due to a main distributor there rightsizing its inventories.

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