Jamaican-based regional investment and real estate development group, PROVEN has declared 50 per cent of its June quarter profit as a dividend to shareholders.
Net profit attributable to shareholders totalled US$1.74 million for the first quarter ended June 30, 2022, which represents an increase of 12 per cent compared to US$1.56 million earned in the quarter ended June 30, 2021. The board of directors approved a quarterly dividend to shareholders of US$0.0011 representing 50 per cnet of the profit attributable to equity holders for the quarter.
The dividend will accrue to all shareholders on record as of August 26, 2022, and will be paid on September 9, 2022. Core operating profit improved year-over-year, due to net revenues increasing at a higher pace compared to operating expenses.
Despite adverse market and environmental conditions, PROVEN Group is focused on generating organic growth and creating value from its existing portfolio of assets.
Balance sheet assets amounted to US$1.1 billion at June 30, 2022, growing by 60 per cent from the US$698 million reported at June 30, 2021. The increase in total assets emanates mainly from acquisitions.
Liabilities increased by 87 per cent to US$967 million during the quarter under review, up from US$517 million recorded in 2021. This increase was primarily due to increased customer deposits arising from the acquisition of Fidelity Bank (Cayman) Limited.
Off-balance sheet assets stood at US$776 million, bringing total assets under management to US$1.9 billion at June 30, 2022. Shareholders’ equity declined by 24 per cent to US$126 million as at June 30, 2022, up from US$166 million in 2021.
This was occasioned by a US$48 million reduction in revaluation reserves from the impact of rising interest rates and market volatility on asset prices. PROVEN’s 20 per cent share equity in JMMB contributed US$31 million to the decline in the revaluation reserve under the Equity Accounting Method.
The effect of this reserve loss was partly offset by increases in foreign exchange translation and retained earnings.
Performance by subsidiaries
PROVEN Wealth Limited (PWL)
PWL reported a profit attributable to equity holders of US$0.5 million, a seven per cent improvement over the prior period ended June 30, 2021. Total assets experienced an increase of 25 per cent year-over-year to US$120 million as at June 30, 2022, mainly attributed to growth in its loan receivables portfolio.
PWL remains focused on implementing a digital transformation strategy to improve operating efficiency and customer experience. During the period, the company successfully led the integration of selected middle and back-office functionality into the banking and wealth shared services model that is currently being rolled out across the banking and wealth pillar.
BOSLIL Bank Limited (BOSLIL)
BOSLIL delivered a net profit of US$0.26 million for the quarter ended June 30, 2022, a 76 per cent decline from US$1.1 million in the prior period ended June 30, 2021. The decline in net profit is tied to a decrease in securities trading income, and a 276 per cent increase in IFRS 9 – FVTPL expense both due to a less favourable trading environment.
Consequently, profit attributable to equity holders for the quarter ended June 30, 2022, was US$0.17 million versus US$0.81 million for the quarter ended June 30, 2021. BOSLIL’s total expenses accounted for 12 per cent of total group operating expenses.
Total assets of the bank increased by nine per cent from US$309.5 million as at June 30, 2021, to US$338.7 million as at June 30 2022.
PROVEN Wealth (Cayman), formerly IFP Cayman
PWL (Cayman) is a licensed independent investment advisor with offices in the Cayman Islands, Bermuda, and British Virgin Islands that caters to a variety of investors ranging from medium to high net-worth individuals. The company reported a net loss of (US$0.3) million for the quarter ended June 30, 2022.
This business was adversely affected by pandemic-induced shifts; however, it is currently undergoing major changes including the recruitment of new leadership to build out a more resilient operating framework and return it to profitability.
Heritage Education Funds International Inc.
Heritage Education Funds International was acquired in September 2021. This business specializes in administering and managing education savings plans (ESPs) for clients in the Bahamas, Bermuda, Jamaica, and the British Virgin Islands.
It has enrolled over 50,000 children in its Heritage International Plan since its inception in 1983 and oversees approximately US$150 million in assets under management. Heritage recorded a net profit of US$0.1 million for the quarter ended June 30, 2022, driven by fee income produced by its core activities.
Heritage generated fees and commission income of US$0.74 million which represents 23% of the total fees and commission of the Group.
PROVEN Bank (Cayman) formerly Fidelity Bank (Cayman)
PROVEN acquired Fidelity Bank (Cayman) Limited (FBC) on February 1, 2022. FBC is a financial services company incorporated in the Cayman Islands and licensed under the Bank and Trust Companies Act as a Category ‘A’ Bank to carry on banking business in the Cayman Islands.
As at June 30 2022, total assets stood at US$350.8 million, made up primarily of loan receivables, investments and cash. FBC’s shareholder’s equity stood at US$29.3 million.
PROVEN is heavily engaged in the transitional management and integration of this new asset and to this end during the quarter ended June 30, 2022, steady progress was made toward rebranding and renaming the entity to Proven Bank (Cayman) Limited. This is part of a wider strategic initiative that seeks to leverage the brand and unlock synergies aimed at optimising the value chain.
PROVEN Properties Limited (PPL)
This pillar comprises all real estate investments, including the development sales and recurrent income model. A keen focus will be on increasing the weighting of capital allocation into the rent/ lease recurring revenue model.
The real estate segment of PROVEN’s portfolio is poised to deliver solid performance in this financial year. PPL reported profit attributable to Equity Holders of US$1.8 million for the quarter ended June 30, 2022, from US$0.2 million for the quarter ended June 30, 2021.
During the quarter the company achieved practical completion on the Via at Braemar development which resulted in a significant increase in net proceeds from sale for the quarter ended June 30, 2022. Revenue in this business segment is recognised only upon project completion.
Projects are at various stages in the pipeline and PROVEN has an optimistic outlook for this business.