Interest income was down 48% to $10.58 million

Investment company Proven Investments is reporting a sharp decline in profits for its 2020-2021 financial year, which ended on March 31.

Net profits attributable to shareholders for the period under review amounted to $11.53 million relative to $29.98 million documented in the comparable period in 2019-2020. Profit attributable to shareholders for the March fourth quarter was slightly up totalling $5.22 million versus $3.53 million booked in 2019-2020.

Operating profit for the year and the quarter rose to $6.17 million (2019-2020: $32.31 million) and $1.74 million (2019-2020: $23.57 million), respectively. Notably, share of profit of associate for the year amounted to $10.70 million for 2020-2021 relative to $10.44 million in 2019-2020.

Preference Share Dividend’ decreased 68 per cent to $2.74 million coming from the 2020 posting of $8.61 million. Profit before tax amounted to $14.13 million versus the $34.14 million booked in 2019-2020.

Big drop in taxation

Taxation decreased year over year by approximately 46 per cent from $1.90 million in 2019-2020 to $1.03 million for the period under review. As such, net profit amounted to $13.10 million, a 59 per cent decrease when compared to the $32.24 million in 2019-2020.

Proven booked profit for the fourth quarter of $5.31 million compared to $2.46 million recorded for the comparable quarter in 2019-2020. Proven reported interest income of $10.58 million, a 48 per cent decrease when compared with the $20.29 million reported for the same period in 2019-2020.

Interest expense for the year amounted to $7.55 million, 17 per cent lower when compared to the $9.11 million booked for the prior year. As such, net interest income for the year witnessed a decline of 73 per cent to total $3.04 million relative to the $11.18 million reported for previous year.

Net interest income for the quarter amounted to $800,000 reflecting a decrease of 39 per cent relative to the $1.32 million achieved in the previous year. Dividend income amounted to $42,000, a 24 per cent increase from the $34,000 recorded in 2019-2020, while fees & commission income notably decreased by 33 per cent to $7.80 million relative to $11.57 million in 2019-2020.

Small gain on net FX

Net foreign exchange gain amounted to $1.88 million relative to a gain of $1.91 million recorded in 2019-2020. Net fair value adjustments and realized gains rose to $7.33 million versus $3.78 million booked in 2019-2020. Gain on disposal of subsidiary amounted to nil (2019-2020: $24.93 million).

Other income moved from $13.39 million in 2019-2020 to total $3.68 million for the period under review, a decline of 73 per cen%. Proven booked an eight per cent decrease in pension management income to total $3.17 million, down from $3.43 million booked in the same period last year.

Consequently, net revenue decreased by 62 per cent to total $26.95 million compared to $70.23 million recorded for 2019-2020. For the quarter, net revenue amounted to $7.93 million relative to $39.99 million in 2019-2020.

Operating expenses declined by 45 per cent for the year to total $20.77 million relative to $37.92 million in 2019-2020. Of this, staff costs recorded a 26 per cent decrease to close at $9.58 million relative to $12.88 million documented for the prior comparable year. ‘Depreciation and Amortization’ decreased 11 per cent to $1.87 million (2019-2020: $2 million).

Property expense totaled $1.15 million compared to $9.36 million for the prior financial year. Impairment loss on investments and impairment losses of loans and other assets amounted to a reversal of $396,000 (2019-2020 expense: $362,000) and a reversal of $21,000 (2019-2020 expense: $1.46 million), respectively. 

Other operating expenses totaled $8.60 million (2019/2020: $11.87 million). Operating expenses for the quarter fell 62 per cent to $6.19 million versus $16.42 million booked for the comparable quarter in 2019-2020.

Total comprehensive income for the year amounted to $40.93 million compared to $18.32 million reported for the prior financial year.

Remaining nimble and aggressive in acquisitions

In commenting on the performance, Proven’s management says, “the Company remained nimble and aggressive in the execution of its acquisitions throughout the pandemic. This posture resulted in the signing of three new deals to acquire Portfolio Assets within the Caribbean Region while aggressively executing on new and existing Real Estate Projects”.

Subsequent to the year end on June 8, 2021, Proven officially closed on the purchase (50.5 per cent interest) in Roberts Manufacturing Co Limited, a leading manufacturer of animal nutrition, edible fats, and oils in Barbados supplying diversified consumer goods to markets in the Caribbean.

Proven continues to make significant endeavours to improve upon its diversified business model by taking advantage of opportunities available in a stressed market. Recently, the investment company announced the acquisition of Heritage Education Funds and Fidelity Bank (Cayman) Limited with both transactions scheduled to close in the latter part of 2021.

The management reports that, “Proven is well-positioned to continue its growth trajectory in an improving economy and maintain its commitment to execution of core growth strategies and the protection of our stakeholders.”

Shareholders’ Equity totaled $161.68 million relative to $99.01 million in 2019-2020; resulting in a book value per share of $0.26 (2019-2020: $0.16). Management says, “this was as a result of the successful execution of the raise of US$30-million equity executed over the period and a 21.81 per cent increase in Retained Earnings”.