Private credit investment company Sygnus Credit Investments (SCI) announced that it has achieved a record six-month earnings for the period ended December 31, 2019, resulting in its largest shareholder dividend payment of US$1 million.
For the period under review, SCI reported a net profit attributable to shareholders of US$1.63 million, an increase of 71 per cent when compared with the US $955,600 recorded in the previous corresponding period.
Earnings per share ended at US$0.47 cents for the period under review.
SCI’s core revenues also grew by 58 per cent to a record US$2.36 million in the six-month period when compared with the US$1.49 million recorded in the corresponding period in 2018.
According to SCI in its unaudited report to shareholders, these results were driven by a near doubling of private credit investments (PCI) in portfolio companies across the Caribbean region to a record US$54.3 million. This rapid growth in PCI was in keeping with SCI’s 2X growth strategy of becoming the leading source of private credit financing for Caribbean middle-market companies.
SCI’s CEO Berisford Grey has indicated that many shareholders have already relayed praises and gratitude for the liquidity during this COVID-19 period.
“A part of our strategy is to consistently pay dividends up to 85 per cent; right now we are just about 60 per cent of the profits that we pay out to our investors. This makes us one of the highest-paying dividend stocks on the Jamaica Stock Exchange. Many of our shareholders have written to us through social media or formally congratulating us as they welcome the liquidity in this current period, especially when you’re talking about US-dollar liquidity. COVID-19 has really disrupted the livelihood of many small, medium and large investors,” he stated.
CHALLENGES AND OPPORTUNITIES DURING COVID-19
As for how the company will help clients to navigate the challenges posed by the pandemic. Grey indicated that SCI is working very closely with those in Jamaica and across the Caribbean region on robust response strategies.
“At SCI we have already made the assumption that the [pandemic] will last for another three months…and I say many times that at the core of SCI and how the business is run is analytics, expertise, and risk management. We spent quite a bit of time, over the last three weeks or more, drilling down into our portfolio and understanding the different sectors where we have exposure, and ranking our clients by sectoring which one will need immediate support and which one will probably need support in a second way of analysis. We are also looking at how we can provide speedy working capital lines,” Grey said.
According to him, clients in the hospitality industry or who have strong linkages to that industry will be impacted immediately by the fallout from COVID-19.
“[SCI] takes more of an intimate approach to really understand what it will take [to assist] or what’s their needs over the next three to six months to weather this storm. At the end of the day, we want our clients to ride through this wave,” he continued.
He added that SCI is also working closely with clients in the distribution industry, especially those providing basic commodities, and with those in the energy sector.
However, despite impending challenges, Grey added that he anticipates a demand in SCI’s private equity services.
“Companies who would normally want credit, for example, will see equity investments or an equity partner as a more attractive option, and our private equity funds will be ready to support those plans. On the wealth side, we see people wanting to take advantage of rebounded or suppressed prices in assets – and we stand ready to help them,” Grey asserted.
SCI provides non-traditional financing to medium-sized firms across the Caribbean region. These medium-sized firms, which are typically underserved by traditional forms of financing, can access capital to drive their expansion and growth. Non-traditional forms of credit are more customised and flexible than traditional financing.
The company listed on the Jamaica Stock Exchange in 2018.
Source: Jamaica Observer