With Guardian Holdings Limited (GHL) listed once again on the Jamaica Stock Exchange (JSE), NCB Financial Group (NCBFG) is aiming to raise $1.59 billion (US$10.55 million) from the sale of two million shares or 0.87 per cent of its GHL stake through NCB Global Holdings Limited (NCBGL).

This secondary market offer will see GHL shares being offered to the public at a price of $795 or TT$35.97 or US$5.28. 1.4 million shares have been reserved while 600,000 shares or 30 per cent of the offer will be made available to the general public pool. Of the 1.4 million shares, one million shares have been reserved for NCBFG and GHL clients in Jamaica (Client Reserve Pool) while the other 400,000 shares have been made available to NCBFG and GHL staff (Staff Reserve Pool). These pools can only be subscribed to using a brokerage account with the lead broker NCB Capital Markets Limited (NCBCM).

“This invitation creates a unique opportunity for Jamaicans to share in the continued growth of the company. While the past year was fraught with tremendous challenges, the company was able to overcome these challenges and produced another satisfactory year. The staff and agents demonstrated commitment and resolve in quickly activating digital channels to service customers and to make new sales. The robustness and flexibility of the new technological infrastructure in which the company invested over the past few years was also proven, as it provided the bedrock for securely enabling digital channels of sales and service,” said chairman of NCBGL Patrick Hylton in his message to prospective investors.

NCBFG first acquired a 29.99 per cent associate stake in GHL through its wholly owned subsidiary NCBGL in May 2016 at a cost of $28 billion. NCBFG increased its holdings further by purchasing an additional 31.98 per cent in May 2019 at a cost of $28.1 billion or US $2.65 per share. GHL is classified a subsidiary on NCBFG’s books with the remaining 38.03 per cent held by Trinidadian shareholders on the Trinidad and Tobago Stock Exchange (TTSE).

By selling some of its shares on the JSE, NCBFG will access capital from NCBGL which hasn’t been paid a dividend in over a year from GHL which decided not to pay any dividends due to the uncertainty at one point during the pandemic that was further compounded by the inter-company dividend issues. NCBGL stated that the proceeds of the sale will be used for corporate purposes. This will also create a market for the shares which are slowly being transferred from the TTSE to the JSE through inter-CSD (Central Securities Depository) transfers.

GHL recorded a profit attributable to shareholders of TT$176.1 million ($3.89 billion) in its first quarter compared to the loss of TT$36.5 million incurred at the start of the pandemic which saw asset prices across the world collapse. Net results from insurance activities grew by 15 per cent to TT $208 million largely from the acquisition of NCB Insurance Company’s portfolio of policies in September by Guardian Life Limited (GLL). GLL’s profit before taxation (PBT) grew by 41 per cent to $12.11 billion (TT $545.6 million) for its 2020 financial year (FY) and contributed to 53 per cent of GHL’s TT$1.022 billion PBT. GHL’s profit attributable to shareholders has risen from TT$395.8 million in its 2015 FY to TT$774.5 million in its 2020 FY.

GHL’s introduction to the JSE saw its price rise by 66 per cent in its first week of trading and become the second-largest company by market capitalisation which was only dwarfed by its parent company NCBFG. GHL’s stock price closed at $899.95 on the JSE while its TTSE price was TT$30.61 ($676.59). GHL’s trailing earnings per share was TT$4.26 which meant that its price to earnings (PE) was 7.19 times. NCBCM’s analysis shows that GHL was trading at an implied PE of 8.4 times on the offer price compared to the JSE’s Main Market financial sector average of 18.2 times. Theoffer opens on May 31 and closes on June 11 with an option to extend the offer if needed.