After more than two years following an initial 0.8 per cent acquisition in Dolla Financial Services Limited by Mayberry Group Limited (MGL), MGL’s collective interest has jumped to 25.7 per cent as it continues to increase its interest in the fast-growing microcredit company.

Widebase Limited, a wholly owned subsidiary of Mayberry Group, bought 100 million shares or four per cent of Dolla at $2.38 for a consideration of $238 million on July 19 from FirstRock Global Holdings Limited, trading as Premier Private Equity (formerly FirstRock Private Equity Limited). That pushed its stake to 350 million ordinary shares or 14 per cent. Mayberry Jamaican Equities Limited (MJE) also purchased 31,919,632 shares of Dolla for $67.54 million during the quarter to push its stake to 292,831,536 shares or 11.71 per cent. Dolla as a stock made up of 4.5 per cent of MJE’s $22.73 billion (US$143.97 million) equity investment portfolio.

Mayberry Group is a publicly listed holding company controlled by the Berry family with three key subsidiaries: Mayberry Investments Limited (100 per cent subsidiary), which is a brokerage firm; Widebase Limited, which is a private equity holding company; and MJE, which is a publicly listed company that primarily owns listed securities on the Jamaica Stock Exchange (JSE). MGL sold 240.44 million ordinary shares of MJE to Mayberry Managed Clients in the first quarter (January to March) of 2024 which reduced its direct stake to 441,839,752 or an estimated 36.78 per cent based on issued shares.

The move by Mayberry Group to deepen its interest in Dolla comes at a time when the microcredit company collaborates more with Mayberry Investments to secure new financing to fund further growth. One of these initiatives is the consideration to list its private credit subsidiary Ultra Financier Limited on the JSE and raise new capital to fund its booming business.

Mayberry Investments was the lead arranger for a recent bond offering where Dolla sought to raise $1-$1.5 billion through a secured bond with a 12 per cent interest rate over four years. Whilst the success of that bond was not immediately known, Dolla’s quarterly report revealed that it had a $725.17 million cash inflow in loans received during the third quarter and a cash outflow of $315.60 million for loans repaid. That translates to a net cash inflow of $409.57 million to fund short-term loans to its clients.

Dolla’s third quarter report showed that its interest income grew 17 per cent to $353.99 million with net interest income rising 13 per cent to $280.96 million. However, Dolla’s total operating income was flat at $255.61 million due to higher expected credit loss provisions and foreign exchange losses. With a 27 per cent jump in operating expenses to $190.05 million, Dolla’s profit before taxation dropped 38 per cent to $65.56 million. Net profit was down 46 per cent from $102.47 million to $55.58 million.

The overall nine months performance paints a different picture as net interest income remains up 23 per cent to $1.10 billion with net interest income increasing 22 per cent to $903.52 million. Due to higher operating expenses related to additional staff and professional fees, profit before taxation was only up 10 per cent to $369.03 million with net profit coming in four per cent higher at $339.64 million. Dolla’s trailing 12 months earning per share is $0.18.

Dolla’s total assets were up 19 per cent over the nine months to $3.57 billion with net loans up 28 per cent to $3.15 billion and cash at $202.04 million. Total liabilities and shareholders equity were $2.52 billion and $1.05 billion, respectively. Dolla should complete the winding up of its Guyana loan business by Q2 2025.

Prior to listing in June 2022 on the Junior Market of the Jamaica Stock Exchange (JSE), Dolla’s consolidated asset base in December 2021 was $861.09 million with its loan portfolio at $750.50 million. This portfolio was responsible for delivering annualised total income of $395.28 million and profit before tax (PBT) of $167.80 million.

Mayberry and Premier profit off microcredit

MJE purchased an additional 2,466,864 shares in Lasco Financial Services Limited during the first nine months of 2024 to bring its stake to 267,179,109 shares or 20.8697 per cent. Lasco Financial owns Lasco Microfinance Limited, a licensed microcredit company. MJE previously invested $38 million in September 2006 for a significant stake in Access Financial Services Limited before disposing of that interest for $938.38 million in December 2014 while also collecting at least $237.88 million in dividends between 2010 to 2014. Access is the largest microcredit firm on the JSE by assets and one of the largest players in the microcredit space.

Mayberry Investments had sat on both companies’ boards in the past and had proposed its Chief Operating Officer Andrea Whittaker to Dolla Financial’s board. However, her appointment was subject to Bank of Jamaica (BOJ) approval. She subsequently resigned from Mayberry on April 12 before a BOJ decision was announced. Xesus Johnston, CEO of Supreme Ventures Games Limited, and Walter Scott, KC, former chairman of McKayla Financial Services Limited, had their fit and proper confirmed by the BOJ during the third quarter and were confirmed to Dolla’s board.

Supreme Ventures Limited (SVL) owns 15 per cent of Dolla, which it purchased for $1.70. MJE owns 18.6581 per cent of SVL and is its second largest shareholder. Gary Peart is the chief executive officer (CEO) of Mayberry Group and executive chairman of SVL.

It was announced that Scott KC was appointed the chairman of Dolla and Ultras’s board of directors effective November 15. Ryan Reid will transition to the role of vice chairman on both boards with former vice chairman of Dolla’s board, Dr Michael Banbury remaining a director of Dolla’s board. Kadeen Mairs, former CEO of Dolla, resigned as chairman of Ultra’s board on November 14.

The revelation of an increased stake in Dolla by Mayberry Group was then proceeded by a 75 million share trade on November 11 at 1:58 pm for $3.32 for a consideration of $249 million. This transaction occurred a day after Dolla’s third quarter (July to September) report was published, a similar occurrence to July where Widebase bought the shares on the same day as Dolla’s second quarter report was published. While the seller isn’t currently known, the number of shares corresponds exactly to 75 million shares each owned by FRPE SPV One Limited and FRPE SPV Two Limited, which are the sixth and seventh largest shareholders in Dolla.

FRPE SPV One and FRPE SPV Two are both St Lucian international business companies (IBC) formed on July 11, 2023, and received their 75 million share interests in Dolla from Premier Private Equity in the fourth quarter of 2023. Dolla’s shareholder report notes that Reid and Dr Banbury have corresponding interests in both companies, which translates to 30.50 per cent each.

Premier bought its initial 75 per cent stake in Dolla for US$1.1 million ($158.88 million) in March 2021. It has since sold 53 per cent of the company for an estimated $1.63 billion and collected $191.15 million in dividends and management fees to date. Reid and Banbury’s corresponding interests in Premier are 30.30 per cent each while FirstRock Real Estate Investments owns 12 per cent of Premier. Prior to Premier’s share buyback programme last year, former director Christopher Yeung corresponding interest in Premier was 7.17 per cent.

Dolla’s share price closed Wednesday at $3.02, which leaves the stock up 12 per cent in 2024 with a market capitalisation of $7.55 billion. Director Lisa Lewis’ connected party sold 796,178 shares on September 18 while Reid’s connected parties sold 1,987,632 shares on September 16. Kurt McKenzie, head of credit and collections, sold his direct 500,000 shares on August 15, Kahlilah Thompson, operations manager, sold 300,000 shares on August 28, while Chief Financial Officer Trevene McKenzie sold 513,264 shares during the quarter.

Dolla will be giving its shareholders an early Christmas gift on December 24 when the $0.008 dividend totalling $20 million is paid to shareholders on record as of December 10. This brings the total dividends declared this year to $0.107 and dividends paid since listing to $.2106, relative to the $1 listing price. Dolla had an investor briefing with Mayberry last Tuesday while the company will had its earnings call last Wednesday on YouTube with Learn Grow Invest Limited.