Paul Hanworth | ‘An unfortunate characterisation’
The following is a letter submitted in response to an article published in last Friday’s Financial Gleaner under the headline ‘PanJam bullish on Regus Investments as brand expands’.
I write on behalf of PanJam with reference to the captioned article, specifically in regard to the paragraphs referencing PanJam’s investment in Chukka Caribbean Adventures Limited.
I believe the summary headline above the paragraphs ‘Debt Servicing a Problem’ is an unfortunate characterisation of the discussion.
There is a specific inaccuracy with respect to the phrase “caused revenues to tank” near the end of the first paragraph discussing Chukka. I believe we said there was a fall-off in cruise traffic in Jamaica in the current year, but we certainly didn’t say that revenues were down year on year. In a departure from our policy not to share our associated companies’ material and non-public information, we would like to clearly state that Chukka’s revenues for the year ended September 2019 are in fact up 6.2 per cent over prior year and were up by a similar percentage for the nine months ended June (which was the latest date for which performance metrics were available at the time of the interview).
At the end of that same paragraph, there is a sentence, “Chukka posted a loss of $29 million last year”. This is absolutely not true. Your report has picked up a line in PanJam’s 2018 annual report (note 18 on page 114) which reads “share of net loss” in the section related to Chukka, in the amount of $29.272 million. This actually represents a cumulative adjustment to PanJam’s Jamaican dollar carrying value of Chukka in PanJam’s financial statements at December 31, 2018, relating principally to hurricane damage to certain assets in Turks & Caicos. I agree that this could have been presented more accurately in PanJam’s report. Note that Chukka’s financial statements (which are not publicly available as it is a private company) showed net profit for both the year ended September 30, 2018 (audited) and the year ended September 30, 2019 (audit is in progress).
Every key metric in Chukka’s 2019 operating performance – customer count, revenue, gross profit, operating profit, EBITDA, and net profit – show improvement year on year. Furthermore, the PanJam team was clear in the interview that we are confident in Chukka’s future. Its plans for further regional expansion, and unique position as the region’s premier experiential tour operator and cruise passenger adventure destination bode well for value creation for the company’s investors and team members. We are disappointed that this positive outlook was not reflected in the article.
Paul R. Hanworth is deputy CEO of PanJam Investment Limited