PBS hunting cash for growth through preference share offers, forecasts record earnings in 2022
Productive Business Solutions Limited, PBS, aims to raise up to $2.6 billion in two preference share offers that will support business expansion at the company that’s already forecast to make its highest revenue and profit in 2022.
The preference share offers open on Jamaican stock market on August 12 and close on September 9.
Underscoring its growth path, PBS expects to increase revenue by one-third to US$300 million from US$224 million in 2021, and net profit by four-fifths to US$10 million in 2022 from US$5.6 million.
JMMB Securities Limited will act as the lead broker and listing agent. The preference share offer includes a raise of US$10 million at 9.25 per cent but with the option to upsize to US$15 million; and the second offer includes a $150 million raise at 10.5 per cent with the option to upsize to $300 million. At current exchange rates, the equity raised would be nearly $1.7 billion, with a potential upsize to about $2.6 billion.
The company already has some US$25 million worth of preference shares in the market which it raised in the 2021 financial year. Its shareholder equity, however, continues to grow with PBS forecasting US$117.2 million of capital by year end, up from US$84.2 million in December 2021 and from US$33.6 million in 2020.
Based on its earnings forecast, the company expects its debt to equity or leverage ratio to drop from 1.7 times in 2021 to 1.1 per cent at December 2022.
PBS distributes and maintains Xerox and other business to business technologies in the Caribbean and Central America. The company controlled by the Musson Group operates in 19 countries, employs over 2,000 information technology professionals and generated revenue in excess of US$224 million for its December 2021 year end. From that revenue haul it netted US$5.6 million as profit in 2021.
Since the pandemic, the company’s holdings have grown substantially due mainly to the September 2021 acquisition of a regional business PBS Technology Group Limited, formerly Massy Technologies Limited, with its non-current assets more than doubling from US$63 million to US$165 million.
The acquisition added significant scale and shifted the product mix further towards enterprise information technology, communications, and advanced services, PBS explained. Further, the acquisition added Trinidad & Tobago, Antigua & Barbuda and Guyana to PBS’s footprint and resulted in balanced revenue between across the Caribbean and Central America, it said.
Over the period, PBS’s borrowings climbed to US$113 million in 2021, up from US$72 million in 2020 and US$71.4 million in 2019.
PBS intends to list the preferences shares on the Jamaica Stock Exchange, and apply for secondary listing on the Barbados Stock Exchange.