Express Business Filler #1

This week, we at Bourse take a look at the financial performance of two major players in the Non-Banking Finance sector, Sagicor Financial Corporation Ltd (SFC) and Guardian Holdings Ltd (GHL), for the nine-month period ended September 30, 2019. Both companies reported improved results against a backdrop of generally favourable conditions.

Sagicor Financial Corporation Ltd

Sagicor Financial Corporation Ltd (SFC) reported Total Diluted Earnings per Share (EPS) of $0.71 for the nine-month (9M) period ended September 30, 2019, a 4.0% improvement from the EPS of $0.68 recorded in the prior comparable period. Diluted EPS from Continuing Operations climbed 13.2 per cent year-on-year (YoY), from $0.62 in 9M 2018 to $0.70 in 9M 2019.

Net Premium Revenue improved to $6.4B in 9M 2019, a significant 30.7 per cent or $1.5b YoY increase. Net Investment and Other Income also grew 33.3 per cent from $2.3b to $3.1b. Coinciding with SFC’s revenue growth came an increase in Total Benefits and Expenses, which moved from TT$6.7b in 9M 2018 to $8.7b in 9M 2019. SFC reported a 32.1 per cent or $192.1m YoY increase to Income before Taxes. Overall, Net Income for the period amounted to $539.2m, 34.9 per cent higher than the $399.7m recorded in 9M 2018. Continuing Operations would have contributed $535.7m (+41.7 per cent YoY) to Net Income, while Net Income from Discontinued Operations fell from $21.6m in 9M 2018 to $3.5m in 9M 2019.

Revenues Grow

Life, Health and Annuity Insurance, which contributes approximately 83 per cent of Sagicor’s total revenue, recorded a Four-Year Compounded Annual Growth Rate(CAGR) of 15.5 per cent. Property and Casualty Insurance and Banking, Investment Management and Other Financial Services would have recorded four-year CAGRs of 4.9 per cent and 10.4 per cent, respectively. Sagicor has credited its current Revenue Growth to expanding operations in the USA and its decision to cease reinsuring its premiums to third parties.

Acquisitions and Alignvest Update

Investors of both AQY and SFC approved the acquisition of SFC by AQY earlier in 2019. To date, the transaction remains incomplete. In the offer of cash settlement to shareholders, as an early exit option, the majority of investors opted to retain their SFC shares for ownership in ‘New SFC’. New SFC will have a cash ‘war-chest’, which it could be used to pay down debt and/or pursue acquisitions.

Sagicor Life Inc on September 30 2019 entered into agreements to acquire the traditional insurance portfolios of both Colonial Life Insurance Company Ltd (CLICO) and British American Insurance Company Ltd (BAT).

Sagicor is still pursuing the acquisition of Scotiabank Insurance Trinidad and Tobago Ltd and establishing a 20-year distribution agreement for insurance products in Trinidad and Tobago. However, the company announced that, by mutual consent, a similar arrangement which had been made with Scotia Jamaica Life Insurance Company Ltd has been cancelled.

Sagicor also agreed to acquire a 60 per cent stake in Jamaican-domiciled Advantage General Insurance Company Ltd for US$31.4m from NCB Capital Markets Ltd, effective September 30, 2019.

The Bourse View

SFC’s currently trades at $10.70 and has appreciated 18.9 per cent YTD. The stock trades at a trailing price-to-earnings ratio of 12.1 times, lower than the Non-Banking Financial Sector average of 12.6 times (excluding NEL). SFC offers investors a trailing dividend yield of 3.17 per cent, greater than the sector average of 2.86 per cent (excluding NEL). SFC currently declares USD dividends on a semi-annual basis, therefore protecting investors from depreciation in the TTD relative to USD. On the basis of fair valuations, the prospect of converting a TT dollar asset into a ‘hard currency’ asset through its eventual listing on the Toronto Stock Exchange, improvements in performance and the upside potential for growth from the AQY transaction and acquisition activity, Bourse maintains a BUY rating on SFC.

Guardian Holdings Ltd

Guardian Holdings Ltd (GHL) recorded Earnings per Share (EPS) of $1.86 for the nine months ending September 30, 2019, a 16.3 per cent increase from the EPS of $1.60 for the corresponding period in 2018.

Net Income from Insurance Underwriting Activities improved 7.7 per cent from $499.8m in 9M 2018 to $538.2min 9M 2019. Net Income from Investing Activities advanced 14 per cent, from $812.7m to $926.9m. Operating Expenses were up 5.79 per cent to $792.3m in 9M 2019 and Finance Charges followed with an increase from $101.4m in 9M 2018 to $109.7m for the 9M 2019 period. Overall, Operating Profit climbed to $581.92m, 23.8 per cent higher than comparable prior year period. Share of Profit of Associated Companies was 31.3 per cent higher than the previous year, which contributed to Profit Before Taxation rising to $604.3M from $487.2m. Profit for the Period advanced 16.9 per cent from $371.85m for 9M 2018 to $434.52m for 9M 2019.


GHL has delivered improved Net Income from all activities over the past 3 comparable periods, with Net Income from Investing Activities being the largest contributor to its growth. Net Income from Investing Activities increased 14.0 per cent from its $812.7m 2018 figure to $926.9m in 2019. This recovery was attributed to an $89m increase in Net Fair Value Gains due to the recovery of the US and Jamaican stock markets and improved investment income. With markets flying high in 2019, GHL’s future profit generation from

Investing Activities could potentially face headwinds should markets suffer a correction. Net Income from Insurance Underwriting Activities also improved 7.7 per cent YoY, bolstered by an 8 per cent improvement in both the Life, Health and Pension, Property and Casualty business segments, resulting from acquiring new business and organic growth. The Group noted that a net loss reserve of $86M before tax was established, accruing from claims for Hurricane Dorian which affected the Caribbean Basin during August to September 2019. Depending on how much of these claims are actually made, this could potentially provide some support to future profitability.

The Bourse View

GHL is currently priced at $18.51 and is trading at a trailing P/E ratio of 7.2, below the Non-Banking Finance Sector’s average of 12.6 (excluding NEL). The stock also has a trailing dividend yield of 3.89 per cent, the highest in the Non-Banking Finance Sector and above the sector’s average of 2.86 per cent (excluding NEL). On the basis of positive returns, but the company’s dependence on volatile international capital markets, Bourse maintains a NEUTRAL rating on GHL.

For more information on these and other investment themes, please contact Bourse Securities Ltd, at 226-8773 or e-mail us at


This week, we at Bourse review the financial performance of MASSY Holdings Ltd (MASSY) for the year ended on September 30, 2019.

MASSY Holdings Ltd (MASSY)

MASSY Holdings Ltd (MASSY) reported a Basic Earnings per Share (EPS) of $5.76 for the full year ended September 30, 2019, an 8.3 per cent improvement over the reported 2018 figure of $5.32. Group Revenue remained relatively flat, increasing to $11.6b for 2019 (up 0.4 per cent). 

FINANCE Minister Colm Imbert is assuring that the Office of Procurement Regulation would still have the power to investigate government-to-government arrangements after Government makes “slight” amendments to Section 7 of the Public Procurement and Disposal of Public Property Act next month.

A CALL has been made for Government to take immediate action on campaign finance reform and implementing the public procurement legislation.

Without these two pieces of legislation, says the Trinidad and Tobago Transparency Institute (TTTI), this country’s scoring on the Corruption Perception Index (CPI) will remain stagnant.

Publicly listed TTNGL’s profits declined last year because the international prices of its three products—natural gas liquids propane, butane and natural gasoline—have tumbled, said Dominic Rampersad, president of Phoenix Park Gas Processors Ltd (PPGPL) yesterday.