UNAUDITED FINANCIAL STATEMENTS SIX MONTHS | ENDED 31 MARCH 2021
138 STUDENT LIVING JAMAICA LIMITED UNAUDITED FINANCIAL STATEMENTS SIX MONTHS | ENDED 31 MARCH 2021
INDEX
PAGE
CHAIRMAN’S INTERIM REPORT TO THE SHAREHOLDERS 1-3
UNAUDITED FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income 4
Consolidated Statement of Financial Position 5
Consolidated Statement of Changes in Shareholders’ Equity 6
Consolidated Statement of Cash Flows 7
Notes to the Financial Statements 8-9
Top 10 Largest Shareholders 10
Page 1 CHAIRMAN’S INTERIM REPORT TO THE SHAREHOLDERS
The Board of Directors of 138 Student Living Jamaica Limited (138 SL) presents below its unaudited consolidated financial statements for the six months ended 31 March 2021.
Overview
For the three-month period ending 31 March 2021, the Group recorded profit before taxation of $90 million and an tax profit of $101 million compared to profit before taxation of $69 million and after-tax profit of $87 million for the quarter ended March 31, 2020. The results of the quarter are positively impacted by the recording of the 90% Occupancy Guarantee under the Concession Agreement.
During the period under review, 138SL operated 1,464 world-class rooms at its four (4) locations on the UWI Mona Campus consisting of 1,692 beds. Whilst the Covid-19 pandemic continues to negatively impact the business operations, there has been a steady growth in occupancy since the start of the January 2021 academic semester. Occupancy increased from an average of fifteen percent (15%) to an average of forty five percent (45%). Management is optimistic that this trend will continue upon the commencement of the upcoming academic year. With the introduction of the vaccination programme, it is anticipated that more face-to-face classes will resume which will increase the demand for student accommodation.
Page | 2 Financial Highlight
Overall, revenue decreased by 2% while expenses decreased by 10% when compared to prior year. The 10% reduction in expenses is primarily due to the reduction in utilities.
Covid-19 Impact and Response
Management places high priority on the health and safety of our employees and residents, demonstrated through measures that were implemented. During the period, management continued to enforce the safety measures that were previously established. These measures allowed us to ensure the safety of our staff and residents and to continue in operation within the space of the new normal.
The Management of 138SL continues to manage the business within the current realities. The following measures previously implemented remains in force:
I. Consolidation of halls of residence thus reducing utilities and staff costs (primarily security and housekeeping which forms our largest staff classifications).
II. Deferral of capital expenditure.
III. Rationalizing maintenance activities to only essential requirements.
3 months ended 31 March 2021 3 months ended 31 March 2020 Q-O-Q CHANGE % 6 months ended 31 March 2021 6 months ended 31 March 2020 Y-T-D CHANGE % $'000 $'000 $'000 $'000 $'000 Revenue 282,506 289,212 (2) 558,600 753,157 (26) Expenses 136,929 152,565 10 278,644 357,574 22 Finance Costs 55,457 66,789 17 114,563 134,470 15 Operating Profit 90,120 69,858 29 165,393 261,113 (37) Taxation 10,752 17,478 (38) 1,401 9,086 (85)
Page | 3 IV. Seeking opportunities for new sources of revenue during this period.
V. Discussions with our bankers and financers to negotiate financing options to mitigate the impact of the Covid-19 pandemic on the business operations.
The team remains motivated not just to contain cost, but also to grow revenues from the short-term rental business. We see the short-term rental business as an opportunity for increased revenue and will continue our efforts to grow this business portfolio. We remain committed to our long-term strategic goal of delivering long term shareholder value.
We express gratitude to our team members who continue to deliver above expectations even in these very difficult times. To our residents we are thankful for your continued support. May you continue to be blessed with good health.
Ian Parsard Chairman
Page | 4 UNAUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
SIX MONTHS | ENDED 31 MARCH 2021
Note 3 months ended 31 March 2021 3 months ended 31 March 2020 6 months ended 31 March 2021 6 months ended 31 March 2020 J$'000 J$'000 J$'000 J$'000 REVENUE Income 267,072 278,350 522,635 733,590
Other Operating Income 15,434 10,862 35,965 19,567
282,506 289,212 558,600 753,157
EXPENSES
Administrative Expenses 136,929 152,565 278,644 357,574
PROFIT FROM OPERATIONS 145,577 136,647 279,956 395,583
Finance Costs 55,457 66,789 114,563 134,470
PROFIT BEFORE TAXATION 90,120 69,858 165,393 261,113
Taxation 10,752 17,478 1,401 9,086
NET PROFIT FOR THE PERIOD 100,872 87,336 166,794 270,199
Other Comprehensive Income
Change In Fair Value of Financial Asset - (191) - (191)
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 100,872 87,145 166,794 270,008
Page | 5 UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT MARCH 31, 2021
IAN PARSARD SHARON DONALDSON-LEVINE
CHAIRMAN DIRECTOR
Unaudited Unaudited Audited
31-Mar-21 31-Mar-20 30-Sep-20
J$'000 J$'000 J$'000
NON-CURRENT ASSETS
Financial Asset -Service Commission Rights 8,870,005 10,185,589 8,861,443
Motor Vehicle 2,081 2,704 2,392
Deferred Tax Asset 244,311 238,378 267,830
Other Asset 3,849 3,891 3,850
9,120,246 10,430,562 9,135,515
CURRENT ASSETS
Receivables 914,494 418,278 619,946
Taxation Recoverable 24,733 23,413 24,509
Short Term Deposits 6,032 261,069 258,561
Cash and Cash Equivalents 22,105 9,063 43,484
967,364 711,823 946,500
10,087,610 11,142,385 10,082,015
EQUITY AND LIABILITIES
Share Capital 721,153 721,153 721,153
Fair Value Reserve 3,403,391 4,731,238 3,403,391
Retained Earnings 576,757 363,382 409,963
4,701,301 5,815,773 4,534,507
NON-CURRENT LIABILITIES:
Long Term Loans 4,035,612 4,005,290 4,206,004
Redeemeable Preference Shares 172,643 172,643 172,643
4,208,255 4,177,933 4,378,647
CURRENT LIABILITIES:
Payables 827,649 602,305 825,179
Taxation 17,723 10,497 42,644
Current Portion of Long Term Loan 192,142 388,527 135,000
Short term Borrowing 140,539 147,350 166,038
1,178,054 1,148,679 1,168,861
Page | 6 UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE PERIOD ENDED 31 MARCH 2021
SHARE FAIR VALUE RETAINED
CAPITAL RESERVE EARNINGS TOTAL
J$’000 J$’000 J$’000 J$’000
TOTAL COMPREHENSIVE INCOME
Balance at 30 September 2019 721,153 4,731,428 93,184 5,545,765
Change in Fair Value of Financial Asset- - (191) - (191) Profit for the period - - 270,199 270,199
Balance at 31 March 2020 721,153 4,731,237 363,383 5,815,773
Change in Fair Value of Financial Asset- - (1,327,846) - (1,327,846) Profit for the Period - - 46,580 46,580
Balance at 30 September 2020 721,153 3,403,391 409,963 4,534,507
TOTAL COMPREHENSIVE INCOME
Change in fair value of financial assets - - - -Profit for the Period - - 166,794 166,794
Page | 7 CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX-MONTH PERIOD ENDED 31 MARCH 2021
Unaudited Unaudited Audited
31-Mar-21 31-Mar-20 30-Sep-20
J$'000 J$'000 J$'000
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit 166,794 270,199 316,779
Items not Affecting Cash Resources:
Effects of Foreign Exchange Gains - - (1,799)
Deferred Taxation (1,401) (9,086) (6,410) Interest Income (674) (3,590) (7,875) Interest Expense 114,563 130,154 257,358 Depreciation 312 312 624 Loss on Disposal - - 10 279,594 387,989 558,687
Changes in Operating Assets and Liabilities:
Other Assets 1 (128) (87)
Receivables (127,308) (181,128) (323,245)
Taxation Recoverable (223) (643) (1,739)
Payables (100,913) (14,100) 90,679
(228,443) (195,999) (234,392)
Net cash provided by operating activities 51,151 191,990 324,295
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to Financial Asset - Service Concession Rights (8,562) (5,919) (10,071)
Additions to Motor Vehicle - - 690
Short Term Deposits 252,528 (1,818) 7,661
Interest Received 1,499 2,424 (189,583)
Interest Paid (179,246) (120,952) 60
Net Cash Provided by/Used in Investing Activities 66,219 (126,265) (191,243)
CASH FLOW FROM FINANCING ACTIVITIES:
Short Term Loans (3,488) 195,681
-Loan Repaid (135,262) (301,459) (139,905)
Net Cash Used in Financing Activities (138,750) (105,778) (139,905)
Net decrease in cash and cash equivalents (21,379) (40,053) (6,853)
Exchange Gain on Foreign Cash Balance - - 1,221
Cash and Cash Equivalents at Start of The Period 43,484 49,116 49,116
Page | 8 NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2021
1. IDENTIFICATION AND PRINCIPAL ACTIVITIES:
(a) 138 Student Living Jamaica Limited (138 SL) is a limited liability company. The company was incorporated in Jamaica on 15 August 2014 and is domiciled in Jamaica. The registered office of the company is located at 2 Castries Drive, UWI Mona, Kingston 7.
(b) The company is established to construct and rent living facilities at the University of the West Indies under a 65-year concession agreement granted by the University of the West Indies.
(c) The company, (138SL), is a public listed company and was listed on the Jamaica Stock Exchange on 18 December 2014.
(d) The company has a 100% subsidiary, 138SL Restoration Limited, a limited liability company, incorporated in Jamaica on 31 April 2015 and domiciled in Jamaica and which has a 35-year concession agreement. The concession was granted by the University of the West Indies, Mona, for the restoration and reconstruction of certain Traditional Halls.
2. REPORTING CURRENCY:
Items included in the financial statements of the company are measured using the primary economic environment in which the company operates (“the functional currency”). These financial statements are presented in Jamaican dollars which is considered the company’s functional and presentation currency.
3. BASIS OF CONSOLIDATION:
The consolidated financial statements combine the financial position, results of operations and cash flows of the Company and its subsidiary, 138SL Restoration Limited.
4. SIGNIFICANT ACCOUNTING POLICIES:
The financial statements are prepared in accordance with International Financial Reporting Standards (IFRSs), their interpretations issued by the International Accounting Standards Board and have been prepared under the historical cost convention as modified by revaluation of financial asset – services concession rights. The financial statements also comply with the provisions of the Jamaican Companies Act.
The principal accounting policies applied in the preparation of these unaudited financial statements are consistent with those used in the audited financial statements for the year ended 30 September 2020 and comply with the requirements of the International Financial Reporting
Page | 9 Standards (IAS 34, Interim Financial Reporting). Where necessary, prior year comparatives have been restated and reclassified to conform to current year presentation.
An entity shall apply IFRS 16 to all leases, including leases of right-of-use assets in a sublease, except for Service Concession Arrangements within the scope of IFRIC 12 Service Concession Arrangements, accordingly IFRS 16 is not applicable to the company.
5. ACCOUNTING ESTIMATES AND JUDGEMENTS
Certain amounts recorded in these unaudited consolidated financial statements reflect estimates and assumptions made by management. Actual results may differ from the estimates and assumptions made. Interim results are not necessarily indicative of full year results.
6. EARNINGS PER STOCK UNIT: Profit per stock unit
Profit per stock unit is calculated by dividing the net profit attributable to stockholders by the weighted average number of ordinary stock units in issue.
3 months ended 31 Mar 2021 J$ 000 3 months ended 31 Mar 2020 J$ 000 6 months ended 31 Mar 2021 J$ 000 6 months ended 31 Mar 2020 J$ 000 Net profit attributable to
stockholders 100,872 87,145 166,794 270,199
Weighted average number of
ordinary stock units (‘000) 414,500 414,500 414,500 414,500
Page | 10
138 STUDENT LIVING JAMAICA LIMITED QUARTERLY REPORT AS AT 31 MARCH 2021
TOP TEN (10) LARGEST SHAREHOLDERS
SHAREHOLDER NO. OF SHARES TOTAL NO. OF SHARES
PERCENTAGE SHAREHOLDING
SAGICOR 167,686,187 40.46%
JCSD TRUSTEE SERVICES LTD - SIGMA GLOBAL VENTURE 14,950,000
SAGICOR POOLED MORTGAGE & REAL ESTATE FUND 16,233,333
JCSD TRUSTEE SERVICES LTD - SIGMA EQUITY 44,688,334
SAGICOR POOLED EQUITY FUND 91,814,520
NCB INSURANCE CO. LTD. A/C WT040 82,832,770 19.98%
K LIMITED 68,803,832 16.60%
BARITA INVESTMENTS 13,853,075 3.34%
BARITA FINANCE LIMITED 2,878,150
JCSD TRUSTEE SERVICES LIMITEDA/C BARITA UNIT TRUST REAL ESTATE PORTFOLIO 10,974,925
WISYNCO GROUP LIMITED PENSION FUND 10,000,000 2.41%
DOUGLAS O. STIEBEL/CHRISTINE STIEBEL 7,776,341 1.88%
BARRINGTON PHILLIP BROWN 7,334,592 1.77%
CLAUDETTE COOKE 5,330,000 1.29%
JMMB PENSION FUND 3,773,734 0.91%
MF&G ASSET MANAGEMENT LTD. - JAMAICA INVESTMENTS FUND 3,761,300 0.91%
TOTAL 371,151,831 89.54%
138 STUDENT LIVING JAMAICA LIMITED
For purposes of compliance with Rule 407 of the Jamaica Stock Exchange Rules, details of stockholdings of Directors and Senior Management and their connected persons as at 31 MARCH 2021 are set out hereunder:
SHAREHOLDINGS OF DIRECTORS AND CONNECTED PARTIES
DIRECTORS SHAREHOLDING CONNECTED PARTIES SHAREHOLDING
IAN PARSARD NIL IAN PARSARD/KAREN PARSARD 1,000,000
JOHN W. LEE NIL K LIMITED 68,803,832
IVAN CARTER NIL
SHARON DONALDSON 100,000
MARRYNETTE LEE NIL K LIMITED 68,803,832
BRENDA-LEE MARTIN NIL
PETER PEARSON NIL PETER/YVONNE PEARSON 400,000
SHAREHOLDINGS OF SENIOR MANAGEMENT AND CONNECTED PARTIES
SENIOR MANAGEMENT SHAREHOLDING CONNECTED PARTIES SHAREHOLDING
CRANSTON EWAN NIL
SEMOUR MILLEN NIL
DOMINIQUE MILLEN/ANTOINE
MILLEN/ANIYAH MILLEN NIL
RENELLE WILSON-PEARSON NIL ELVIS PEARSON NIL
COMPANY SECRETARY SHAREHOLDING CONNECTED PARTIES SHAREHOLDING