quarterly...revenues for the quarter were $361.7 million, which is 5.9% higher than we had ... trade...
TRANSCRIPT
1 Directors' Statement
2 Unaudited Financial Statements
3 Notes to the Financial Statements
4 Top 10 Shareholders
R E P O R T
GROUP
QuarterlyQ4 | 2019
5 Directors' and Senior Officers' Shares
1 | Directors ' Statement
OVERVIEW
The Board of Directors of Mailpac Group Limited is pleased to present our first set of
financial statements as a publicly listed company. The information provided is the
unaudited financial statements for the quarter ended December 31, 2019. It should be
noted that Mailpac Group Limited started trading on October 1, 2019. Accordingly, the
financial statements represent the first three months of operations for the Company.
FINANCIAL PERFORMANCE
Revenues for the quarter were $361.7 million, which is 5.9% higher than we had
projected in our IPO Prospectus. Gross Profit for the quarter was $181.7 million,
surpassing the $176.8 million projected in our IPO Prospectus.
Operating expenses for the quarter were $86.9 million, comprised mostly of staff costs,
advertising expenses, and store operating expenses. Profit before tax for the quarter,
which also came in higher than was projected, was $85.2 million.
We are encouraged by the performance of the Company in its first quarter of operation
as it surpassed our expectations on all metrics represented in the IPO Prospectus. The
amalgamation of the Mailpac Services and Mailpac Local business lines has created
significant momentum and operating efficiencies for Mailpac Group Limited.
FINANCIAL POSITION
Total Assets at the end of the quarter stood at $447.9 million, with $106.5 million of
cash on the balance sheet at the end of the period. Shareholder’s Equity stood at
$341.9 million at the end of 2019. The Company had no long-term debt at the end of
the period other than the $12.7 million owed to Norbrook Equity Partners.
MAILPAC GROUP LTD Q4 - QUARTERLY REPORT | 1
OUTLOOKWe are pleased with the performance of Mailpac Group Limited in its first quarter of
operation. The Company continues to lead the ecommerce market and surpassed our
IPO projections for the quarter under review on all meaningful metrics. We expect the
Company to continue benefitting from the rapid growth of online shopping in
Jamaica, as well as its unique shopping tools. These include free returns, its tax-free
address and its landed price tool. We want to thank our dedicated team and our
customers for their continued support.
Mr. Khary Robinson Executive Chairman
MAILPAC GROUP LTD Q4 - QUARTERLY REPORT | 2
2 | Unaudited Financial Statements
Statement of Financial Position Three (3) months period ended 31 December 2019
Note 2019$
3 244,119,131 30,787,029
4 12,455,805 287,361,965
5 49,305,918 1,687,977 3,031,874
106,521,716 160,547,485
447,909,450
6 267,356,112 74,520,508
341,876,620
4 6,400,312 12,698,000 19,098,312
4 6,027,717 64,889,527
608,964 1,419,195 3,324,359
7 10,664,756 86,934,518
ASSETSNon-current AssetsIntangible assetsProperty, plant and equipmentRight-of-use assetTotal non-current assets
Current AssetsTrade and other receivablesDue from related companiesPrepaymentsCash and cash equivalentsTotal current assetsTOTAL ASSETS
EQUITY AND LIABILITIESEquity Share capitalAccumulated surplusTotal equity
Non-current LiabilitiesLease liabilityDue to related companiesTotal non-current liabilities
Current LiabilitiesLease liabilityTrade and other payablesNote payable to parent companyDue to directorsDue to related companiesTaxation payableTotal current liabilitiesTOTAL EQUITY AND LIABILITIES 447,909,450
KHARY ROBINSON, EXECUTIVE CHAIRMAN GARTH PEARCE, DIRECTOR
Statement of Comprehensive IncomeThree (3) months period ended 31 December 2019
2 | Unaudited Financial Statements
MAILPAC GROUP LTD Q4 - QUARTERLY REPORT | 4
Note 2019$
Revenues 361,726,810 180,002,525 181,724,285
72,225,213 14,744,088
86,969,300 94,754,985
845,175 95,600,160
10,414,896 85,185,264
7 10,664,756 74,520,508
Cost of salesGross profit
Administrative and general expensesSelling and promotion
Operating profit
Other income
Finance and policy costsProfit before taxation
Taxation charge Net profit, being total comprehensive income for the period
Earnings per share for profit attributable to the ordinary equity holders of the company 8 0.03
Statement of Changes in EquityThree (3) months period ended 31 December 2019
2 | Unaudited Financial Statements
MAILPAC GROUP LTD Q4 - QUARTERLY REPORT | 5
Share Accumulated Capital Surplus Total
$ $ $
27,395,000
239,961,112
- 74,520,508
- 27,395,000
- 239,961,112
74,520,508
Balance at October 1, 2019
Issue of shares, net of transaction cost
Net profit, being total comprehensive income for the three months periodBalance at December 31, 2019 267,356,112 74,520,508 341,876,620
Statement of Cash FlowsThree (3) months period ended 31 December 2019
2 | Unaudited Financial Statements
MAILPAC GROUP LTD Q4 - QUARTERLY REPORT | 6
2019$
74,520,508CASH FLOWS FROM OPERATING ACTIVITIES:Profit for the periodAdjustments for items not affecting cash resources:
2,293,773 Depreciation and amortization Taxation expense 10,664,756
87,479,036
Increase in operating assets: (1,687,977) Due from related companies
Trade and other receivables (52,337,793)
64,889,529 98,342,796
- 98,342,796
Increase in operating liabilities: Trade and other payablesCash flows provided by operating activities
Taxation paidNet cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES (244,579,000) Acquisition of intangible assets
Acquisition of right of use asset (13,855,278) (46,226,461) (304,660,739)
Acquisition of property, plant and equipmentNet cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES 267,356,112
16,022,359 608,964
1,419,195
Net proceeds from issue of shares Related company loan (net) Loan from related party Loan from director Lease liability for right of use 12,428,029
297,834,659
91,516,716
15,005,000
Net cash provided by financing activities
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS - Beginning of the period
CASH AND CASH EQUIVALENTS - End of the period 106,521,716
3 | Notes to the Financial Statements
1. IDENTIFICATION
Mailpac Services Limited (the "Company") is a limited liability company incorporated in Jamaica on
September 19, 2019, under the Jamaican Companies Act (the "Act"). The Company is domiciled in
Jamaica with its registered office at 109 Old Hope Road, Kingston 6. The operations of Mailpac Group
Limited were previously undertaken under by two separate entities, Mailpac Services Limited and Mailpac
Local Limited. On September 30, 2019, the net assets of these two entities were purchased by Mailpac
Group Limited. In addition, Mailpac Group Limited acquired the long-term liabilities of Mailpac Services
Limited.
Mailpac Group Limited became publicly listed on the Junior Market of the Jamaica Stock Exchange on
December 4, 2019. Consequently, the Company is entitled to a 100% remission of income taxes for the
first five (5) years and 50% remission for the next five (5) years thereafter, providing that the Company
complies with the requirements of the Jamaica Stock Exchange Junior Market.
The principal activities of the Company are to provide international and domestic courier and mail order
services as well as online shopping of a variety of food, beverages and other household supplies.
2. STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION
These unaudited financial statements for the three (3) months period ended December 31, 2019 have
been prepared in accordance with IAS 34, "Interim financial reporting" and in compliance with
International Financial Reporting Standards ("IFRS") and the relevant requirements of the Act.
The unaudited financial statements have been prepared under the historical cost basis and are expressed
in Jamaican dollars, unless otherwise indicated.
The Company has adopted IFRS 16 (Leases) from October 1, 2019. IFRS 16 introduces a single lease
accounting model for lessees. It requires lessees to recognise a lease liability reflecting future lease
payments and a "right-of-use asset" for virtually all lease contracts. The standard includes an optional
exemption for certain short-term leases and leases of low-value assets. For lessors, the accounting stays
almost the same.
Each lease payment is allocated between the liability and finance cost. The finance cost is charged to
profit or loss over the lease period so as to produce a constant periodic rate of interest on remaining
balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the
asset's useful life and the lease term on a straight-line basis.
MAILPAC GROUP LTD Q4 - QUARTERLY REPORT | 7
3 | Notes to the Financial Statements
3. ACCOUNTING POLICIES
(a) Intangible assets
Intangible assets which represents goodwill, contracts rights with vendors, customers, trade names,
intellectual property rights, telephone numbers are deemed to have an infinite life. These assets are
carried at fair value. The Company determines when intangible assets are impaired at least on an
annual basis or when events or circumstances indicates that the carrying value may be impaired.
Intangible assets, except for goodwill, are amortized over the estimated useful lives of the assets of
forty (40) years.
(b) Leases
A contract is, or contains, a lease if it conveys the right of use/control the use of an identified asset for
a period of time in exchange for consideration. Control is conveyed where the customer has both the
right to direct the identified asset’s use and to obtain substantially all the economic benefits from that
use. Leases are recognise as assets and liabilities unless the lease term is 12 months or less or the
underlying asset has a low value of less than US$5,000 or its Jamaica dollar equivalent. The right-of-
use asset is initially measured at cost, at the lease commencement date, i.e. the date at which the
underlying asset is available for use by the Company. The right-of-use asset is depreciated on a
straight-line basis over the remaining lease term. It is subject to impairment test.
Lease liability
The lease liability is initially measured at the present value of lease payments to be made over the
lease term. The present value of lease payments, uses an incremental borrowing rate at the
commencement date if the interest rate implicit in the lease is not readily determinable. The
incremental borrowing rate corresponds to the rate that the lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value in a similar economic environment, with similar
terms and conditions.
(c) Trade and other receivables
Trade and other receivables are stated at amortized cost. Appropriate allowances for estimated
irrecoverable amounts are recognized in the statement of comprehensive income when there is
objective evidence that the asset is impaired.
(d) Related party identification
A related party transaction is a transfer of resources, services or obligations between related
parties, regardless of whether a price is charged.
(e) Trade and other payables
Trade and other payables are stated at amortized cost.
MAILPAC GROUP LTD Q4 - QUARTERLY REPORT | 8
3 | Notes to the Financial Statements
3. INTANGIBLE ASSETS
2019
As at September 30, 2019, Mailpac Group Limited acquired the net assets of Mailpac Local Limited
and Mailpac Services Limited. Mailpac Group Limited also acquired the long-term liabilities of
Mailpac Services Limited. Goodwill acquired on this acquisition was approximately$171 million.
Intangible assets are carried at amortized cost and depreciated over a 40-year useful life.
$
Purchase goodwillCustomer contracts, lists of existing customers and other intangibles
Amortization:Balance at October 1, 2019Charge for the period
Balance at period end
4. RIGHT-OF-USE ASSETSOffice
Building$At Valuation
Additions
Balance at December 31, 2019
Depreciation charge of right-of use asset Charge for period
Balance at December 31, 2019
Net Book ValueBalance at December 31, 2019
Lease Liability:
Non-current lease liability
Current lease liability
MAILPAC GROUP LTD Q4 - QUARTERLY REPORT | 9
Cost
171,000,000 73,579,000
244,579,000
- 459,869
459,869
244,119,131
13,855,278
13,855,278
1,399,473
1,399,473
12,455,805
2019$
6,400,312
6,027,717
3 | Notes to the Financial Statements
5. TRADE AND OTHER RECEIVABLESAccounts receivable materially represents balance due on credit sales
2019$
Trade receivables Less : expected credit loss provision
Net trade receivables
Other receivables
MAILPAC GROUP LTD Q4 - QUARTERLY REPORT | 10
48,743,827 (1,434,394)
47,309,433
1,996,485 49,305,918
6. SHARE CAPITAL
(a) The issued share capital of the Company was increased to 2,250,000,000 shares prior to the initialpublic offering ("IPO"). An additional 250,000,000 new shares were offered to the general public inthe IPO on December 4, 2019.
(b) The proceeds of the sale of the 250,000,0000 shares issued to the general public in December 2019amounted to $250,000,000 less transaction cost of $10,038,888.
2019
74,520,508Net profit attributable to shareholdersWeighted average number of shares in issue 2,331,521,739
0.03$
9. DIVIDENDSThe Company did not declare any dividends during the period ended December 31, 2019.
7. TAXATION
Taxation charge is computed on the Company's net profit between October 1, 2019 and December 3, 2019,
prior to the Company being listed on the Junior Market of the Jamaica Stock Exchange.
8. EARNINGS PER SHARE
The calculation of earnings per share is based on the profit after taxation and the weighted average number
of shares in issue during the year.
4 | Top Ten Shareholders
Disclosure of Shareholdings As at 31 December 2019
NORBOOK EQUITY PARTNERS LTD 77.6000%1,940,000,000
NCB CAPITAL MARKETS (CAYMAN) LTD 87,831,925 3.5133%
NCB INSURANCE COMPANY LIMITED 42,446,567 1.6979%
JCSD TRUSTEE SERVICES LTD - SIGMA EQUITY 28,412,255 1.1365%
JMMB FUND MANAGERS LTD.T1- EQUITIES FUND 25,000,000 1.0000%
MF&G TRUST & FINANCE LTD - A/C 57 25,000,000 1.0000%
JCSD TRUSTEE SERVICES LTD - SIGMA GLOBAL VENTURE
21,139,026 0.8456%
SAGICOR SELECT FUND LIMITED - ('CLASS C' SHARES) MANUFACTURING & DISTRIBUTION
20,139,026 0.8056%
10,000,000 0.4000%
7,000,000 0.2800%KERRIE SIMONE BAYLIS
PercentagePrimary Account Holder VolumeJoint Holder(s)
Total Issued Capital:
Total Units Owned by Top 10 Shareholders:
Percentage Owned by Top 10 Shareholders:
2,500,000,000
2,206,968,799
88.2788%
VERNON ST. GLEN JAMES
KIMANI SECU ROBINSON
MAILPAC GROUP LTD Q4 - QUARTERLY REPORT | 11
5 | Directors & Senior Officers Shares
Disclosure of Shareholdings As at 31 December 2019
KHARY ROBINSON 77.9911% 1,949,777,700
77.6600%GARTH PEARCE 1,940,000,000
SAMANTHA RAY 5,100,000 0.2040%
MARK JOSE GONZALES 4,444,400 0.1778%
WILLIAM A. CRAIG 7,000,000 0.2800%
277,500 0.0111%
167,900 0.0067%
61,100 0.0024%
Primary Account Holder Connected Parties
Norbrook Equity Partners LtdLennox RobinsonMarcia C. Robinson
1,940,000,000 5,000,000
4,777,700
Norbrook Equity Partners Ltd 1,940,000,000
Candis M. CraigBilly Craig Insurance Brokers Ltd 3,000,000
0.1600%TRACY-ANN NICOLE SPENCE 3,999,800
Sean Andre Spence
MAILPAC GROUP LTD Q4 - QUARTERLY REPORT | 12
CHRISTEEN MARLINE ALLEN
TOMMY WALTERS
TONI MELVINA WHITEHORNE
DARLENE JOHNSON_ _
Direct Holdings
_
SENIOR OFFICERS
DIRECTORS
___
__
_
_
4,000,000
5,100,000
4,444,400
3,999,800
277,500
167,900
61,100
_
SAMANTHA RAY
MARK JOSE GONZALES
___ 5,100,000 0.2040%
4,444,400 0.1778%
5,100,000
4,444,400
_
Combined Volume Percentage