RATING DRIVERS
Supporting Factors:
- Strong competitive position in property management supported a diversified and resilient real estate portfolio
- Continued high occupancy levels support revenue growth, while ‘business interruption’ insurance reduces the risk of lower income from property damage
- Financial performance negatively impacted by COVID-19 pandemic, as expected with a slight rebound in the 2nd quarter of 2021
- Adequate liquidity and debt servicing capability supported by sufficient cash balances and sizeable portfolio of marketable assets
- Seasoned management team alongside a strong board of directors
Constraining Factors:
- Continued high reliance on dividend income from associated companies
- Challenging economic conditions in Jamaica present significant downside risks to PanJam’s financial operations
Rating Sensitivity Factors:
Factors that can lead to an improvement in the ratings and/or outlook include:
- An improvement in the ratings of the Government of Jamaica
Factors that can lead to a lowering of the ratings and/or outlook include:
- Fall in occupancy below the break-even level of 50%
- Continued economic uncertainty leading to ongoing losses in investment income and a pause on ongoing construction projects which can result in a fall in total operating revenue by over 65%
- A significant decline of 60% or greater in SGJL’s dividend income.
- A sustained effective DSCR of less than 1.5 times over a 2-year period
COMPANY BACKGROUND
PanJam Investment Limited (PanJam or the Company) is an investment holding company, incorporated and domiciled in Jamaica and listed on the Jamaica Stock Exchange (JSE). Jamaica Property Company Limited (Jamaica Property) was formed in 1964 by Mr. Cecil Facey and the Facey family, with a focus on real estate development in Kingston. During that same year, Pan-Jamaican Investment Trust Limited (PanJam) was formed by Mr. Clinton Hart, with the dual purpose of investing in a wide range of Jamaican businesses and providing ordinary Jamaicans with the ability to participate in those investments. In 1965, PanJam was listed on the Kingston (Jamaica) Stock Exchange and raised £200,000 through a public offering. In 1966, Jamaica Property became a wholly-owned subsidiary of PanJam and Mr. Maurice Facey became its Managing Director and eventually its Chairman. The merged entity embarked upon the development of high-rise commercial and residential properties which included: the Air Jamaica Building in downtown Kingston, the Imperial Life Building on Knutsford Boulevard, and the Abbey Court Apartments on Hope Road.
In the 1980s, PanJam began diversifying its portfolio and invested in the manufacturing and trading industry with the acquisition of Wherry Wharf. The Company also expanded its investments into the tourism and export markets with the acquisition of Sans Souci Hotel and Resort and Jamaica Floral Exports, as well as a controlling interest in Scott’s Preserves Limited. During this period PanJam also made investments in the financial services industry with the establishment of First Life Insurance Company and the acquisition of a 20% stake in Pan Caribbean Merchant Bank. These two transactions have since evolved, through a series of strategic restructurings, into a 30.2% holding of Sagicor Group Jamaica Limited (SGJL), one of the Company’s largest investment holdings as at September 30, 2021. To date, PanJam’ executives inclusive of the Chief Executive Officer (CEO) and Deputy CEO have an average tenure of 17 years at PanJam.
PanJam engages in a wide range of real estate activities, takes actively managed positions in public and private companies, and trades equities and fixed income assets for its proprietary portfolio. The Company’s revenue consists mainly of rental income and management fees from its property holdings; this accounted for 80.1% of total revenue over the 2018-2020 period. PanJam also derives income from dividends, interest income, and other fee income from its subsidiaries (Table 1) and other financial investments.
Analytical Contacts:
Jeffrey James
Tel: 1-868-627-8879 Ext. 236
E-mail: jjames@caricris.com
Anelia Oudit
Tel: 1-868-627-8879 Ext. 226
Mobile: 1-868-487-8364
E-mail: aoudit@caricris.com
Website: www.caricris.com
Email: info@caricris.com
Disclaimer: CariCRIS has taken due care and caution in compilation of data for this product. Information has been obtained by CariCRIS from sources which it considers reliable. However, CariCRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. No part of this report may be published / reproduced in any form without CariCRIS’ prior written approval. CariCRIS is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of this product.