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Proven's US$1m shopping spree

Proven’s US$1m shopping spree

Camilo Thame | Jamaica Observer

PROVEN Investment Limited has spent just under US$1 million ($88 million) in its latest round of expansion, which is largely being backed by the near-$1 billion it raised from an issuance of preference shares last December.

Proven acquired hire purchase lender, Asset Management Company Limited (AMCL), and got its real estate investment trust — Proven REIT — off to a start in February, when it bought an apartment complex.

According to its latest financial statements, the investment management company paid US$393,000 in cash for AMCL, which owns the Easy Own brand that allows consumers to purchase furniture and major appliances on hire purchase from participating vendors, while the purchase price for its investment property was US$551,000 with an additional transaction cost of US$24,000.

The apartment building was a deal by Proven CEO Chris Williams’s account, given that they got a considerable discount on the property. Its revaluation resulted in a gain of US$179,000 being realised in the company’s profit and loss for the financial year that ended March 31, 2012, for which it posted a net profit of U$3.3 million.

The most recent profits represented a 50 per cent decline on the previous year’s profit, but a US$5-million gain from the acquisition of Asset Management Jamaica (renamed Proven Wealth) was included then.

Without that Proven’s net profit would have represented an increase of 15.4 per cent over the previous year.

Williams said the REIT’s strategy is to buy properties that are already developed and tenanted as well as taking advantage of its cash position to get deals, while the focus for the hire purchase company, which currently offers its services through seven retailers with a total of 22 stores islandwide, is to expand the product offerings and reach.

“For most of the locations, the percentage of sales under hire purchase is very small,” Williams told the Jamaica Observer. “These stores want to grow their hire purchase and increase their sales. There are a lot more shoppers that can buy with hire purchase than those who can buy with cash. They are missing out on a huge segment of the market.”

Leading up to the preference share issue last December, Williams had said that the proceeds would also be used to acquire a minority stake in a tourism company, but that deal fell through.

Proven still has a view to take equity position in tourism, but it is also targeting health care and security alongside real estate and finance services in Jamaica, Cayman, Dominica, Barbados and Trinidad.

 

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