Shareholders of Productive Business Solutions Limited (PBS) will likely have to wait until the end of October before trading in the company’s shares can resume. This delay follows the suspension of PBS’s shares on July 2, after the company failed to file its 2023 audited financials on time. The company has attributed the delay to ongoing issues in completing these financials, which were initially due on March 30.
PBS had been granted a 90-day grace period to submit the documents, but with that deadline now expired and the financials still incomplete, the Jamaica Stock Exchange (JSE) moved to suspend the trading of PBS’s ordinary and preference shares. PBS subsequently announced that it expects to submit its audited financials by October 31, seven months past the original deadline. The company’s annual report has also been delayed and is now expected by November 15.
The delay in finalizing PBS’s audited financials is linked to additional audit procedures stemming from the need to restate material accounting transactions by one of its subsidiaries in Costa Rica. According to PBS, these restatements are expected to primarily affect its consolidated financial statements for accounting periods before 2021. The company has not yet provided a detailed explanation for these restatements.
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PBS operates across more than 21 markets and employs over 3,000 people, necessitating comprehensive audits of each subsidiary to compile the consolidated financial statements. The company is a major distributor of printing equipment, business machines, handsets, and software products from leading brands such as Google, Xerox, Cisco, and Microsoft. It also plays a key role in maintaining ATM and point-of-sale (POS) software.
In recent months, PBS has made several strategic acquisitions, including the Infotrans Group Holding BV in Curaçao, and a 45% stake in Trinidad Systems Group Limited (TSL) for US$6.08 million. Additionally, PBS completed acquisitions of Xerox del Peru, SA, and Xerox del Ecuador, SA on July 1, with the financial details of these transactions to be disclosed later. These acquisitions were supported by a US$126 million syndicated loan from Citibank NA, aimed at refinancing existing debts and enhancing PBS’s liquidity.
Despite the suspension, PBS’s preference shares, including the 9.75% preference shares set for redemption on July 31, have not been delisted. While PBS has not declared an ordinary dividend this year, it has announced dividends for its preference shares. The 9.25% preference shares will pay a dividend of US$346,875 (US$0.23125 per share), and the 10.50% preference shares will distribute J$12,945,205.48 (J$25.8904 per share) to investors, with payments scheduled for September 30.
PBS’s unaudited results for the second quarter of 2024 revealed a 39% increase in revenue to US$102 million, with gross profit rising 8% to US$27.75 million. However, gross profit margins were compressed from 35.13% to 27.21%. Higher operational expenses led to a 7% decline in operating profit to US$6.58 million, while EBITDA stood at US$11.07 million. After accounting for increased taxes, PBS’s consolidated net profit fell 27% to US$1.92 million, with US$1.89 million attributable to shareholders.
For the first half of the year, PBS reported a 4% increase in revenue to US$167.90 million and a gross profit of US$51.14 million. Operating profit dropped 17% to US$10.75 million, and consolidated net profit declined 44% to US$2.46 million, with US$2.36 million attributable to shareholders.
PBS’s total assets at the end of June were valued at US$399.19 million, with intangible assets and trade receivables each accounting for approximately US$101.6 million. Total liabilities and equity attributable to shareholders stood at US$300.71 million and US$97.32 million, respectively.
Despite these setbacks, PBS remains optimistic about its future prospects. “We are witnessing the highest level of demand for our products and services in our history,” stated the PBS report, signed by the chairman and CEO. “The demand is broad-based and spans most of our markets, product categories, and customer segments, reflecting the long-term enduring trend of increased information technology investment in our region. PBS’s strong pipeline aligns closely with our full-year 2024 expectations of continued growth in our revenue and profitability.”
The company’s focus on strengthening its market position through strategic acquisitions and investments in its core businesses underscores its commitment to achieving its financial and strategic goals for the year, despite the temporary setbacks with its audited financials.
