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MFS Capital Partners Limited has delivered the outstanding financial reports cited in its suspension last year, but the block on the trading of the stock was still in force up to market close on Thursday.
The company filed three reports that were posted on the market on Monday, inclusive of audited accounts for year ending June 2024 and two quarterly reports for September and December 2024. Its annual report for FY2024 is still outstanding.
CEO Dino Hinds said that throughout the process of preparing the long-overdue reports, the company has been in dialogue with the stock exchange. MFS Capital is listed on the junior market of the Jamaica Stock Exchange, JSE, emerging in 2022 after taking over SSL Venture Capital Jamaica Limited and rebranding the business.
“We continue the process of dialogue which we’ve had all along with the regulators,” Hinds said. “We thank them for their guidance that they have given all along, and we look forward to resolving the outstanding issues that there may be.”
Trading in the MFS stock was suspended last December after the filing of the company’s audited accounts overran three months. Its September quarterly report was also a month and a half overdue.
Suspended companies are still required to make timely disclosures to stock exchange, so in the interregnum, MFS Capital continued to update the market on the delayed reports; announced the appointment of a new chief financial officer – Dr Keisha Christie resigned from the position on August 30 and was replaced by Camille Martin on November 18; reported on changes to board committees and updates; and gave a status updates on its takeover of Micro-Financing Solutions Limited, in a $500-million deal, namely, its rebranding and name change to Monolith Financial Services Limited.
With the change, Micro-Financing Solutions transitioned from being a microlender to a provider of financial services, inclusive of foreign exchange trading, remittances, bill payments and private credit.
The newly released audited accounts includes goodwill of nearly $67 million related to the acquisition of Micro-Financing Solutions in March 2024. The company’s auditor zoned in on the estimate, which it pronounced as reasonable; but at the end of the day reported that the figure could stand.
The $67 million was derived from the purchase consideration for Micro-Financing Solutions, $500 million, less the fair value of the acquired net assets of $433 million.
MFS Capital did not include the goodwill item in the interim accounts it realised for the June 2024 fourth quarter; however, its notations indicate that it initially placed a higher fair value of $500.16 million on the acquired net assets.
Consequently, it reported a bargain gain of over $161,000 on the acquisition at the time.
MFS Capital spun from profit of more than $8.7 million in FY2023 to a loss of $52 million for the group, inclusive of $49.9 million in losses attributable to shareholders in FY2024.
With the absorption of Monolith, MFS Capital’s assets climbed from $65 million to $821 million in the period, while its capital was strengthened, from negative $40 million to $168 million.
Up to June 2024, the company still had $188 million of accumulated deficits to unwind, but made progress in that effort six months later. In its latest results for the December quarter, the group’s accumulated deficits shrunk to $137 million, while its capital increased to $219 million.
Also, over the half-year ending December, MFS Capital reported revenue of $89.6 million, compared to $360,000 the year prior; it made a profit of $50 million, compared to losses of $17.6 million in the 2023 period.
Most of the revenue over the past six months, $82.9 million, was derived from the money services operations, while private credit activity contributed $6.7 million.
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