Supreme optimism
Published by www.jamaicaobserver.com on Jan 23, 2008
Jan 23, 2008

Despite having to write off plans to expand into Trinidad and facing higher liabilities for its main revenue earner, Cash Pot, Supreme Ventures executives are projecting an 85 per cent increase in net profit for 2008.

SVL chief executive Brian George

SVL chief executive Brian George pinned his company's hopes for massive profit improvement this year on the addition of more game patterns to the Bingo game, which was launched in October 2007, and refreshing the Lucky5 and Lotto games

His projections placed 2008 net profit at $752 million.
Last year, the gaming company earned $405-million net profit from $18.95 billion in revenue for the year ended October 31, 2007, an enormous increase over the $165 million it netted in profits from $15.95-billion income the year before.

The improvement was largely as a result of higher - 18 per cent increase - lottery income over the previous year coupled with a near $200-million reduction in service contractor fees, stemming from renegotiations with its technology provider, GTech, in 2006.

George told analysts on Monday that apart from higher Cash Pot game liabilities, which had a direct impact on profitability, the firm had to write off its planned expansion of gaming lounges in Trinidad "due to the fact that their Government has announced plans to curtail the expansion of gaming".

The group also saw improvement for its gaming and hospitality division returning pre-tax profits of $37 million from $962-million revenue during the year, compared to the $62-million loss it made the year before from $727 million in revenue.

Incidentally, when listing in 2006, SVL had proposed in its prospectus to shareholders that it would deepen its stake in gaming in Jamaica and the region, which would be the strategem that would form the springboard for massive profit growth.

Then, the company had projected that it would earn $1.949 billion by 2008.

It scrapped those estimates in early 2006, when executives realised the challenges they would have to face.

On the other hand, George, whose firm promised to implement a healthy dividend policy in its IPO document, informed brokers that his board was positive about honouring the dividend policy proposed in 2006. He hopes to offer a payout of between 35 and 37 per cent of net profit declared on the 2007 financial results.
That would translate to a dividend payment of $146 million, or 5.5 cents per ordinary share.

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