The cross-listing of Massy Holdings Limited onto the Jamaica Stock Exchange (JSE) was initiated on Thursday (January 27).

The share trades under the symbol “MASSY” and opened with a listing price of J$2,463.08. The cross-listing represents a critical transaction for Jamaica and the region at large.

Massy’s decision to cross-list, especially in this period of continued uncertainty related to the coronavirus (COVID-19) is a major step towards building a more regional capital market, one that is far more intertwined and consequently, more robust and beneficial to companies throughout the Caribbean.

Since the announcement of its decision to cross-list on the JSE in May 2021 Massy’s teams have worked together with Barita Investments Limited and First Citizens Brokerage & Advisory Services to deliver to shareholders and potential investors in Jamaica an attractive opportunity to invest in one of the largest and most diversified companies in the region.

“What Massy presents to the Jamaican investor is an opportunity to widen their portfolio exposure to industries that are currently unrepresented or underrepresented on the JSE. These industries fall within Massy’s key industry portfolios which include gas products, motors and machines and integrated retail,” explained Terise Kettle, vice-president of investment banking at Barita.

“Beyond industry diversification, Massy will allow investors on the JSE an opportunity to diversify their portfolios geographic holdings, as Massy operates in more than 15 countries in the Caribbean Basin with most significant contributions coming from Trinidad and Tobago, Guyana, Barbados, the Eastern Caribbean, Colombia, Jamaica and the USA; offering investors an immediate foothold into these countries with the purchase of a single stock,” she added.

Continuing, Kettle further argued, “It’s also important that we acknowledge exactly what Massy intends to achieve. Essentially, after 99 years of operations, Massy has recently restructured its organisation from a conglomerate to an investment holding company, devolving greater autonomy to its portfolios while strengthening governance of the portfolios. The benefits of this have been impressive, the company’s balance sheet has strengthened significantly with additional cash that can be deployed towards growth-inducing initiatives, its debt has been reduced, and its profitability has grown commendably. With the current size of its balance sheet and a renewed focus on growth, we see Massy becoming one of the most global, Caribbean companies. Its listing on the JSE is just step one of a much larger, long-term strategic plan.”

But who exactly is Massy?

While its size and scope are impressive, Massy is so much more. Massy is a group that is inspired by its purpose: “A Force for Good; Creating Value, Transforming Life.”

In 2013, Massy began its quest to become a “conscious company”, as it sought to create unifying purpose, values, and modes of operating its group of companies to execute its strategy of presenting unified ecosystems among its companies to enhance value propositions to customers.

It involves developing conscious leaders who put people first, transforming management style and culture to empower and engage employees; a win-win approach for all stakeholders. It even transcends this; making conscious decisions for the well-being of the global ecosystem to not just exist, but to preserve the well-being of the environment for the good of all human beings and the preservation of life.

Group CEO, Gervase Warner describes the Massy operating model.

“Massy first supports and cares for its employees who provide outstanding service to customers who reward the company with loyalty that translates to better profits for the company which the company in turn uses to provide more support to employees who are more engaged and generate ideas for improvement and serve customers diligently. This continues a virtuous cycle in which abundance abounds,” Warner began.

“Sharing abundance through support for communities creates an environment of mutual support as the communities, in turn, support Massy with loyalty. Treating suppliers and other stakeholders fairly and searching for win-win relationships also helps to drive profitability which redounds to the benefit of all shareholders. In this operating model, employees are given greater autonomy to make decisions as they are much closer to the operations of the business, and are engaged to increase efficiency, streamline workflows, and generate ideas for improvement and growth. This ultimately allows the Group to be more agile and responsive to rapid change,” he contended.

In acknowledging the purpose of Massy and the significance of the transaction at hand, Richard Look Kin, general manager at First Citizens Investment Services, noted “as Massy approaches the centenary of its founding, First Citizens is delighted to continue our long-standing partnership with Massy, as co-brokers and advisors along with Barita Investments Limited, on the cross-listing of Massy’s shares on the Jamaica Stock Exchange.”

“This transaction represents another step in Massy’s role in modelling a truly Pan-Caribbean group. This is an opportunity for Jamaican investors to not only participate in Massy’s financial success, but also in the group’s journey towards its purpose to be a ‘Force for Good, Creating Value and Transforming Life’,” Look Kin remarked further.

A company focused on doing more

Certainly, one cannot speak about Massy without acknowledging the benefits of its long history. As a company in operation for 99 years, Massy has made several transitions.

The most recent, as previously indicated, has been the restructuring of the group from a conglomerate to an investment holding company, a move that has paid generated returns for shareholders thus far.

Specifically, in the 2021 financial year alone, Massy provided shareholders with a dividend yield of 4.32 per cent and a share price return of 39.83 per cent.

This came on the back of the asset sales as the group restructured itself to shed assets that were returning less than Massy’s weighted average cost of capital (WACC) of approximately 9.60 per cent.

In some cases, the group sold assets that were providing returns above the cost of capital but were not in line with the strategic growth plan, which allows the Massy Group to focus on the portfolios in which it has the strongest comparative advantages and the greatest opportunities for future growth.

The returns shareholders have received over the 2021 financial year, prove that the strategy has been working well. In addition to unlocking value by selling assets that were not performing well, the group has generated significant cash that will be used to acquire assets aligned with its portfolios and plans for growth.

Next steps

“Our group has unlocked its formula for sustainable growth. We operate as a conscious investment holding company with clear focus on the three independently lead portfolios which are each globally competitive in their industries. We will continue geographic expansion in the Caribbean Basin as well as further investment in existing countries where growth prospects are most attractive,” Gervase Warner, executive director, president and group CEO said in discussing the future plans for Massy.

“Future investments will be focused on our three main portfolios and the group is increasingly confident to start searching for global opportunities beyond the Caribbean Basin. While we have a considerable cash reserve and significant borrowing capacity to fund our growth plans, the cross-listing on the JSE enhances our prospects for raising additional capital in the future to support our most ambitious aspirations for growth,” he added.