Keith Collister, Business Writer
Don Wehby, chief executive officer for GK Investments.
In an exclusive interview with the Financial Gleaner, GK Investments CEO Don Wehby pronounced himself pleased with the performance of the companies that are part of his portfolio.
According to Wehby, First Global Bank was doing "very well", and was continuing its planned branch expansion programme.
Consumer loans, he said, were the primary areas of growth, and that the bank continues to be one of the market leaders in terms of foreign exchange trading.
Reviewing GK's local securities business, First Global Financial Services (FGFS), Wehby advised that the company has seen "increased profits".
A review of the GraceKennedy group's 2006 results show that while food trading continues to be the biggest money spinner for the conglomerate — earning $14 billion of the total group sales of $36 billion — financial services was its most profitable segment.
Financial services made pretax profits of $1.3 billion, more than half the group's $2.5 billion.
MUTUAL FUNDS
Despite their inability to expand in the area of domestic unit trusts, due to a moratorium on new trusts by regulators, the CI Funds product was doing "very well," said Wehby.
FGFS is agent for the Canadian based mutual funds.
As for the relatively poor performing area of equity trading, which had suffered due to the prolonged bear market, Wehby said he expected it to pick up going forward.
GraceKennedy is also continuing to expand its securities operations regionally.
Its Barbados joint venture Signia, in which it has 40 per cent ownership, is seeing "double digit growth" according to Wehby.
ONE1 FINANCIAL
Trinidadian investment boutique One1 Financial also recently became part of the group, after GraceKennedy acquired a 90 per cent interest.
One1 Financial was formed about one and a half years ago by Mark Singh, a former RBTT banker.
According to Wehby, the marriage occurred because "they wanted to expand, and we wanted to be in Trinidad." In his view, the young, aggressive Trinidadian team reminded him of Dehring Bunting & Golding's team when they were just starting out.
INSURANCE
Allied Insurance brokers has retained its long-standing number one position in the marketplace, while Jamaica International Insurance Company (JIIC), he said, is also now the largest local general insurance companymeasured by gross premium income.
JIIC achieved this through organic growth and the acquisition of the Dyoll portfolio.
"There was no significant impact from Dean" on JIIC, said Wehby, which reflected Grace's conservative reinsurance policy, with most of the risk reinsured.
MONEY SERVICES
Pre-tax profits for remittances, now money services division, were up over 50 per cent over the corresponding six months last year to nearly $465 million.
Most of this increase in profitability however, reflected the restructuring in December.
Wehby said that new CEO Joan Marie Powell was doing a "good job", whilst the business continued to see transaction growth in Trinidad, Guyana and Jamaica.
However, margins continue to fall, with a lot of the increased profits being due to cost reductions.
RETAIL
The GK Investment CEO has advised that Hardware & Lumber is "not for sale", and that Grace had "plans to expand" the business.
While H&L was doing much better than last year due to better inventory control and improved working capital management, he was still cautious on the outlook.
However, their historical experience was that hurricanes impact H&L in "a positive way" due to increased sales of goods like plywood.
Wehby did not focus on the performance of Grace's recent U.K. acquisition, WT Foods, which is part of the food division run by now London-based Erwin Burton, but he advised nevertheless that the U.K. company was doing "exceptionally well and had met all targets."
keithcollister@cwjamaica.com
