5 Things: GWest Corporation Limited’s Annual Report 2019

GWest Corporation Limited (the company) is incorporated and domiciled in Jamaica. Its main activities are the development of commercial properties and the provision of healthcare services.

Here are 5 things of note from its Annual Report for the Year Ended March 31, 2019 which was published on the Jamaica Stock Exchange website on July 1, 2019:

1. Emphasis of Matter – Note 28

The auditors are concerned.

“The company recorded a net loss of $135.876 million during the year ended March 31, 2019 (2018: net loss of $88.109 million). At that date it had accumulated losses of $18.783 million. The above factors indicate a material uncertainty that may cast doubt on the company’s ability to continue as a going concern and to therefore realise its assets and discharge its liabilities in the ordinary course of business. The continuation of the company as a going concern is dependent on the availability of the third party financing and on future sustained profitable operations.”

2. Earnings Per Stock Unit

Although GWest EPS improved from a loss of (0.55) per share in 2018 to a loss of (0.28) per share in 2019, this was attributable to the issuance of 250,000,000 preference shares during the year.

“The calculation of earning per stock unit is based on the net loss after tax of $135.876million (2018: loss after tax of $88.109million) and the weighted average number of stock units in issue during the reporting period of 484,848,485 (2018: 160,797,841) units.”

3. Revenue

Revenue leaped 96% to $129.96million led by a sharp rise of 342% in patient fees. Patient fees now make up the majority of revenue for the company.

4. Expenses

Expenses rose sharply by 66% to $276million. A new cost for 2019 called Medical Consultancy fees contributed $45million or 16% of all expenses. The largest expense, however, continued to be repairs, maintenance and waste disposal at $70million.

5. Management Plans

From Note 28 of the Annual Report

Management is committed to continue operations as a going concern and is pursuing a number of strategies to return to profitability, which include:

  • sale of investment property units
  • commencement of operations of planned new surgery centre
  • increased marketing and promotion of new services being offered
  • continue rationalisation of expenses obtaining additional third party financing for improved working capital

At the date of these financial statements, the company was in an advanced stage of negotiations with its bankers regarding the restructuring its current borrowing arrangements and to obtain further financing for its strategic plans.

Additionally, subsequent to the year end, the company has signed sale agreements for two units of its investment property.”

NOTE:  This post is for information only and should not be construed as professional advice.  The report is linked above.