Dolphin Cove goes for $240 million

Stafford Burrowes says he plans to use the bulk of the $240 million he hopes to raise by taking Dolphin Cove public to pay down expensive debt and upgrade facilities of the attraction company.

Burrowes who, at present, directly owns 88 per cent of the company, is also promising a relatively robust dividend policy once Dolphin Cove, a strong group with healthy profits, goes public and is listed in the junior market of the Jamaica Stock Exchange.

"... The directors intend to pursue a liberal dividend policy, which anticipates an annual dividend equivalent to not less than 25 per cent of net profits available for distribution, subject to the need for reinvesting in the group from time to time," Burrowes said in the letter to the offer document.

The IPO (initial public offering), for 80 million at $3 apiece, opens on December 8 and closes on December 22.

The shares being put to offer will amount to just over 20 per cent of the projected paid-up share capital if the offer is fully subscribed, given the recent allocation of additional shares in preparation for going market.

With the expected dilution, Burrowes' holding in Dolphin Cove will slip to 70 per cent.

Of the 80 million shares on offer in the IPO, only 75 per cent, or 60 million, will, at least initially, be for general sale.

Of the remaining 20 million, 16 million, or 80 per cent of the lot, is being earmarked for staff and directors of the group, with the rest being for sale to key sector partners, such as tour operators and their employees. If these shares are not taken up, they will be then available to the public.

Launched a decade ago, Dolphin Cove operates dolphin attractions/marine parks in Ocho Rios, St Ann; Lucea, Hanover; and Half Moon, St James, as well as plantation tour at Prospect, St Ann. The group employs more than 300 persons.

Financial success

But not only has the company broken new ground in Jamaica's tourism sector, it is having financial success, the balance sheet and recent profit and loss figure suggest.

For instance, the company has shareholders equity of more than $830 million and liabilities of $144.5 million.

For the financial year to December 31, 2009 group revenue reached $832.6 million, up 12 per cent on the previous year, and its pre-tax profit of $110.2 million was up 47 per cent. Its profit margin was just over 12 per cent.

The company's net return was $104 .7 million, an increase of 40 per cent.

Burrowes said that planned expansion in Jamaica's tourism infrastructure placed Dolphin Cove in a position to maintain its success.

He said: "The directors believe that the group is well placed to grow as the tourism market expands, as it is expected to do following completion of the development of the Falmouth cruise ship pier ... and the addition of hotel rooms, including the 800 family suite expansion of the Fiesta hotel near the new marine park at Point, Lucea, Hanover."

IPO opens December 8