Future Energy Source Company #IPO

Future Energy Source Company #IPO
⚫️500m new shares @ $0.80 each (J$400m target)
⚫️35% (175m reserved for general public)

⚫️Opens Feb 25th. Closes Mar 3rd

FESCO is a Jamaican owned, fuel distribution company, licenced and operating in Jamaica.

FESCO was incorporated and registered with the Companies Office of Jamaica on Feb 4, 2013 and made its first fuel sale in Nov 2013

In 2014, the first FESCO branded Service Station was unveiled in Mandeville. There are now fourteen (14) branded Service Stations islandwide

FESCO is a Jamaican owned, fuel distribution company, licenced and operating in Jamaica.

They have partnered with some dealer-owned dealer-operated Service Stations and company invested-dealer operated Service Stations to brand their stations as FESCO Service Stations. They have 14 locations and intend to open two (2) additional Service Stations, one at
⚫️Ferry on Mandela Highway by April 2021 and
⚫️the second at Beechwood Avenue, St. Andrew in June of 2021 In addition to supplying fuel to FESCO branded Service Stations they provide
⚫️both fuel equipment solutions and
⚫️affordable reliable fuel supply to the construction, distribution, manufacturing, and transportation sectors islandwide They also market
⚫️their proprietary brands of lubricants (“FUTROILTM”),
⚫️coolants and chemicals (“FUTRLUBETM”), and
⚫️purified drinking water (“FYCTM”) through
their branded Service Stations and convenience stores.

Other facts. They plan to market

• Beverages – including water;
• Cooking Gas (LPG) (estimated 2022/2023)

Their current market share for transportation fuel🚗🚌🚐🚍 is approximately 4.65% and is expected to increase to 5.3% by March 2021 and 7.0% by December 2021. Other facts

They are a new company (just over 6 years) with an initial strategy to grow organically rather than through acquisitions

• Only 2 locations in Kingston & St. Andrew. Stony Hill & Rock Hall. Both rural, so that presents growth opportunity ⚫️Estimated to be the 3rd largest local fuel distributor/ marketer

They are different because they offer;
• fast-food 👩‍🍳🍳, money transfer and bill payment, expanded convenience stores,🛒🏧;
• their own products
• sponsorship to premier league & Tallawahs (🤷‍♂️they said it) Company will use funds to

  1. enter the consumer cooking🍳 gas/LPG market within 24 mths of the listing
  2. open new FESCO⛽️Station on Beechwood Ave – June 2021
  3. retail LNG for the 🚍🚌🚗industry at the FESCO Ferry (Mandela Highway) by April 2021
  4. reduce the Company’s debt

The petroleum sector is vital to 🇯🇲 since the country is heavily dependent on it to fulfil its energy requirements

The National Energy Policy states that, “The 🇯🇲 economy is characterized by high energy intensity and low efficiency & is almost completely dependent on imported oil”

Island wide 🇯🇲, LOCAL🚍🚗fuel distributors/marketers COMBINED supply
⚫️less than 27.7% of the market by volume of fuel sold &
⚫️less than 38.1% of the market by number of Service Stations

Market dominated by Multinationals… and its mainly in Kingston & St. Andrew

On Nov 26, 2020, FESCO opened its 1st FYC Supermarket in Bodles, St. Catherine. The FYC🛒provides a one-stop shopping experience as you can get🚗fuel & do grocery shopping. It includes 🍨🍦🏧🥪

The Company plans to open (in 2021)
⚫️FYC Mart at the Ferry (Mandela Highway) Service Station and also
⚫️an FYC Express at the Beechwood Avenue Service Station

So they will operate in the🚗🍳fuel &🛒retail segments

Store closures & restricted hours (due to Covid) have affected sales, which in turn affects the Company’s ability to earn. But impact far less than anticipated

Revenues for the last 5 years up to March 2020 have grown from J$3.8b to J$5.9b

Margins
• Gross 3%
• Net 1.76%

The business is profitable, earning

J$12M in 2016 to J$105M in 2020

For the 6 month period Apr 2020 – Sept, they earned $64M in profits. Covid has slowed business with sales being🔻6% & profit🔻0.28%

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