Today we break new ground by presenting a ranking of the best-of-the best listed companies that were active in Jamaica in the year 2002. Rankings of any kind tend to trigger discussion, debate and sometimes even controversy. They spark interest and comment because they dare to measure quality and to acknowledge excellence. However, in an increasingly competitive market where reputation counts, we think it is appropriate to pause and to tip our hats to those among us who are exceptional performers. This is the primary objective of this publication the Mona School of Business and the Financial Gleaner's inaugural ranking of the best of firms listed on the Jamaica Stock Exchange.

The ranking will be an annual event recognising the standout performers for each year. This inaugural list was timed for late in the year when many companies are going through their planning process for the New Year. It seemed a particularly good time for boards and senior executives to compare themselves to the best and to build in efforts to improve their firm's chances of standing in the winners circle for future ranking seasons.

SELECTING HORSES FOR COURSES
Many months ago when the Gleaner Company and the Mona School of Business started this process, we had almost immediate agreement that the rankings would be data driven and objective. We wanted simple, elegant but definitive criteria for identifying our GiltEdge winners.

The first steps were data collection and the development of a flexible proprietary model that could produce a transparent rank. To this end, the Jamaica Stock Exchange generously made the annual audited reports available as filed. We drew relevant data from these reports, making no adjustments. We took the view that if these self reports were adequate for the auditors and for the JSE, they were fine for our purpose. The stock market data was treated differently as we felt it was important that all data to be comparable and thus as at the same date. We chose December 31, 2002 as the common measurement date, thus controlling for any market timing issues that may put a contender at a particular disadvantage or advantage.

For analysis, we built a linear model that could rank our corporations on 26 measures and on any combination of these variables. When using combinations each measure could be weighted at will. This flexibility provided us with an embarrassment of analytical riches. We could rank based on raw data such as revenue or market cap. We could rank on ratios such as return on equity and revenue per dollar of asset. We could mix and match these as our inquiries deepened. These capabilities ensured that our results would robust and definitive.

THE WINNER'S CIRCLE 2002
The final step was selecting the criteria for excellence. We examined 10 reputable international rankings; we consulted with local securities analysts; we conferred with academics; we spoke with business persons and we considered the local and international economic and business climate. We looked back to our original objectives to find simple but sufficient measures that captured the essence of excellence for 2002. On these bases we selected four criteria - size, value, profitability and productivity. The best in class on each of these measures would be our Bronze GiltEdge winners. But our grandest prize -the Gold Award -would recognise balanced overall performance on all four criteria combined. A single firm that stood head and shoulders above all by delivering superior performance combined on all criteria would be the Gold GiltEdge winner. Let's now take a closer look at our four measurement criteria.

Size matters: Larger companies are more likely to be resilient in the face of the turbulent economic and social environment. Their superior access to financial and social capital enables them to defend their industry positions and to attract, motivate and compensate competent managers. Revenue was selected as the appropriate measure of size. This is consistent with international rankings and with recognition of the customer base as a true measure of a quality firm. The top performer in the size category and GiltEdge Bronze Awardee is Cable and Wireless (Jamaica) Ltd. Many of the top 10 performers in this category (See Table 1) either operate regionally or are a part of a global enterprise that competes internationally. As a part of further analysis of size, we also reviewed revenue growth. Several of the top firms in absolute revenue were also in the top 10 in revenue growth - Grace, C&W, RBTT. Other smaller entities such as DB&G and Pegasus Hotels stood out as firms to be watched, posting strong revenue growth.

Profits are the Point: While size matters, there is little point in being huge if the organisation is not profitable. For this reason a measure of profitability had to be included. This year we have decided to use an after-tax measure of profitability since tax- planning is an important corporate function reflecting managerial skill.

In selecting a profit measure we evaluated firms on several rates of return measures (ROI, ROE, and EPS). However, to remain spare, we chose the simplest measure - absolute after tax profits. The top performer in the profit category and GiltEdge Bronze Awardee is RBTT Financial Holdings Ltd. As one would expect, many of the firms with the largest absolute profits (See Table 2) were also the larger firms measured by revenue. However they did not appear in the same rank order confirming some distinct differences in their after-tax profit rate for each dollar of sales. The growth analysis also confirmed our expected overlaps with the top 10 by profits. NCB, D&G and JMMB all posted good profit growth. Several of the top 10 entities had significant decline in profits and if this trend continues they should fade from this particular winner's circle in the upcoming years. Notably, several smaller earners such as Hardware and Lumber, LOJ and Seprod also posted good profit growth numbers.

Bang for the Buck: In a globalised environment, it is important that firms continuously seek to increase the productivity with which resources are utilised. This measure sought our top 10 efficiency performers. Several indicators were available for use - measures of asset, capital and inventory utilisation. We measured all these, but recognising that human capital is a key asset for organisational success, we selected a performance measure that takes human resources into account - after-tax profit per employee. The top performer in the efficiency category and GiltEdge Bronze Awardee is the Carreras Group.

Our top 10 performers in this circle (See Table 3) were largely from the financial services sector. (Note that we restricted our analysis to the listed firms with at least 25 employees.) Carreras seems a remarkable exception but its accounts showed large investment income on significant invested financial assets. Desnoes & Geddes' and Seprod's showing in this segment is therefore exceptional and creditable. Cable and Wireless appears to be reaping the fruits of its staff rationalisation over the last few years. We extended our analysis to the industry level and looked at the performers outside this financial services group. With this extended look - Courts, Grace, RJR and Berger put in good efficiency scores. Further, on the growth in after tax profit per employee several non-financial firms showed well. Hardware and Lumber, Seprod, Grace, D&G and Lascelles did very well, recording improved efficiency.

The Shareholder's Best Friend: It would not be complete to rank Jamaica's best performers without considering some measure of value to shareholders. By incorporating market capitalisation growth over the course of the calendar year, we captured the increase in the valuation of the firm by the investing public. The top performer in the value category and GiltEdge Bronze Awardee is Jamaica Producers Group Limited.

This is a particularly special award as it captures the investing public's view of the prospects for the future as well their view of improvements over the past year. Of course, capital market activity such as takeovers (for example, Kingston Wharves) and market speculation would also show in this measure. Newly-listed firms for 2002 such as JMMB would not have been included on this measure as they have no prior year market cap data. The top 10 (See Table 4) in this circle include several firms that do not appear elsewhere RJR, Pegasus and Courts. Several of the performers on other measures, such as D&G, did not show in this area at all.

JAMAICA'S GILTEDGE GOLDEN AWARD FOR ALL ROUND EXCELLENCE 2002
The overall winner of the Golden Award is the single firm with the best all-round year 2002 performance. In an equally weighted scoring on size, value, productivity and profitability the firm serves as the exemplar of Jamaica's best for 2002.

This year our Jamaica's GiltEdge Gold Award went to the RBTT Financial Holdings. RBTT was the standout firm that showed the balance of qualities that defines an exceptional organisation. Grace Kennedy & Company and National Commercial Bank were the Silver Awardees, also showing excellence in all round performance. Congratulations to RBTT, Grace and NCB! Only one of these three firms won on a particular score - RBTT won the award for profitability. This trio registered consistent outstanding performances on each of the key indicators. Their balanced accomplishments displayed the qualities that epitomise superlative corporate achievement for 2002. Our group of top 10 performers for 2002 (Table 5) also include good showings by BNS, Courts and Jamaica Producers Group. We must note that the range of scores for the top 10 were extremely close - the margins were slim. All 10 top firms are blue-chip performers.

These top 10 all-round performers are sufficiently large in revenue and profits to thrive well into the future despite turbulence in the economic and social environment. Liberalisation means these firms will face competition but their superior access to resources should help them defend their industry positions. Among the top 10, several Jamaican firms appear to have the critical mass to successfully extend overseas and begin to emerge as Jamaican multinationals - indeed many have already done so. Our top 10 also have staff that was efficient and productive in 2002. They appear likely to continue to attract and motivate some of the island's finest workers. They also provide their shareholders with significant capital gains - for many this is the ultimate arbiter.

A LOOK TO THE FUTURE
We must note that while good performers in the Gold and Bronze Circles for 2002 should continue to do well, given the vagaries of business this is not assured. Many may drop from the 2003 circle. Next year, firms that did not appear in the Top 10s may earn a spot on this coveted list. The scores of the firms were very close, slim margins separated the top 10. (Firms that did not appear in the top 10 this year may check the MSB web site where we have the extended rankings. Note that slim margins separated many firms.) Further, we expect additional new entrants to submit their annual returns and join in the race for excellence!

THE RANKING TEAM
Finally, we would like to thank the contributors to this extensive data collection and analysis effort. We must mention James Robinson, Anthony Barnes, Maxine Garvey, Garfield Grandison, Al Edwards, Gordon Shirley, Harry Abrikian, O'Neil Malcolm, Wayne Iton, Yvonne Nicholson, Patricia Douce, Archie Campbell, Sandra Shirley, Lincoln Robinson, Claire Clarke, Kevin Richards, Donette Falconer, Jenny Campbell, Frances Coke, Noel Reynolds, Carole Wedderburn, Michelle Tomlinson and Robert Mullings. Hats off to RBTT Financial Holdings!

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